Analysis Finds Only 6% of Corporate Tax Cut Gains Spent on Workers

Tax cuts for the large corporations who wrote the Republican tax scam legislation haven’t even lead to any increase in investment. In January, orders for non-defense capital goods actually fell by about 1.5 percent, and since orders take little time to initiate, they should have increased if the tax cuts were to spur investment. The reality of what a scam this whole ordeal was must be remembered for fighting off the same problem in the future.

While many corporations immediately launched aggressive PR campaigns crediting the tax plan Trump signed in December with new “investments” in employees, a study by the nonprofit group JUST Capital published on Wednesday found that the sensational headlines touting worker bonuses obscured the fact that the vast majority of the law’s benefits have gone straight to the pockets of wealthy shareholders.

“Post-tax cut raises, bonuses, and other worker investments announced by 90 of the largest publicly-traded corporations average just six percent of the total windfall these companies have received from the biggest tax cut in U.S. history,” the group found.

The analysis also showed that 56 percent of these worker investments came in the form of one-time bonuses, not permanent pay raises.

Additionally, the vast majority of companies examined invested none of their windfall into new jobs, while just a few companies said they invested a large percentage—making it appear that all of the companies invested more in jobs than they actually did.

Bolstering JUST Capital’s study was a New York Times analysis published on Monday, which found that rather than investing their tax windfalls, companies are using the extra cash to buy their own shares—a practice that further enriches already wealthy executives and investors but does little to nothing for workers or the overall economy.

“American companies have announced more than $178 billion in planned buybacks—the largest amount unveiled in a single quarter, according to Birinyi Associates, a market research firm,” notes Matt Phillips of the Times.

That amount dwarfs the relatively small gains workers are seeing from the tax law.

As the economists Rick Wartzman and William Lazonick noted in a recent op-ed for the Washington Post, the “nation’s workers are getting woefully little, at least relatively speaking.”

“Peeking beyond the PR, our analysis finds that major corporations are planning to spend more than 30 times what they are putting in the wallets of employees on buying back their own stock,” Wartzman and Lazonick concluded.

EU Set to Approve Monsanto-Bayer Merger

Monsanto is among the most dangerous corporations in history. The EU granting it even more power is a disconcerting possibility.

Of course, the strong public opposition to this merger is an example to see how democratic a society is. In an actual democracy, strong majority public opinion support will have a significant impact on policy. Contrast that with what’s often been seen in practice.

“The planned merger between these giant agribusiness corporations has very little public support,” noted Adrian Bebb, a food and farming campaigner at Friends of the Earth Europe. “EU competition chief Margrethe Vestager has built her reputation on holding powerful corporations to account, and she must seize the opportunity to block this dangerous and unpopular merger.”

Opponents have sent more than 50,000 emails and more than 5,000 letters to Vestager, according to Reuters. More than 200 advocacy groups have come out (pdf) against the merger, and more than a million people have signed a pair of petitions by SumOfUs and

Friends of the Earth Europe, on Twitter, highlighted a YouGov poll that found a majority of respondents from Germany, France, Spain, Denmark, and the U.K. believe it is “very” or “fairly important” for the European Commission to block the merger.

Amazon Patents Wristband that Tracks Movements of Warehouse Workers

These wristbands would increase worker repression levels that are already far too high. Amazon’s CEO is the richest person in the world by net worth, but he still insists on mistreating his workers in their quasi-totalitarian workplaces.

Amazon’s CEO could simply sell $1 billion of stock and give a $2,000 bonus to Amazon’s 500,000 employees, and that’s only one example of what could be done to remedy the mistreatment of its workers. It doesn’t look like that will happen anytime soon though, unfortunately.

Amazon has patented designs for a wristband that can precisely track where warehouse employees are placing their hands and use vibrations to nudge them in a different direction.

The concept, which aims to streamline the fulfilment of orders, adds another layer of surveillance to an already challenging working environment.


Amazon already has a reputation for turning low-paid staff into “human robots” – working alongside thousands of proper robots – carrying out repetitive packaging tasks as fast as possible in an attempt to hit goals set by handheld computers.

