How Apple and Other Big Companies Are Really Using Trump’s Corporate Tax Cuts

Have you been keeping score on the GOP tax plan? If not, here’s a summary of the only major law passed by Donald Trump and the Republican Congress: It’s very unpopular among working-class Americans.

For reasons why people feel this way, just check what top companies have done with their windfalls. Instead of a hiring spree at AT&T and a new Harley-Davidson plant, we saw 4,000 layoffs by the telecom giant and Harley’s Missouri factory shuttered. (It moved to Thailand.)

Meanwhile, stock buybacks have soared to record levels, which is exactly what critics of the law said would happen. Here’s a look at the $1 trillion America’s top companies have spent on shareholders, including the embarrassment of riches Apple handed out (page 12).

12. Comcast

comcast van

Comcast laid off 500 employees in Philadelphia in December 2017. | Joe Raedle/Getty Images

  • Total stock buybacks: $5 billion

It’s hard to be less popular than Comcast, a company that somehow makes TV and internet a source of rage for its customers. Well, it won’t win over any new fans for its moves following the tax cuts.

Right around Christmas, Comcast laid off 500 employees in Philadelphia before raising its shareholder dividends and announcing $5 billion in buybacks.

Next: You probably never heard of Applied Materials, but $6 billion in buybacks should get your attention.

11. Applied Materials

Applied Materials

Applied Materials provides materials to companies that make computer chips and screens. | Applied Materials via Facebook

  • Total stock buybacks: $6 billion

You may not be familiar with Applied Materials, a company that provides materials to companies that manufacture computer chips and screens. However, it has been on investors’ radar ever since it made $6 billion in buybacks and doubled its dividend.

According to Kiplinger’s, that was enough for Credit Suisse analysts to give Applied Materials a “buy” rating. In a nutshell, that’s how stock buybacks increase a company’s value while keeping money out of employees’ pockets.

Next: The maker of Oreos said it would spend tens of billions on its own stock after the tax plan passed.

10. Mondelez International

Mondelez makes Oreo cookies and other popular foods. | Tim Boyle/Getty Images

  • Total stock buybacks: $6 billion

In the case of Mondelez, maker of Cadbury chocolate bunnies and Ritz crackers, you see why people consider the GOP tax plan a simple case of making the rich even richer.

The company already had $13.7 billion in stock buybacks on deck when Trump signed the tax plan into effect. Afterward, Mondelez didn’t say it would give employees raises, but it did say it would add another $6 billion in buybacks.

It adds up to a $20 billion gift to shareholders.

Next: A giant tax cut meant more buybacks — but not lower prices — for eBay.

9. eBay

EBay

eBay got a tax break from the GOP, but it didn’t lower fees for shoppers. | JasonDoiy/iStock/Getty Images

  • Total stock buybacks: $6 billion

With eBay, we get a look at how “tax reform” focused on corporations and ignored the average American. When the online auction site got its tax break from the GOP, the company didn’t announce it would lower fees or subsidize shipping costs.

Instead, it looked at the $1 billion it planned to spend on stock buybacks and added another $6 billion to the pile.

Next: It’s a good time for Visa stockholders.

8. Visa

Visa announced a $7.5 billion stock buyback plan after Trump signed the new tax law. | Justin Sullivan/Getty Images

  • Total stock buybacks: $7.5 billion

Since the economy has been booming for several years, it struck some opponents of the tax plan as strange to give firms such a big handout. You can see it in the case of Visa, which announced a $7.5 billion buyback plan after Trump signed the law.

Kiplinger’s said Visa “otherwise hasn’t found anything better to do with” the $9 billion it had in the bank. To the average person, you’d think this gift from Congress might warrant a better salary or better benefits for workers.

But that’s not how corporations work.

Next: Just Google how Alphabet spent its tax cuts.

7. Google (Alphabet)

Google Headquarters with bikes on foreground

Google made $8.6 billion in stock buybacks following the tax law. | SpVVK/iStock/Getty Images

  • Total stock buybacks: $8.6 billion

How do you make $8.6 billion in buybacks seem edgy? Google tried its Mountain View-hipster best by making the actual amount $8,589,869,056, Kiplinger reported.

