Trump Tax Still Hasn’t Trickled Down; Big Oil, Pharma, and Wall Street Make $$$
May 15, 2018
The industries reaping the biggest windfalls from the Trump tax aren’t passing their savings onto consumers, and in many cases, costs to consumers are even going up.
The biggest pharmaceutical companies announced more than $45 billion in stock buybacks as a result of the Trump tax, but made no plans to lower drug prices and even cut back on research.
USA Today’s Andy Slavitt: “Booker’s office examined the 10 largest U.S. based pharmaceutical companies — Pfizer, Merck, Johnson & Johnson, Gilead, AbbVie, Amgen, Bristol-Myers Squibb, Eli Lilly, Celgene and Mylan — and how they plan to use their tax windfalls. The study, based on 4th quarter earnings calls, press releases and public statements, shows that in its early days, the new tax law has been almost entirely a boon to shareholders. Five drug companies alone have announced $45 billion in stock buybacks — accounting for 21% of the largest stock buybacks announced this year.”
USA Today’s Andy Slavitt: “What about drug prices? Booker’s analysis suggests that nothing has been done. None of the 10 companies said they planned to make any pricing reduction announcements in the wake of the tax law. In fact, drug prices continue to climb.”
Los Angeles Times: “Pfizer, pocketing a big tax cut from Trump, will end investment in Alzheimer's and Parkinson's research.”
Big banks got huge windfall from the Trump tax, and then proceeded to raise borrowing costs and banking fees.
New York Times: “Banks Are Big Winners From Tax Cut.”
Huffington Post: “Just over a month after Republicans pushed through a sweeping corporate tax cut from which Bank of America stands to gain billions of dollars, the bank is set to start charging its poorest customers $12 a month for the privilege of having a checking account.”
Bloomberg: “As U.S. banks were tallying up the billions of dollars in extra profits they’ll reap from the sweeping tax cuts signed into law by President Donald Trump, they were quietly delivering unwelcome news to local governments: The interest rates on their loans were about to go up. That’s because banks often include clauses in contracts when they lend to states and cities giving them the right to trigger the increases if legal changes lower the returns on their investments. The tax cut did just that. Slashing the corporate rate made the tax-exempt loans less valuable than before compared with other assets, once federal taxes are taken into account. So companies including Wells Fargo & Co., U.S. Bancorp and SunTrust Banks Inc. demanded more interest to make them whole.”
Major oil companies used their massive tax savings on investors rather than supporting the local economy, all while gas prices continue to rise.
Houston Chronicle: “Oil Companies To Reap Windfall In Tax Cuts, But Shareholders Get The Lion’s Share”
CBS News: “You may have noticed, gas prices are on the rise and hitting levels not seen in more than three years. Gas prices nationwide are up a nickel in just the last week. That’s 20 cents in the last month, according to AAA.”
Health care companies only used a tiny fraction of their tens of billions of dollars in tax savings to actually benefit patients, while insurance premiums have continued to surge from Trump and Republicans’ health care sabotage.
Axios: “Health care companies will add tens of billions of dollars to their bottom lines this year thanks to savings from the Republican tax cut package. But only a fraction of that money will benefit patients. Why it matters: Even though a lower corporate tax rate frees up more cash for a health care system that more patients are finding increasingly unaffordable, patients should not expect the health industry’s windfall to lead to lower premiums, reduced prices or major industry changes.”
Bloomberg: “The Republican-led attempt to overturn the health law last year caused premiums to surge, as insurers expected that undoing the law’s requirement that all Americans have health insurance would leave them with a smaller and sicker pool of clients. The repeal effort ultimately failed, but the Trump administration overturned the penalty for going without insurance, and opened the door for insurers to sell cheaper, skimpier plans.”