This month, the 24-year-old warehouse worker Aaron Callaway described having just 15 seconds to scan items and place them into the right cart during his night shifts at an Amazon warehouse in the UK. “My main interaction is with the robots,” he said.

Danger of ISDS in Trans-Pacific Partnership Countries

The Investor-State Dispute Settlement is an absurd mechanism that undermines a country’s legal sovereignty. Additionally, it should be noted that the TPP isn’t a free trade agreement — it’s an investor rights agreement. Increased protectionism for pharmaceutical corporations in the form of stronger patent enforcement is a notably prominent example that’s the opposite of free trade.

Thanks to years of organizing, we in the United States saved ourselves from the corporate-dominated Trans-Pacific Partnership (TPP) by ensuring that the controversial deal was universally reviled across party lines and could never gain a majority in Congress.

But it is deeply unfortunate for our international partners that this week the remaining 11 TPP countries — including Canada and Mexico — agreed to move forward the deeply flawed TPP model for their countries in a cynically renamed “Comprehensive and Progressive Trans-Pacific Partnership.” We know from our years-long, internationally-coordinated TPP campaign that our sisters and brothers in those nations fought against the corporate-rigged TPP model as hard as we did. We stand in solidarity with them as they continue to mobilize to block the implementation of any newly agreed TPP deal in their countries.

While some of the most egregious provisions pushed by Big Pharma that would have further threatened access to life-saving medicines were fortunately set aside (for now) in the revised TPP-11 deal, most of the TPP’s dangerous rules remain intact. It is shocking, for instance, that Canada, Mexico and others apparently agreed to maintain the infamous investor-state dispute settlement (ISDS) system (with only some minor tweaks), that empowers multinational corporations to attack public interest laws before panels of three corporate lawyers.

We dodged a bullet here in the United States — the TPP would have doubled U.S. exposure to investor-state attacks against U.S. policies by newly empowering more than 1,000 additional corporations in TPP countries, which own more than 9,200 additional subsidiaries in the United States, to launch investor-state cases against the U.S. government.

But, it is beyond perplexing that Canada and Mexico would agree to expand their liability to these ISDS attacks on their laws in the TPP-11. In the North America Free Trade Agreement (NAFTA) renegotiations, the United States has proposed to radically roll back ISDS, which should be good news for Canada and Mexico, since Canadian and Mexican taxpayers have paid $392 million to mostly U.S. corporations who won ISDS attacks against their public interest laws using NAFTA.

The corporate lobby, which has been doing all it can to block the positive NAFTA proposal to roll back ISDS, is undoubtedly rejoicing that the TPP-11 countries have signaled their willingness to accept expansion of the controversial ISDS system.

But the diverse consensus to end ISDS in NAFTA and elsewhere spans the political spectrum, with stark criticism coming from voices as disparate as U.S. Supreme Court Chief Justice John RobertsReagan-era associate deputy attorney general Bruce Fein, the pro-free-trade libertarian Cato Institute think tank, U.S. Senator Elizabeth Warren (D-Mass.)Nobel laureate economist Joseph Stiglitzunions and environmental groups.

The Misconduct of the “World’s Most Admired Companies”

In terms of misconduct, usually what is found among the biggest multinational corporations is exploitation and benefits from immense public subsidy without providing adequate returns to the public. There are numerous examples showing that to be true, but they often manifest as the use of super-exploited workers and the highly profitable use of technology that was originally developed through public investment.

For example, Walmart long hasn’t paid workers living wages, resulting in those workers (among other things) having to use publicly-funded programs such as SNAP. Then there’s computers, which were developed in large part through taxpayer-funded research at the Department of Defense in the latter half of the 20th century. And speaking of the military, Lockheed Martin’s weapons manufacturing has been complicit in U.S. war crimes that violate international law for decades, and Lockheed likely wouldn’t even exist today if it hadn’t been bailed out by the public under the Nixon administration in 1971.

