Companies are using savings from lower tax rates to finance corporate stock buybacks, according to a report from Senate Democrats, who are calling on the Government Accountability Office to track how companies are making use of tax cuts.
Since January 2018, companies have announced plans to repurchase $97.2 billion in stock, the report found. "This report shows that the first priority of multinational corporations receiving the biggest windfalls from the Republicans' tax scam was to present nearly $100 billion in giveaways to their wealthy investors and senior executives," Senate Finance Committee ranking member Ron Wyden, D-Ore., said in a statement. The Senate Democrats argue that the companies should spend at least as much on employee raises and hiring more workers.
In a Feb. 7 request to GAO, Mr. Wyden cited a white paper from the White House's Council of Economic Advisers predicting that lowering the corporate tax rate to 20% from 35% would boost average family incomes by $4,000. The rate was eventually lowered to 21%. "Recent actions have cast further doubt on the benefit American workers will see from corporate tax cuts," Mr. Wyden said in the letter to the GAO. "Americans deserve an honest accounting of what corporations are actually doing with the estimated trillion dollars in corporate tax cuts provided to them in this legislation."
He also asked GAO to study the IRS' ability to administer and enforce the new law.