Despite negative media coverage, the recent federal tax cuts continue to benefit millions of Americans. Missouri-based Express Scripts — one of America’s largest pharmacy benefit managers — recently announced $1,200 bonuses for its nearly 27,000 employees, in addition to a new $30 million education fund for their children.
Why? Because of the Tax Cuts and Jobs Act.
To date, more than 400 U.S. employers have announced pay hikes, 401(k) increases, and generous bonuses because of the new tax code. From Apple and Chipotle to your local bookstore, four million working Americans have already reaped direct benefits.
My own employees are on that list, too. As the president and CEO of Joseph’s Lite Cookies in Florida, I run a family-owned, sugar-free cookie business. We bake more than 12 million sugar-free cookies a day, in addition to supplying other diabetic-friendly products. Because of the Tax Cuts and Jobs Act, I will give raises to four key employees—half of our workforce—while also purchasing new computer systems and creating new product packaging for international expansion.
Nonetheless, Senate Democrats — none of whom voted for these tax cuts — deny the existence of job creators like me. Sen. Ron Wyden, D-Ore., recently called the Tax Cuts and Jobs Act “a problem for the middle class” because “CEOs are funneling the tax windfall into buybacks that inflate the value of stocks held by affluent executives and wealthy shareholders.” Sen. Sheldon Whitehouse, D-R.I., suggested the new tax code is only “great for big shareholders because it jacks up share prices.”
The liberal media, meanwhile, is an all-too-willing echo chamber. In February, CNN released a “tax cut scoreboard” pegging American workers' benefits at just $6 billion and shareholders at a shocking $171 billion. New outlets routinely highlight the “wave in corporate share buybacks” to discredit Republican tax cuts.
But there’s just one problem. Even if the tax cuts were primarily financing stock buybacks, millions of Americans would still be better off!
Just ask yourself: Are one-percenters the only ones who invest? Are “shareholders” evil people just because they hold shares?
Of course not. The majority of U.S. households (54 percent) own stocks. More than 54 million American workers are active participants in 401(k) plans and other defined contribution retirement plans. Meanwhile, 42.5 million have an IRA, and nearly 12 million individuals hold 529 education savings accounts. Are these people not investors? Do buybacks not help them?
Because stock buybacks boost share prices, they increase the values of 401(k) plans, 529 accounts, and other investment platforms, benefitting all the investors involved. As Forbes contributor Ryan Ellis recently explained, it’s Economics 101: Stock buybacks reduce the number of shares available, driving up the value of remaining shares. Therefore, remaining shareholders — millions of whom are in the middle class — get richer.
In other words, corporate money flows from the “one percent” to individual investors — people like you and me. As economic analyst Larry Kudlow puts it: “The shares go from the sort of corporate lockbox into hands of ordinary investors, who will probably invest the money more wisely.”
Ironically, stock buybacks also help finance defined benefit pension plans — the same stock-funded, budget-busting plans that Democrats vehemently defend at the state and local level. When stock prices increase, the unfunded liability of such pension plans decreases, leaving state and local governments with fewer fiscal headaches.
Whether it’s paying for higher wages or stock buybacks, the Tax Cuts and Jobs Act is a win-win for working Americans. Democrats in denial are just spreading lies for political purposes.
Joseph Semprevivo is the president and CEO of Joseph’s Lite Cookies in Florida. He is an adjunct professor of finance, real estate and insurance at Indian River State College and the best-selling author of “Madness, Miracles, Millions.”
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