One year on, GOP tax bill is the gift that keeps on taking
In 2018, Republican lawmakers gave the American people a government shutdown for Christmas, sending roughly 800,000 federal employees home for the holidays without a paycheck. And one year ago today, workers unwrapped a tax bill that gifted the country’s millionaires and billionaires even more money.
At the time, Republicans assured the country that their bill would benefit all American workers in the long-term, leading to wage increases, larger bonuses, and a thriving economy that would lift everyone’s financial fortunes. Spoiler! Not so much.
Let’s start with the stock market, Donald Trump’s favorite economic indicator. On December 22, 2017, the Dow Jones Industrial Average closed at 24,782.29. On Friday, the final full day of trading before the Christmas recess, the DJIA closed at 22,445.37.
Friday’s performance on Wall Street — a decline of more than 400 points on the Dow — capped off the worst trading week in a decade. The last time the stock market fell by more than seven percent in a single week came during the height of the Great Recession in 2008.
With just four full trading days remaining in 2018, it is virtually assured that the stock market will close the year lower than where it began.
For many Americans though, the stock market has little direct bearing on their own financial health. So how about those bonuses workers were promised by Republicans after passage of their tax bill?
In the immediate aftermath of its signing, Republicans leapt to put out self-congratulatory press releases every time a major corporation announced it would be rewarding their employees with bonuses. Take AT&T for example. The company publicly announced a one-time $1,000 bonus for roughly 200,000 of its employees, tying it directly to the windfall it received from the tax bill. But as the union representing many of the company’s employees pointed out, that $1,000 was a far cry from the $4,000 it requested in salary increases that Republicans promised for the average American worker.
Other major corporations that offered their workers one-time bonuses very quickly reneged on their generosity by announcing layoffs weeks or sometimes even days later.
A full year later, what did the average American worker get in tax bill-funded bonuses? According to federal data released this month, they got 2 cents.
Not two percent, two pennies. If the average American worker took a five minute stroll around the neighborhood, they could probably double or even triple their average bonus increase from last year by keeping a close eye on the sidewalk for loose change.
And then there are overall wages. According to the Bureau of Labor Statistics, wage growth was almost nonexistent 10 months after the passage of the tax bill. The year-over-year jump in total compensation was actually greater between September 2016 and September 2017 than it was between September 2017 and September 2018.
It’s not all bad news this holiday season, though. In a handful of small pockets of the country, CEOs and investment bankers are having very happy holidays thanks to windfalls from tax breaks for the rich and executive bonuses.