Trumps Tax Cuts at Work

Remember when AT&T said that the Trump tax cuts would mean 7,000 new jobs and billions in new investment?

Well, the numbers are in, 23,000 job cuts and cut $1.4 billion in capital investments.

Well, I guess that senior executives want to cash in their stock options before tax rates go up again:

AT&T has cut more than 23,000 jobs since receiving a big tax cut at the end of 2017, despite lobbying heavily for the tax cut by claiming that it would create thousands of jobs.

AT&T in November 2017 pushed for the corporate tax cut by promising to invest an additional $1 billion in 2018, with CEO Randall Stephenson saying that "every billion dollars AT&T invests is 7,000 hard-hat jobs. These are not entry-level jobs. These are 7,000 jobs of people putting fiber in ground, hard-hat jobs that make $70,000 to $80,000 per year.

The corporate tax cut was subsequently passed by Congress and signed into law by President Trump on December 22, 2017. The tax cut reportedly gave AT&T an extra $3 billion in cash in 2018.

But AT&T cut capital spending and kept laying people off after the tax cut. A union analysis of AT&T's publicly available financial statements "shows the telecom company eliminated 23,328 jobs since the Tax Cut and Jobs Act passed in late 2017, including nearly 6,000 in the first quarter of 2019," the Communications Workers of America (CWA) said yesterday.

………

"AT&T's annual report also shows the company boosted executive pay and suggests that after refunds, it paid no cash income taxes in 2018 and slashed capital investments by $1.4 billion," the CWA wrote.

AT&T reported $21.6 billion in capital expenses in 2017 and $21.3 billion in 2018, a cut of $300 million. CWA told Ars that the cut is $1.4 billion when "excluding federal government reimbursements for the construction of FirstNet," AT&T's government-funded public safety network.

AT&T capital spending is already down more than $900 million this year, as the telco reported Q1 2019 capital expenditures of $5.18 billion, down from $6.12 billion in Q2 2018.

This is not managing a business, this is looting.

We need to repeal SEC Rule 10b-18, which legalized stock buybacks. (Previously they were considered a form of insider trading)

The rule, adopted in 1982, has diverted trillions of dollars from investments in new plants and equipment to self dealing by senior management.