Literally trillions of dollars worth of taxpayer research and subsidies over the past several decades has been fundamental to the advancement of industries such as the aerospace industry, the computer industry, the pharmaceutical industry, the biotechnology industry, and the telecommunications industry. Much of this taxpayer funding into developments that otherwise probably wouldn’t exist today has often translated into the phenomenon known as public costs and private profits, which is hardly a fair return on investment.

Fortune magazine recently released its 2018 list of the World’s Most Admired Companies. From a pool of roughly 1,500 candidates, Fortune picked the 50 “best-regarded companies in 52 industries.” Apple topped the list for the eleventh year straight. General Electric plummeted in the last year from number 7 to number 30. Lockheed Martin and Adidas both cracked the top 50 for the first time.

Of course, Fortune’s ranking is somewhat skewed and self-serving. It is based on a survey of corporate executives and financial analysts. “Admiration” is measured according to criteria that emphasize companies’ financial shape over their track record of integrity and business ethics.

So, we took it upon ourselves to document the dark side of the world’s 50 most admired companies. Ten of the companies are in our Federal Contractor Misconduct Database (FCMD), which includes civil, criminal, and administrative misconduct instances dating back to 1995 for 220 of the federal government’s largest contractors. All but 3 of the top 50 are in Good Jobs First’s Violation Tracker corporate misconduct database, which includes enforcement data from the federal regulatory agencies and the Justice Department dating back to 2000 for over 2,800 companies. Both databases show that most of the companies have multiple instances of misconduct for which they paid millions of dollars in fines, penalties, judgments, and settlements.

The Visionless Society

The writing of Chris Hedges tends to have too much doom and gloom in my view, and I usually prefer the more pedantic approach to the more hyperbolic approach in describing reality, but there’s a lot of quality analysis in this interview/essay Hedges conducted/wrote. I don’t agree with all of it, but then again, I don’t always agree with all the work of others that I post. I do usually try to post about what I see as the truth to this website, however.

I will say that other countries should learn from the mistakes of America though, and there are definitely a lot of mistakes to learn from.

Imagine yourself in early 2019. The Democrats, despite never articulating a political vision other than not being Donald Trump and refusing to roll back Republican legislation such as the 2017 tax bill, have regained the House of Representatives by a slim majority. They vote articles of impeachment. The Senate Republicans, pressured by many within their own party to abandon Trump because of his ineptitude, increasingly erratic behavior and corruption, call on the president to resign. Trump refuses. He uses the megaphone of his office to incite violence by his small, fanatic base. The military, whose deployment as a domestic police force is authorized by Section 1021 of the National Defense Authorization Act, is called into the streets to quell unrest. The United States, by the time the violence is snuffed out, is a de facto military dictatorship.

That such a scenario is plausible to public figures such as Ralph Nader is a sign of the deep decay of democratic institutions. The two major political parties lack a coherent vision. They are subservient to corporate power. They have abandoned the common good. They have turned politics into burlesque. They have rendered the citizenry impotent. The press, especially the electronic press, has transformed news into a grotesque reality show filled with trivia, gossip and conjecture. The elites in both parties, along with the rich and corporations, profit from a naked kleptocracy. Everything is for sale, from public lands to public education. And the juggernaut of corporate power impoverishes the people as it willfully destroys the facade of the hollowed-out democratic state.

“There is no democracy,” Nader said when I reached him by phone in Connecticut. “The only democracy left in this country is they don’t haul you to jail for speaking out. What’s left of democracy is a significant due process, habeas corpus, freedom of speech and probable cause, and that’s violated when there’s a terrorist attack and people are rounded up, like Muslim Americans.”

“Can there be a democracy when you don’t have a competitive electoral system?” he asked. “No. Can there be a democracy when people who come in second win the election? No. Can there be a democracy when it’s tougher to get on the ballot than in any other Western country in the world by an order of magnitude? No. Can there be a democracy when money rules? And not just the money that politicians raise, but the third-party money. No. Can there be a democracy when people have no influence on the military budget? No. It’s not subjected to hearings. It’s ratified on the floor of the House and Senate, but it doesn’t go through the appropriations process. It’s subject to the most anemic, pathetic, servile questioning you can imagine. The Congress has destroyed any kind of democratic participation … in the military and foreign policy. The Congress is [supposed to be] invested in the sovereignty of the people. They [those in Congress] do not comply with the Constitution and the declaration of war authority. They don’t comply with the appropriations process. They have increasingly less public hearings. They are cocooned on Capitol Hill with a force field of money, militarism and materialism. Self-interests block the American people, who can hardly call their member of Congress [because the calls are diverted to voicemail]. This is the latest racket.”

