Resolution # 77A-19-04
Stop Wall Street Looting and Reform Tax Policies to Promote Fairness, Good Jobs, and Public Services
CWA has long advocated for equitable tax policies that make the wealthy and corporations pay their fair share in order to provide adequate resources to support the public investments necessary to build a strong economy, vibrant communities, a good quality of life for all Americans, and good jobs for public workers who deliver vital government services.
CWA has also championed comprehensive re-regulation of the financial services industry to protect consumers and avoid a repeat of the 2008-2009 recession. Unregulated private equity firms epitomize Wall Street greed that is destroying communities and the lives of workers and our families. In the past decade alone, investors allocated $5.8 trillion to private equity buying up more than 35,000 companies employing almost six million workers. When private equity firms take over companies, they load them with debt, strip them of their wealth, and walk away scot-free, leaving workers, consumers, and whole communities to pick up the pieces. CWA members have felt the destructive impact of private equity in newspapers, manufacturing, telecom, airlines, the public sector, and other industries. For example, Alden Global Capital, the owner of Digital First Media, is responsible for decimating local newsrooms and stripping assets from The News Guild-CWA-represented papers, hollowing out the journalism upon which our communities and democracy depend.
In 2017, the Trump Administration and Republicans in Congress passed the Tax Cuts and Jobs Act. In advance of passage of the tax package, the Trump Administration promised that the corporate tax cuts would spur economic growth and result in an extra $4,000 for each American household. Top executives at U.S. companies rallied behind this claim. For example, AT&T promised that it would devote $1 billion of its savings from the Republican tax bill to create “7,000 good jobs for the middle-class.” Instead, AT&T has continued to outsource jobs to low-wage overseas contractors and has eliminated nearly 23,000 American jobs since the tax cut passed.
The 2017 Tax Cuts and Jobs Act was the largest single tax giveaway to the wealthy and corporations in U.S. history. The law rigs the tax code and the economy even further in favor of those at the top. Congress chose to exacerbate economic inequality rather than invest in programs to mitigate it.
The 2017 Tax Cuts and Jobs Act slashed the top corporate tax rate from 35 percent to 21 percent. It lowered the marginal tax rates for wealthy individuals from 39.6 percent to 37 percent. It left the so-called “carried interest” loophole that taxes hedge fund managers’ income at a lower rate than their secretaries. It incentivized offshoring by allowing companies to deduct profits up to 10 percent of foreign assets from U.S. taxation. It exempted certain types of overseas corporate investments from taxes entirely by allowing companies to take advantage of foreign tax havens. It eliminated the individual mandate from the Affordable Care Act which has destabilized the ACA finances. It increased pressure on federal, state, and local governments to reduce services or cut public employees or their benefits.
A recent study by the nonpartisan Congressional Research Service found that the 2017 Tax Cuts and Jobs Act accomplished none of its stated goals of jump-starting economic growth, creating massive amounts of new jobs, and paying for itself through higher tax receipts from that increased growth. It was a lie by the economic elite that robs future generations of crucial resources.
The hole in the federal budget created by the 2017 Tax Cuts and Jobs Act will increase economic inequality. Legislators will be under pressure to reduce public sector employment and to cut back on key public services, much less expand them, unless this legislation is reversed. The elimination of the Affordable Care Act’s individual mandate threatens healthcare for millions of citizens.
U.S. corporations gained a windfall from the 2017 tax cuts, but did not pass those gains on to their workers. Verizon reaped a $16.8 billion gain while Comcast secured a $12.7 billion premium. Verizon workers received a one-time bonus of 50 shares, but Verizon Wireless closed six call centers, eliminating 3,000 customer service jobs in April 2018. Comcast workers got a one-time bonus of $1,000 which became a severance check for 500 workers laid off in December 2017.
Companies have continued to cut jobs and failed to raise employee wages. Instead, they funneled their massive profits from the 2017 Tax Cuts and Jobs Act into stock buybacks or shareholder dividends that benefit primarily executives and large shareholders. Those buybacks and dividends, in turn, remove cash from the company that could be used for investments and compensation.
Resolved: CWA supports tax policies that require corporations and the wealthy to pay their fair share in order to provide adequate revenue to support public programs that benefit the working class, provide vital government services that serve our communities, and support good jobs for public employees.
Resolved: CWA calls on Congress to stop rewarding companies that ship jobs overseas and to reverse the offshoring incentives embedded in the 2017 Tax Cuts and Jobs Act.
Resolved: CWA calls on elected officials to tax Wall Street speculation whose proceeds can be used for education, infrastructure, and other vital public programs. CWA supports a Wall Street sales tax on transactions of stocks, bonds, and derivatives to discourage speculative financial trading that can harm the economy, and legislation that would ban corporate stock buybacks. This would make our tax system more fair and put the brakes on corporate greed.
Resolved: CWA calls on elected officials to investigate the promises of job creation made by AT&T and other companies in advance of the passage of the Tax Cuts and Jobs Act.
Resolved: CWA calls on Congress to reform the private equity industry by forcing private equity firms to take responsibility for the outcomes of companies they take over. This includes putting an end to the carried interest tax loophole that permits the fees charged by hedge funds to be taxed at a lower rate; requiring full transparency of ownership; requiring private equity to share responsibility for the debt of the companies under their control; and prioritizing worker pay in the bankruptcy process.