Comcast reveals how it’s really spending its tax windfall
Founding Editor, Think Progress
In December, Comcast announced that based “on the passage of tax reform” it would award a $1,000 bonusto about 100,000 employees. That’s a total expenditure of $100 million.
That sounds like good news for the company’s workers. But it is not, principally, how Comcast is spending its tax windfall.
On Wednesday, in a press release that does not mention the GOP’s recent tax overhaul, Comcast announced massive expenditures on dividend payments and share repurchases. The company said it would increase dividends to shareholders, which totaled $2.9 billion in 2017, by 21 percent. That amounts to an additional $609 million in dividends. Comcast also plans to spend at least $5 billion, and as much as $7 billion, on repurchasing its own stock.
Dividends and stock repurchases enrich investors, but do nothing for workers and do little to stimulate economic growth. Repurchasing stock, in particular, is a popular way for companies to drive up their stock price that can cause economic stagnation. This is because repurchases are a way of “inflating paper profits without producing anything of tangible value,” as CNBC reports.
According to Wednesday’s press release, Comcast is spending at least 56 times more on dividends and stock repurchases than on bonuses for its workers.
At the same time as Comcast announced its bonuses, the company also quietly laid off “more than 500 sales employees.” AT&T also issued a flashy press release touting bonuses it attributed to tax reform and then laid off thousands.
The bonuses are certainly welcomed by workers, but they do not represent a significant portion of Trump’s $1 trillion corporate tax cut. A ThinkProgress analysis shows at least 99.8 percent of the tax cut is not being passed to workers in the form of bonuses. The analysis is based on a list maintained by Americans for Tax Reform, a right-wing group, of companies that have announced bonuses.
The tax cut that President Trump signed into law in December was very unpopular. Just 24 percent of the public described it as “good idea” a few days before passage. One reason for the low approval numbers is because the overwhelming majority of Americans do not believe that corporations need a tax cut.
Press releases attributing bonuses to the tax cuts are a relatively cheap way of increasing public support for the plan. But they also distort the truth about how corporations are spending their tax windfall.
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Reposted from Think Progress