“Trump is playing rope-a-dope with the Democrats,” Nader continued. “He’s such an inviting target—all the lies, the stupidity, the outrage, the racism, the misogyny—they can’t resist. As a result, they’re weakening themselves by not having an affirmative agenda. They’re still talking about how they can learn how to connect with the average person. Can you imagine? It’s now the end of 2017. They’re trying to figure out a message.”

House Democratic Minority Leader Nancy Pelosi, Nader noted, has adopted the mantra “money, message, and mobilization” for the party. “If you start with money, what kind of a message are you going to have?” he asked. “If you don’t have a message, what are you going to mobilize around? So here it is. They still haven’t learned because they will never learn. The party will always be weak, flabby, indentured and dialing for the same commercial dollars as long as the four-time losers continue to run the party. … The country is spinning into the abyss.”

The Democrats have never called for an audit of the Pentagon’s massive and bloated military budget. They do not address corporate crime, champion consumer protection, promote the rights of workers or demand a living wage or full Medicare for all. And because they stand for nothing other than the politesse of identity politics and high-blown liberal rhetoric they have been unable to protect the country from the worst generation of the Republican Party in the nation’s history.

“They don’t even know how to have sonorous political language,” Nader said. “They’re stealing from you—my fellow Americans. A handful of corporate, greedy bosses controlling your government on this national stage and local level, gouging out whole communities, sending industries to fascist communist regimes abroad. They have no loyalties to this country. They have no allegiance to communities other than to exploit them, abandon them. They rose to power on the backs of you, the workers. They were subsidized by Washington and state capitals, by you the taxpayer. The Marines bailed them out when they got into hot water, palling around with dictators and monarchs. Why do you allow them to rule you?”

Nader said the ruling elites have “lost the fear of the people.” This has given rise to “a multifaceted dictatorial government indentured to the plutocratic class symbolized by Wall Street.”

Corporations, enjoying a new tax code that reduces corporate income taxes to 21 percent while individuals pay up to 37 percent, have been awarded the constitutional rights of individuals while individuals have been stripped of their rights.

“The Constitution is increasingly a dead letter,” Nader said.

Corporate media companies view the news division as a revenue stream. They collude with Trump in the daily Gong Show that masquerades as news.

“Trump took the press from profanity to obscenity,” Nader said. “He learned some lessons from ‘The Apprentice.’ He realized the media, with a few exceptions, will do anything for ratings and money. What does he do? He goes down the sensuality ladder. He starts talking openly about racism, rapists and sex, grab them wherever you want and get away with it. They [the media] go wild. That destroyed all the opponents in the Republican primary. Knocked them out day after day, as the press went after sensuality. The coarseness, the brutishness. There’s always a novel attack. He kept them catching up with him. One day he goes after [Sen. Marco] Rubio. Another day, he goes after Hillary. Another day, a veteran family.”

“When The New York Times has two pages of tiny print of Trump’s lies, what impact does it have unless there are remedies and mobilizations that use that material to strengthen the opposition to replace him?” Nader asked. “After a while, people just shrug their shoulders and go back to playing video games. The margin for the defeat of the Democrats by the Republicans can be attributed sufficiently to Rush Limbaugh, Sean Hannity, Michael Savage and all these creeps. They have a massive soliloquy, day after day after day with no rebuttal. And they’ve got the blue-collar worker that way. What kind of a population on the left of center would have allowed that to happen? Using our public airwaves for free.”

