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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.

(Leo W Gerard) Offshorers Demand: No Taxes, No Risk

Ford is moving its electric vehicle factory to Mexico. PHOTO BY MIKE MOZART/FLICKR

Ford hit Michigan and its auto workers with some crappy holiday news. Instead of building a $700 million electric vehicle factory in Michigan as promised in January, Ford will construct the plant in Mexico.

Ford reneged on its promise to Michigan workers just days after the Senate passed a tax plan intended to end levies on corporate profits made at factories offshore – in places like Mexico. News of the letdown also arrived just days before new negotiations on a revised North American Free Trade Agreement (NAFTA) are to begin in Washington, D.C.

Ford and other giant corporations got what they wanted out of Republicans on taxes, dramatically lower levies on domestic profits and total elimination on foreign profits. That makes Mexico an even more attractive manufacturing site for them than NAFTA did. So now they’re lobbying the Trump administration hard to retain the privileges that NAFTA bestowed on them. If they win that argument, they’ll have secured double incentives to offshore.

Trump administration officials don’t sound like they’re buying the corporate line, however. And they shouldn’t. NAFTA has cost Americans nearly a million jobs as thousands of factories migrated to Mexico. As he campaigned, President Trump promised untold numbers of factory workers and their families across the nation’s industrial belt that he would fix or end NAFTA to keep jobs and industry in America. He needs to keep that promise.

That means elimination of the Investor State Dispute Settlement (ISDS) scam that allows corporations to sue governments in secret courts presided over by corporate lawyers when legislatures pass laws corporations don’t like. That means standing strong on the Trump administration demands that the new pact expire in five years if it’s not working and that a substantial portion of automobiles – including Fords – be made in the USA to attain duty-free status. It means strong protection for workers’ right to organize and collectively bargain. It means substantially raising the Mexican minimum wage, which now stands at $4.70. That’s for a day, not an hour.

What it really means is prioritizing the needs of workers over the demands of corporations, something that was not done the first time around by NAFTA negotiators. As it stands now, NAFTA places all of the jeopardy on the shoulders of workers and communities while substantially eliminating normal business risks for corporations.

The jeopardy NAFTA created for workers is that its corporate-friendly provisions prompt employers to close American factories that sustain both workers and communities and move them to Mexico. This exodus of American manufacturing to Mexico has continued apace this year, even as the Trump administration began renegotiating NAFTA, probably because corporations assume they’ll get everything they want in the end. They have, after all, always done so in the past because they are, after all, massive political campaign donors and lobby firm patrons, while hourly workers are not.

Bloomberg reported in October, for example, that firms whose function it is to help corporations move factories from the United States to Mexico had a boom year in 2017, with one reporting it had done more offshoring this year than in any during the previous three decades.

Mexico is alluring because of its dirt-cheap wage rates, the paucity of environmental enforcement and the ISDS scam that lets corporations sue the government if Mexico would regulate in a way some CEO claims would crimp his profits.

The ISDS along with NAFTA’s unlimited lifespan reduce risk for corporations. Normal business decisions in capitalist systems involve some jeopardy. A chemical company could, for example, invest in developing a new pesticide, but then lose when the government bans the product after determining it kills babies as well as bugs.

NAFTA provides corporations with investment protection because it ensures they’ll get their profits even if a government changes regulations. ISDS enables corporations to sue to recoup money the corporations supposedly would have made if the government hadn’t issued new laws or regulations. The corporate-run court can order a country’s citizens to pay tens of millions to the corporation.

Some say this government-financed investment insurance corrupts capitalism. Among the significant people who have is U.S. Trade Representative Robert Lighthizer. He said corporations are insisting the government absolve CEOs of political risk. CEOs are using ISDS as a guarantee rather than buying risk insurance or factoring political risk into economic decisions about whether to move.

Lighthizer said businessmen have literally told him the administration cannot change ISDS because corporations wouldn’t have invested in Mexico without it. “I’m thinking,” he said, “‘Well, then, why is it a good policy of the United States government to encourage investment in Mexico?’”

These are the same corporate honchos who object to a five-year sunset clause for a new NAFTA, he said. They want a free eternal warranty on the provisions of a deal they describe as the world’s greatest. Lighthizer’s response is that if the deal is so great, why would the government choose to end it after five years? What are they really worried about?

The worry may be that those CEOs know NAFTA is great for their bottom line but not for the workers who elected Donald Trump President.

They know NAFTA was drafted by CEOs for CEOs. Its priorities were determined by corporate bigwigs behind doors closed to the public. Corporations designed it at the expense of workers and ordinary citizens, Joseph Stiglitz, the Nobel Prize winning economist, said in an op-ed in the Guardian newspaper this week.

