One of the major arguments Republicans are making as they push through their tax overhaul is that the working and middle classes will benefit because companies will use their tax-cut windfall to invest in employees and capital investments that will boost suppliers and construction companies. Maybe, but "many economists are skeptical that the tax savings will transform business decisions," The New York Times reports, and a recent survey of CEOs found that companies were more likely to reward investors than workers. This appeared to come as a surprise to Gary Cohn, President Trump's top economic adviser. It's not a surprise to Todd Carmichael, co-founder and CEO of La Colombe Coffee Roasters in Philadelphia.
"I can tell you what no other CEO wants to tell you," Carmichael writes in an op-ed in The Philadelphia Inquirer: "A half-trillion dollars of corporate tax giveaways proposed by the GOP aren't going to do a thing for the middle class, or create a single job. Because what every CEO knows but won't tell you is this: A tax break for their company simply means a fatter bottom line. Not jobs. Not investment." CEOs have "a powerful fiduciary duty to return all profits to shareholders — not to the employees, or the suppliers, or the community and certainly not to the unemployed or left behind," he explained. "Profit goes to shareholders (and the CEO) and not to the employees."
Tax cuts aren't bad in themselves, and Republicans could have focused them on families and "people, where there is no fiduciary duty to push the stimulus to the investment class," Carmichael writes. But the kind Republicans are passing are appropriate for when the "when the economy needs to be goosed," and "what every CEO knows but will not tell you is that the reverse conditions are actually true." You can read his op-ed at The Inquirer.