Nader said he feared that the population was so effectively anesthetized by mass culture that it might not rise up against the elites. “The U.S. has developed a society with an almost indeterminate absorptive capacity for injustice, abuse and degradation,” Nader said. “There is no civic education in the schools. They don’t know what the Constitution is. They don’t know what the law of torts is. They don’t know where the town hall is. They’re living in virtual reality, swinging between big screen TV and their cellphones. They’re wallowing in text messages. To an extent, they’re excited by the workings of the minds symbolized by Wall Street and Silicon Valley. That’s the young generation. Great changes start with people in their 20s. But look what you’ve got now. You’ve got 10 years of internet connection, cellphones available to any child. That’s one. The second is 24/7 entertainment. The third is the abandonment by the elderly generation. They’ve sort of given up. They don’t know the gadgetry. They don’t know the language. They have their own economic insecurity. They’re not extending any kind of historical experience to the young which contains severe warnings. Watch out. You don’t think it can happen again, [but] it can happen again and again. There’s no verbal, oral tradition between the generations. Less and less. Then you have the political system, which is deep-sinking the society. How are people going to mobilize themselves? Is there a strong union, a labor movement? No. A strong consumer movement? No. They’re losing their privacy. They’re losing their ability to use legal tender. The corporate coercion is, to a degree, now getting rid of cash. Marx never believed that could happen. Why do they want to get rid of cash? They want to drive everybody into an incarcerated penitentiary that is surrounded by mobile payments, credit cards, credit scores, credit ratings, debit cards, constant debt, invasion of privacy, and the ability to assess penalties, charges and unwanted purchases because they control people’s money. That’s Wells Fargo. Wells Fargo got away with 3 million forced, unknown and unwanted credit card sales, auto insurance sales, repairing their ratings. Some people lost their cars and their homes. They’re flipped over into bankruptcy. Nobody has been prosecuted yet.”


“The banks are making huge profits,” Nader said. “Therefore, they’re taking bigger risks. The consumer dollars are being transferred to corporate profits, which are now being transformed into stock buybacks in order to meet the criteria for higher compensation even if it’s against the interest of their own company.”

“From 2005 to 2014, you had $3.9 trillion of stock buybacks, 50 percent of all corporate net profits,” he said. “Fifty percent of the top 500 corporations profited in that decade with stock buybacks. Not to better salaries or shoring up pension plans, not to dividends, not to research and development, not to productive capital and job creation. It’s to stock buybacks. The biggest story untold, or minimally told, in the American economy today. With all this money repatriating from overseas and more corporate offices, they’re planning more stock buybacks. It’s like burning money.”

“Walmart, instead of raising wages for its wage-starved masses, has about $65 billion stock buybacks in the last seven years,” Nader said. “If you take a million Walmart workers and you give them a thousand dollars more a year, that’s $1 billion. Multiply that by 60 to 70 times.”

The speculation, which is trashing the country’s economy, will continue, Nader said, until the financial system collapses and the U.S. defaults on its bonds.

Nader worries that as long as “10 to 15 percent of the American people are well-off” the elites will have enough support to continue the assault.

“Societies have been repressed by far smaller members of well-instituted upper classes,” he said. “That’s what we forget. Eighteenth-, 19th-, 20th-century Europe. A tiny clique controlled them. When there’s any problem it flips over to dictatorship. As long as the contented classes are not upset, the system of control is in lock, like connecting gears.”


Resistance, Nader said, must be local. First we need to organize to take back our own communities, he said. Congressional seats have to be contested by grass-roots organizations that use the power of numbers to overwhelm mass media and corporate money. And we can expect the corporate state to attempt to shut out our message.

“Living wage, taxes, universal health insurance, that have 70 percent support or higher,” Nader said in listing campaign issues. “Breaking up big banks, 90 percent support. Cracking down on corporate crime, similar. People need to give corporate crime a face. This is what happens to your credit. This is what happens to your home. This is what happens to your job. This is what happens to you if you have cancer. This is what happens in the hospital. This is what happens when you’re denied health insurance; you can’t cover your kids. It’s pretty crazy when you can’t make this kind of a pitch to a large audience.”