It often seems, he wrote, “that workers, who have seen their wages fall and jobs disappear, are just collateral damage – innocent but unavoidable victims in the inexorable march of economic progress. But there is another interpretation of what has happened: one of the objectives of globalization was to weaken workers’ bargaining power. What corporations wanted was cheaper labor, however they could get it.”

U.S. corporations like Ford got it by writing a trade deal that gave them market-distorting profit protections, then abandoning their dedicated American workers and moving to Mexico where they could pay $4.70 a day and pollute unfettered.

President Trump has threatened to withdraw from NAFTA if his negotiators can’t get new reasonable terms that protect American manufacturing and American workers.

That is right. It’s appropriate that corporations like Ford sustain the actual risk of offshoring rather than workers bearing it all.

Disability Advocates Speak Out Against The GOP Tax Scam

Granite Staters return to New Hampshire and tell their stories after risking arrest in Washington D.C. protesting the GOP Tax Bill 

A delegation of Granite State disability rights and health care advocates who traveled to Washington, DC this week to protest the damaging Senate bill that guts Medicaid and Medicare for working families to fund massive tax breaks for the rich and corporations held a press briefing about the bill and their participation in a large-scale protest this week in the nation’s capital – which in some cases, included being arrested –  in Concord yesterday.

In a fast-tracked process that required Senators to vote on a 500-page draft bill with notes still in the margins, Senate Republicans passed a tax giveaway to the very wealthy and big corporations that will pave the way for massive Medicaid and Medicare cuts, strip 13 million Americans of health care coverage and increase insurance premiums by 10 percent for millions more. Millions of people with disabilities and seniors, working families, and children will be stuck with the bill and cuts to critical services and basic human rights all so the rich can get richer. Governor Chris Sununu has praised the bill as a “net positive.” 

The press conference highlighted the actual impact on middle and lower income Granite Staters and share the personal stories of those who traveled to Washington DC to protest it.

“I traveled to Washington D.C. to protest this bill because I know this bill will hurt the people who can least afford to be hurt, the struggling middle class and the working poor,” said Melissa Hinebauch, Human Rights Co-Chair of the Kent Street Coalition. The mother of three spoke out against the GOP Tax Bill highlighting the harm working families will suffer under the proposal.

Hinebauch also spoke about how the bill will add over $1 trillion dollars to the national debt while Senator Orin Hatch said “we no longer have the money” to fund essential programs like the Children’s Health Insurance Program (CHIP). “This tax bill is just mean and heartless.”

Video of Melissa Hinebauch

“People with disabilities will be the hardest hit by this tax bill for the wealthy,” said Forrest Beaudoin-Friede a member of ABLE-NH who traveled also traveled to Washington D.C. to protest this GOP tax bill.  “This tax bill takes away tax credits that help small businesses become ADA (Americans with Disabilities) compliant. This credit is equal to half of their expenses above $250 dollars. This effectively raises taxes on small businesses who want to open their doors to both customers and workers with disabilities who need reasonable accommodations.”

“This bill will force cuts to Medicaid that will harm people with disabilities, like me, and some will die,” Beaudoin-Friede stated.

Eddie Gomez went to Washington to speak out against this tax bill on behalf of his seven year old nephew who suffers from the genetic disease, Muscular Dystrophy.   The program that helps Gomez’s sister, a single parent, is funded through charitable donations and receives no federal funding.

“This tax bill eliminates deductions for charitable contributions and discourages charitable giving while threatening enormous cuts to Medicare and Medicaid. How will my sister be able to afford the care for my nephew on a lower-middle class income?” asked Gomez.

Gomez explained that over 8 million working families used the medical device deduction, that would be eliminated under the GOP tax plan, to help offset the costs of high priced equipment and medical expenses.

Video of Forrest Beaudoin-Friede and Eddie Gomez members of ABLE-NH

“We are fighting against this ‘Reverse Robin Hood’ tax bill” said Lisa Beaudoin, Executive Director of ABLE NH.  This tax bill makes “deep cuts to a whole range of programs that are critical to people with disabilities.”

“This tax bill will be a slow death sentence to people with developmental disabilities,” she added.

Video of  Lisa Beaudoin, Executive Director of ABLE NH

This bill will cause “13 million people to lose their healthcare and increase the premiums of millions more,” said Zandra Rice-Hawkins, Executive Director of Granite State Progress.

The GOP Tax Bill passed the senate in a 51-49 party line vote and now moves to a committee of conference to hash out differences between the House and Senate versions of the bill.

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