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AT&T “celebrates” by promising sliver of tax savings to employees

You probably saw the headlines this morning: “AT&T giving $1,000 bonuses after tax bill.”  According to press reports, AT&T plans to give those bonuses to 200,000 US employees. That’s $200 million AT&T is promising to share with its employees. Sounds like a lot of money.

New AT&T Logo in Dallas, TXBut according to its annual report, AT&T would have paid $6.9 billion in federal taxes at the 35% corporate tax rate.[1]  Congress just cut that tax rate by 40%. For AT&T, that could mean a tax savings of $2.76 billion a year.

Do the math.  AT&T is celebrating – and making headlines – by promising a one-time employee bonus equal to about 7.25% of what it can expect to save on taxes next year.

One other thing: AT&T paid stockholders $11.8 billion in dividends during 2016.

So, this headline-grabbing employee bonus is equal to about 1.7% of what AT&T paid to stockholders last year.

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Just weeks ago, proponents of the tax bill promised that it would “mean at least $4,000 more in income every year for the average household.”

Communications Workers of America asked some of the country’s largest employers to guarantee “that working people will receive the raises the administration promised and ensure that the bill’s treatment of overseas profits will not result in domestic job loss.”

“Together, through collective bargaining, we can ensure that promises about wages and jobs are kept,” wrote CWA President Chris Shelton.

“By pushing employers for this raise, CWA proves that working people have power when we join together to negotiate for a fair return for the work we do. Unions remain the most effective means for working people to stand together and achieve wage growth and keep good jobs in the U.S.,” Shelton said. “If you don’t ask for your fair share you’ll never get it – so join a union and start asking.”

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The $1,000 per-employee bonus announced yesterday is a good start.  But even if AT&T raises those 200,000 employees’ wages by $4,000 (as the tax bill proponents promised):

  • that would still be less than one-third of what AT&T can expect to save from the 40% drop in the corporate tax rate
  • that would still be less than 7% of what AT&T paid out to stockholders as dividends last year.

And if this tax “reform” is followed by Social Security and Medicare “reform” – as Congessonal leaders promised, earlier this month – we’re all going to need to remember this, come next November’s elections.

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ICYMI, here are some other recent headlines about AT&T:

AT&T plans to lay off nearly 300 at center in Dallas next year

AT&T lays off DirecTV workers despite pledge to create jobs

AT&T layoffs in 2018 to take place across Missouri, Michigan, & 4 more states

AT&T looking to cut 80,000 jobs in five years

[1] According to Note 11 of the annual report, AT&T’s effective tax rate was only 32.7% last year – not 35% – so its windfall from yesterday’s tax bill may be lower than $2.76 billion/year.

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About Liz Iacobucci

Liz Iacobucci is the former Public Information Officer for the State Employees’ Association of New Hampshire, SEIU Local 1984. Over the past three decades, she has served in government at the federal, state and municipal levels; and she has worked for both Democratic and Republican politicians.
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