The greed of the corporate state leaves us unprepared for the ravages of climate change, he warned. And by the time the elites respond it may be too late.

“It’s a race,” Nader said. “Once Miami gets inundated, especially Fisher Island, it might bring the wealthy class to their senses. The problem with solar is it needs a network. Solar panels are fine, but if you’re going to have solar electricity you need a different type of grid system. That requires infrastructure investment.”

“Justice needs money,” he concluded, calling on enlightened elites to spend a billion dollars to fund resistance movements outside the Democratic Party. “The abolition movement needed money. The suffrage movement needed money. They got it from wealthy people. Civil rights movement. The Curry family. The Stern family. The early 1950s, 1960s. Environmental movements got money from rich people. Don’t wait for the Democratic Party. The Democratic Party is an instrument. On the first round you’ve got to use it and control it. On the third round, when you’re mobilized, you can throw it aside. It’s a hollowed feature that is a part of the duopoly. But it’s there. These parties are very vulnerable. They’re shells that rest on money and television ads that nobody likes. Unrebuttable right-wing talk radio. All these can be circumvented neighborhood by neighborhood, but you’ve got to have money. Labor halls are unoccupied. Veteran halls are unoccupied. Libraries are unoccupied. There are a lot of meeting places around. A lot of empty stores can be rented.”

Google “Dutch Sandwich” Tax Shelter Shielded $19.2 Billion in Taxes

The big tech companies generally aren’t criticized enough, and that’s despite the immense power that they wield. The Lupe Fiasco quote of “You should criticize power even if you agree with it” comes to mind and is thought-provoking.

Alphabet Inc.’s Google moved 15.9 billion euros ($19.2 billion) to a Bermuda shell company in 2016, regulatory filings in the Netherlands show — saving the company billions of dollars in taxes that year.

Google uses two structures, known as a “Double Irish” and a “Dutch Sandwich,” to shield the majority of its international profits from taxation. The setup involves shifting revenue from one Irish subsidiary to a Dutch company with no employees, and then on to a Bermuda mailbox owned by another Ireland-registered company.

The amount of money Google moved through this tax structure in 2016 was 7 percent higher than the year before, according to company filings with the Dutch Chamber of Commerce dated Dec. 22 and which were made available online Tuesday. News of the filings was first reported by the Dutch newspaper Het Financieele Dagblad.


The Irish government closed the tax loophole that permitted “Double Irish” tax arrangements in 2015. But companies already using the structure are allowed to continue employing it until the end of 2020.

According to U.S. financial filings, Google’s global effective tax rate in 2016 was 19.3 percent, which it achieved in part by shifting the majority of its international profit to the Bermuda-based entity. Applying that tax rate, Google would have saved $3.7 billion via the 2016 transfer.


For years, U.S. tax law has given American companies an incentive to keep their foreign earnings offshore by allowing them to defer U.S. taxes until they return those profits to the U.S. But that changes this year; the U.S. tax law passed last month will require companies to pay taxes on the overseas income they’ve stockpiled to date at one of two rates: 15.5 percent for income held as cash or cash equivalents and 8 percent for less liquid assets.

Going forward, U.S. companies that pay relatively low global effective tax rates — a sign that they’re using tax havens — would pay a minimum U.S. tax. That new tax, which begins at a rate of 10.5 percent, wouldn’t apply in cases where a company’s global effective tax rate is 13.125 percent or higher.

Google Ireland Ltd. collects most of the company’s international advertising revenue and then passes this money on to Dutch subsidiary Google Netherlands Holdings BV. A Google subsidiary in Singapore that collects most of the company’s revenue in the Asia-Pacific region does the same.

The Dutch company then transfers this money on to Google Ireland Holdings Unlimited, which has the right to license the search giant’s intellectual property outside the U.S. That company is based in Bermuda, which has no corporate income tax. The use of the two Irish entities is what gives the structure its “Double Irish” moniker and the use of the Netherlands subsidiary as a conduit between the two Irish companies is the “Dutch Sandwich.”

Also relevant is this article, published in December of last year: Google’s origin is partially based in research grants provided by the NSA and CIA.