In math circles, that’s “a perfect number.” To Google employees, it probably just seems like a missed opportunity.

Next: This company used its tax cuts to prop up a poor business model.

6. Amgen

Amgen headquarters

Amgen took advantage of the new tax law to make up for some of its business failings. | Coolcaesar/Wikimedia Commons

  • Total stock buybacks: $10 billion

Corporations really loved one thing about Trump’s tax plan: There were absolutely no strings attached. Any company that wanted to lay off employees and offshore jobs to Asia could do so (and they did).

In Amgen’s case, the company used the free money to make up for its business failings. Kiplinger reported one RBC Markets analyst describing the move as “financial engineering at its finest,” adding that $10 billion in buybacks and its tax windfall simply paid old bills.

Wasn’t the law supposed to create jobs and increase wages like Paul Ryan said?

Next: Big Pharma is swimming in cash, but drug prices won’t go down.

5. Abbvie

Abbvie

Abbvie increased its quarterly dividend by 35% after the tax law passed. | AbbVie via Facebook

  • Total stock buybacks: $10 billion

Abbvie, maker of Humira and other drugs, did what you expect a pharmaceutical company to do: It committed $10 billion in buybacks. Meanwhile, it increased its quarterly dividend by 35%, too.

Know what Abbvie didn’t do? Lower the price of Humira. In fact, just as the tax cuts were being passed, Abbvie raised the price of Humira five times for almost 10%.

Next: If taxpayers wonder why infrastructure continues crumbling, maybe the billions in tax cuts for Pepsi can help explain.

4. PepsiCo

Pepsico

PepsiCo spent billions repurchasing shares. | Don Emmert/AFP/Getty Images

  • Total stock buybacks: $15 billion

If you want to see how much cash corporations got from Trump’s tax cuts, take a quick look at PepsiCo, which earns $5 billion per year. The company announced it would spend $15 billion (i.e., three times its annual revenue) to repurchase shares.

That would be like the average American getting tens of thousands in tax cuts. Yet working-class people haven’t gotten much at all from this law.

Next: One of the nation’s sleaziest companies did just what you’d expect.

3. Wells Fargo

Wells Fargo sign on highrise building

The lowest-paid Wells Fargo employees received a small raise, while the company spent $22.6 billion on stock buybacks. | Justin Sullivan/Getty Images

  • Total stock buybacks: $22.6 billion

Remember Wells Fargo — the bank that defrauded homeowners, repossessed U.S. soldiers’ cars while on tour in Afghanistan, and otherwise robbed and cheated American customers? Well, the bank got a huge tax cut from Trump and the GOP.

Then it spent $22.6 billion on stock buybacks. What did workers get? Those making the Wells Fargo minimum of $13.50 got a raise to $15. You don’t a calculator to see that’s peanuts.

Next: This tech company’s massive buybacks immediately juiced its stock price.

2. Cisco

The Cisco Systems World Headquarters located in San Jose

Cisco hasn’t increased hiring since the tax cut, but it did spend plenty on stock buybacks. |  wellesenterprises/Getty Images

  • Total stock buybacks: $25 billion

A sum of money like $25 billion is hard to put in context for most people. After all, it’s the annual GDP of Jamaica and Haiti combined.

Meanwhile, it’s also the massive figure Cisco is spending on its own stock after taking Trump’s tax cuts. Altogether, since it already planned to spend $6 billion on buybacks, Cisco is spending $31 billion on stock purchases.

Yet there’s been no major hiring at Cisco.

Next: Did someone say $100 billion?

1. Apple

Aerial photo of Apple new campus under construction in Cupetino

Apple is the third-richest company in the world. | SpVVK/iStock/Getty Images

  • Total stock buybacks: $100 billion

When you have the third-richest company in the world, a 40% tax cut means countless billions. In fact, it meant so much money for Apple, the company said it would spend $100 billion on buybacks and increase dividends by 16%.

That’s an unbelievable amount of cash to lavish on stockholders. So has anyone heard of a new Apple plant in America, or employees getting big raises? Neither have we.

On the other hand, Apple did give out $2,500 one-time bonuses to employees. The thing was, they paid that out in company stock.

Check out The Cheat Sheet on Facebook!

More Articles About:   ,  

More from The Cheat Sheet