It’s a Myth That Corporate Tax Cuts Mean More Jobs
“The arithmetic for us is simple,” AT&T’s chief executive, Randall Stephenson, said on CNBC in May. If Congress were to cut the 35 percent tax on corporate profits to 20 percent, he declared, “I know exactly what AT&T would do — we’d invest more” in the United States.
Every $1 billion in tax savings would create 7,000 well-paying jobs, Mr. Stephenson went on to say. The correlation between lower corporate taxes and more jobs, he assured viewers, runs “very, very tight.”
.. this bold jobs claim merits examination. Notably, it comes from the chief executive of a company that’s already paying comparatively little in federal taxes.
.. According to the Institute on Taxation and Economic Policy, AT&T enjoyed an effective tax rate of just 8 percent between 2008 and 2015, despite recording a profit in the United States each year, by exploiting tax breaks and loopholes.
.. the company, by our analysis at the Institute for Policy Studies, reduced its total work force by nearly 80,000 jobs between 2008 and 2016
.. The company has also spent $34 billion repurchasing its own stock since 2008
.. This is money that could have gone toward research and development or hiring.
.. Because most executive compensation these days is based on stock value, higher share prices can raise the compensation of chief executives and other top company officials.
.. If claims about the job-creation benefits of lower tax rates had any validity, these 92 consistently profitable firms would be among the nation’s strongest job creators. Instead, we found just the opposite.
.. American multinationals hold $2.6 trillion in profits “offshore,” on which they would owe $750 billion in federal taxes if the money was repatriated.