These companies claimed the GOP tax bill would ‘boost jobs.’ Now they’re laying off employees.
The businesses who led the charge for a massive cut in the corporate tax rate still claim it is working great.
In the lead-up to the enactment of the Tax Cut and Jobs Act, Donald Trump’s massive tax cut that mostly benefited rich people and big corporations, a coalition of powerful business interests formed with one major priority in mind: slashing the corporate tax rate. The Reforming America’s Taxes Equitably (RATE) Coalition comprised dozens of companies and trade groups that all insisted lowering corporate taxes would mean more jobs.
A ThinkProgress review found that about half of RATE Coalition’s members have made layoffs since the law’s enactment. In other words, not only did the expensive tax cut not bring more jobs, it couldn’t even forestall significant job losses.
In 2017, the RATE Coalition’s website identified 32 companies and trade groups who had come together around the singular mission to “reform the tax code, making it fairer and simpler and improving the prospects of growth and jobs in the U.S. economy by reducing the corporate income tax rate to make it more competitive with our nation’s major trading partners.” Together, they constituted a 501(c)(4) tax-exempt organization (first launched in 2011) and promised that a corporate tax rate reduction would “boost job creation and economic growth.”
Their membership list was a who’s who of Big Business: Aetna Inc., AT&T, Altria Client Services, Association of American Railroads, Boeing, Brown-Forman, Capital One, Cox Enterprises, CVS Caremark, Edison Electric Institute, FedEx, Ford, General Dynamics, Home Depot, Intel, Kimberly-Clark, Liberty Media, Lockheed Martin, Macy’s, National Retail Federation, Nike, Northrop Grumman, Raytheon, Reynolds American, S&P Global, Southern Company, Synchrony Financial, T-Mobile, UPS, Verizon, Viacom, and Walmart.
In just the second quarter of 2017 alone, their combined corporate lobbying on taxes and other issues exceeded $48 million.
Their coalition lead the charge to lower the 35-percent corporate tax rate (which very few of the biggest companies actually paid) to just 20 percent. They mobilized support with an ad campaign that they say included more than “110 million ad impressions in key states” and “240,000 contacts to Congress.”
The pressure campaign mostly worked: Trump called the corporate tax rate reduction non-negotiable, and the final bill included a 21-percent top corporate tax rate. The RATE Coalition strongly backed the legislation, and Trump signed the law on Dec. 22, 2017, to the coalition’s delight.
But as Phil Collins once sang, “something happened on the way to heaven.” Corporate coffers swelled and shareholders reaped the benefits. Yet even with this windfall, layoffs followed at many of the RATE Coalition member companies.
Nearly a year later, the group is now focused on a new mission: “to ensure that the American people — who ultimately bore the burden of what was previously the highest corporate tax rate in the industrialized world – will not be deprived of their meaningful tax reform wins.” Its membership list has apparently changed a bit: McGraw Hill, Financial, Time Warner Cable, and Walt Disney are now in the coalition; Boeing, Brown-Forman, Capital One, Home Depot, Intel, S&P Global, Viacom, and Walmart have vanished from the list. CVS-Caremark is also no longer listed, though it merged with Aetna which is still part of the coalition. A spokesperson for S&P Global told ThinkProgress that it is still a member of the RATE Coalition as well.
Of those 35 current and possibly former members, about half have seen layoffs of their employees (or their member’s employees) or other job eliminations in the past year.
AT&T
The Guardian reported in August that while AT&T received a windfall of tens of billions from the tax bill, its outsourcing and facility closures continued apace. According to the Communication Workers of America union, the company had already laid off about 7,000 workers since the company celebrated the bill’s passage. AT&T disputed this number at the time and told ThinkProgress that it hired nearly 16,000 workers in the first 10 months of 2018.
A company spokesperson wrote in an email that AT&T has said it “plans to invest an additional $1 billion in the U.S. this year as a result of tax reform, and that research shows that every $1 billion in capital invested in the telecom industry creates about 7,000 good-paying jobs for American workers, across the broader economy.” She added that while “technology improvements are driving higher efficiencies and there are some areas where demand for our legacy services continues to decline, and we must sometimes adjust our workforce in some of those areas,” the bulk of their “union-represented employees have a job offer guarantee that ensures they are offered another job with the company if their current job is eliminated.”
Brown-Forman
A June report in the Louisville Courier Journal noted that the makers of Jack Daniel’s and other alcoholic beverages had recently “extended early retirement offers to about 150 salaried employees, looking to shed dozens of workers earning solid six-figure salaries.” Brown-Forman did not respond to a ThinkProgress inquiry about the job cuts.
Capital One
At least two major job cuts were reported in 2018 at Capital One: one impacting 180 employees in Delaware and another affecting 286 employees in Texas. Capital One did not respond to a ThinkProgress inquiry about the job cuts.
Cox Enterprises
Cox’s automotive division decided to make several hundred layoffs, according to an October report in Automotive News. A spokesperson told the publication “These changes, while difficult, are needed for Cox Automotive to deliver on the most relevant products and services for our clients and the industry.” Cox did not respond to a ThinkProgress inquiry about the job cuts.
Ford
Amid Donald Trump’s tariffs — which cost Ford a reported $1 billion — the company announced in October a major restructuring that would include layoffs. They said these cuts were “to support the company’s strategic objectives, create a more dynamic and empowering work environment, and become more fit as a business.” This came after thousands of hourly assembly plant workers in Michigan were temporarily laid off by the company. Ford did not respond to a ThinkProgress inquiry about the job cuts.
