TThe 2017 law on tax reductions and jobs was sold to the American public as a Boon for workers’ families and a catalyst for economic growth. At the time, President Trump and his allies in Congress promised that the reduction in the tax rate of companies by almost 50% would lead to more jobs, higher wages and a wave of investment in innovation and American infrastructure.
Now Trump is back in office, and the first order of business of the Republicans of Congress is working hours to extend Trump’s tax discounts and, in the words of House Ways and Means, President Jason Smith, “shoot the promises of President Trump to the American people”.
But eight years later, it is clear how empty these promises were. TCJA has the profits of companies while delivering little for workers’ families. Instead of reinvesting their manneurs, the companies bordered the pockets of their shareholders, fueling record profits and exacerbating inequalities.
An April 2025 collaborative Groundwork report has examined the prices and profits of companies since the promulgation of the tax on tax reductions and 2017 jobs (TCJA). Our analysis confirms what many economists and workers have suspected for a long time: the profits and supercharged companies TCJA have brought the gains directly to their shareholders, while not doing much to benefit the wider economy.
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The data tells an austere story. After the TCJA reduced the corporate tax rate by 35% to 21%, companies’ profits have exploded. But rather than using these gains to hire more workers or increase wages, companies have channeled most of their manna in share buybacks and dividend payments that line the pockets of their rich shareholders and increase their reports on profits. Between 2018 and 2022, S&P 500 companies alone spent more than $ 6.4 billions in redemptions and dividends, overshadowing investments in work, infrastructure or research.
Take PEPSICO. Despite consistent public messages on the increase in production costs forcing price increases, the company has expanded its net profit, declaring a 19% growth in the profits between 2021 and 2023. To do this, the company increased prices in two -digit percentages for eight consecutive quarters, including costs, then some – to say to consumers and the dismissal of the hundreds of workers. Meanwhile, he channeled $ 21 billion in the pockets of his rich investors.
Comcast followed a similar script. He paid more than $ 43 billion in shareholders between 2021 and 2023, even if he has repeatedly increased high speed and cable prices. During this same period, the company reduced 3,000 jobs. These decisions have enriched shareholders but have rendered the services more expensive and more precarious jobs for workers’ families.
Unitedhealth, on the other hand, increased its profits by 12% to more than $ 22 billion in 2023 and rewarded shareholders with nearly $ 15 billion in buyouts and dividends. Rather than reducing costs for patients, United Health has invested in AI -powered technology that saves money to the company by increasing coverage by 800%.
These are not isolated incidents. In all areas, companies choose to make their rich wealthy instead of strengthening productivity capacity, training workers or developing new technologies. These tactics increase the equity prices and the remuneration of managers, but they do nothing to approach the constraints of the supply chain or invest in the type of innovation that maintains long -term costs.
This behavior is not only disappointing; It is economically destructive. When companies choose to enrich shareholders instead of investing in their people and their products, they suffocate long -term growth and deepen economic inequalities. Action buybacks can be celebrated at Wall Street, but they do nothing to improve productivity, increase capacity or support workers who make the success of the company possible in the first place.
Congress could take measures to dissuade this type of business negligence. The law on inflation reduction imposed a new 1% tax on share buybacks; The increase of this would discourage companies from channeling profits to their rich shareholders and reward companies that invest in people and productivity, not only payments.
Instead, republican legislators are pushing to double the failed promises of TCJA. It would be a historical error. We have already seen what is happening when companies receive massive tax relief without any attached chain – they exploit it. The extension of Trump’s tax reductions would not encourage the status quo: inflated prices, stagnant wages, empty public services and downward gains for ultra-rich.
US companies have had almost a decade to prove that a lower taxes leads to shared prosperity. The evidence is in progress, and it is clear: they did not maintain their end of negotiation. It is time for a tax code that places workers’ families first and guarantees that the most profitable companies pay their fair share.
