Bonuses from 2017 tax cuts amounted to $28 per worker, Congressional researchers say
- Corporate bonuses given out since the Tax Cuts and Jobs Act was passed amount to just $28 per U.S. worker, according to a new analysis from the nonpartisan Congressional Research Service.
- The total amount spent on bonuses was no bigger than 3% of the total amount spent on corporate tax cuts in the bill.
- From 2017 to 2018, companies paid $76 billion less in taxes.
When the Tax Cut and Jobs Act was signed into law in December 2017, many U.S. companies responded with press releases touting one-time bonuses to their workers. But how much of the savings from lower corporate taxes really went to workers?
Just $28 per worker, according to a new analysis from the Congressional Research Service.
A total of $4.4 billion went out in bonuses last year, estimated the nonpartisan office that's part of the Library of Congress. Divided among the 157 million people in the workforce, that comes out to under $30 apiece. "This amount is 2% to 3% of the corporate tax cut," wrote Jane Gravelle and Donald Marples, the report authors.
For comparison, the amount of money companies spent buying back stock was over $1 trillion, the CRS said. In other words, businesses spent 246 times as much money on their own stock as they did on worker bonuses.
It's unclear whether $28 shows an increase over whatever bonuses workers might have gotten without the tax cuts. The left-leaning Economic Policy Institute, which recently analyzed federal pay data, found that the average 2018 bonus was just 1 cent higher than the average bonus in 2017. "This is not what the tax cutters promised, or bragged about soon after the tax bill passed," EPI Senior Fellow Lawrence Mishel wrote.
The report adds to a year's worth of research by government, business and nonprofit entities indicating that the tax cuts didn't spur the widespread economic boom that was used to justify them.
The overall economy grew 2.9% in 2018—the same pace as it grew in 2015, and below the 3% annual growth on which Mr. Trump staked his campaign. Average wages, after inflation, grew at 1.2%, according to the Bureau of Labor Statistics.
Most Americans—about 4 in 5—paid less in taxes last year, with a median tax cut of $900. But many didn't realize their taxes went down through lower withholding numbers on their regular paychecks. Instead, they're asking what happened to the $4,000 to $9,000 raise the president promised them a year and a half ago.
"A one-time bonus is not a $4,000 raise," Christopher Shelton, president of the Communication Workers of America union, said in March before a House committee. The union's members work at wireless telecom companies, some newspapers, TV networks and General Electric.
Shelton added: "We tried to get our major employers to sign something saying they would give our members $4,000 in raises, because that's what everybody was touting. Not one employer signed that."