General Dynamics
In February, General Dynamics reportedly filed documentation warning it would soon lay off 73 employees in Virginia. The mammoth defense contractor’s San Diego-based General Dynamics-NASSCO subsidiary announced another 300 to 350 layoffs in August. General Dynamics did not respond to a ThinkProgress inquiry about the job cuts.
Intel
In June, Intel announced it had “decided to reduce its workforce by laying off approximately 65 employees at its facilities” in the Silicon Valley. This came on the heels of the company’s decision to shutter its smart glasses division, which it predicted would also mean some layoffs for employees on that 200-person team. Intel did not respond to a ThinkProgress inquiry about the job cuts.
Kimberly-Clark
The New York Times reported in January that Kimberly-Clark, makers of Kleenex and Huggies, would cut 5,000 to 5,500 jobs — about 13 percent of its work force. According to that report, “To help pay for the cuts and other restructuring moves, Kimberly-Clark said, it will use savings from the recently enacted corporate tax cut.” Kimberly-Clark did not respond to a ThinkProgress inquiry about the job cuts.
Lockheed Martin
The defense contractor announced at the end of July that it was laying off all of the employees in its 500-person Sikorsky-Lockheed Martin facility in Palm Beach, Florida. A Lockheed Martin spokesperson emailed to say she was out of the office and would “look to send you our hiring numbers for 2018,” but did not do so by press time.
Macy’s
Macy’s announced multiple store closures in 2018 as part of its previously announced downsizing. Additionally, it laid off several members of its human resources team. A Macy’s spokesperson told ThinkProgress that the store closure were all part of its 2016 decision to close 100 stores — most of which have now been carried out — and that the human resources reductions were tied to that. Asked whether the company’s windfall from the tax cuts had in any way lessened the number of closures and layoffs, she said only, “I wouldn’t tie the two together.”
Northrop Grumman
The defense contractor Northrop Grumman announced 59 layoffs at Fort Hood in Texas in January 2018. The same month, it increased its predicted layoffs at Schriever Air Force Base in Colorado from 50 to 85. Northrop Grumman did not respond to a ThinkProgress inquiry about the job cuts.
T-Mobile
Following the April announcement that T-Mobile and Sprint would attempt to merge, the company’s union predicted such a move could mean 28,000 job cuts. But according to the Kansas City Star, the company was already preparing to layoff 500 employees at its headquarters this spring.T-Mobile did not respond to a ThinkProgress inquiry about the job cuts.
Verizon
In October, Verizon reportedly offered a “voluntary severance package” to 44,000 employees and outsourced thousands of information technology jobs to a company based in India. The CEO told workers the move was “an opportunity to find more efficiencies in the size and scope of our V Team and help expedite the building of an innovative operating model for our future.” Verizon did not respond to a ThinkProgress inquiry about the job cuts.
Viacom
In August, after acquiring the California-based Awesomeness, the entertainment company reportedly laid off 98 employees — half the staff. Viacom did not respond to a ThinkProgress inquiry about the job cuts.
Walmart
In January, Walmart closed 63 Sam’s Club locations, laying off about 10,000 employees. The subsidiary’s CEO told the Wall Street Journal that this was part of a strategy “to transform the business.” The company also reportedly made hundreds of layoffs at its Walmart stores and corporate headquarters. The layoffs came almost at the exact same time as the company made a big show of giving a bonus to some employees in recognition of the tax cuts. Walmart did not respond to a ThinkProgress inquiry about the job cuts.
Walt Disney
According to Variety, Disney’s Consumer Products Interactive Media Group laid off fewer than 50 employees in September. Deadline also reported layoffs of fewer than 20 employees at the company’s Digital Disney Network in November. Walt Disney did not respond to a ThinkProgress inquiry about the job cuts.
Association of American Railroads
The trade association for the rail industry represents railroads across the nation. At least two of its members, Union Pacific and CSX, have reportedly made layoffs in 2018. The Association did not respond to a ThinkProgress inquiry about the job cuts.
Edison Electric Institute
The trade association for the electric industry represents numerous American electrical utilities. At least two of its core members, AES and PPL, reportedly decided to cut jobs in 2018, as did two affiliated companies, General Electric and Schneider Electric. A spokesperson told ThinkProgress, “The benefits from the Tax Cut and Jobs Act are flowing back to electric company customers, as electric companies have announced almost $7 billion in tax reform benefits heading back to customers.”
The National Retail Federation
The National Retail Federation does not publicly disclose its members, but major retail companies cut thousands of jobs in 2018, including many positions at companies like Toys ‘R’ Us, Macy’s, Sears/Kmart, J.C. Penney, and Foot Locker.
A spokesperson for the RATE Coalition told ThinkProgress in an emailed statement:
Quote:Overall, more than 2.1 million new jobs have been created since the passage of tax reform, further igniting an economy that recently reclaimed its spot as the world’s most competitive and has enjoyed the ‘strongest back-to-back quarters of growth since 2014.’ And as the unemployment rate sinks to a generational low and wages rise at the fastest pace since 2009, ‘U.S. small business optimism just hit its highest level in history.’
“Such tremendous success demonstrates precisely why the achievement of a globally competitive corporate tax rate was a bipartisan priority pushed by high-profile Democratic voices for decades, from former presidents Bill Clinton and Barack Obama, to current leaders Nancy Pelosi and Chuck Schumer, to the Center for American Progress, which proposed a lower statutory rate for businesses in 2012.
But regardless of economic growth and confidence, the people who promised job growth in exchange for rate cuts have already broken their promises. As the new Congress considers how to fund key programs and address the nearly $1 trillion budget deficit the tax cuts helped fuel, they might be less likely to take the RATE Coalition at its word.
