Tax cut savings flow to company stockholders, trickle to hourly workers
After U.S. corporations got a big tax cut in December, a flurry of announcements touting bonuses and pay raises for hourly employees raised hopes that the cash windfall would keep flowing down to American workers.
But the sharing of wealth hasn’t been as generous as hoped.
The early payouts, such as one-time awards of $1,000 given to certain workers at AT&T, Comcast and Walmart, and $2,500 in stock awards for Apple employees, were praised by the Trump administration and Republican members of Congress. They trumpeted the awards as examples of how the $1.5 trillion tax cut would result in bigger paychecks for middle-class employees.
But the number of companies letting workers know they are getting a bonus, raise or other form of financial compensation has slowed to a trickle. Most of the extra cash from tax savings is going into the pockets of stock shareholders through dividend increases and companies buying back their own stock in hopes of boosting its price.
A Bank of America Merrill Lynch analysis found that fewer than 45 of the 500 big companies that make up the broad Standard & Poor’s 500 stock index have paid out cash bonuses to their workers in the four months since the new tax law took effect. By the bank's count, about 150 — or roughly a third — of S&P 500 companies have publicly announced their tax-cut spending plans, citing data through March 27.
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