When the GOP passed tax reform in 2017, the party justified its corporate tax cuts with claims that the reductions would boost US employment, wages, and the overall economy. The FCC similarly justified its repeal of net neutrality by arguing that the onerous regulation of wireless and wireline service was hampering innovation, imposing ruinous costs, and generally harming the telcos, ISPs, and cellular service providers in the United States.
Thus far, the corporations Ajit Pai and the Republican Party bent over backward to help haven’t exactly been returning the favor. GM plans to close plants and fire 14,000 people. Verizon has no plan to boost 5G investment, despite Pai’s claim that repealing net neutrality would lead to additional corporate network spending. Now AT&T is reportedly preparing to fire 7,000 people, despite having previously promised that tax breaks and freedom from burdensome regulation would actually create jobs.
What AT&T Said Then
On May 4, 2017, AT&T CEO Randall Stephenson gave an interview to CNBC declaring the importance of cutting taxes. “Lower taxes drives more investment, drives more hiring, drives greater wages,” Stephenson said on CNBC’s Squawk Box. “All of this fits together.”
Other choice quotes include: “If you can have a tax reduction of 35 percent down to, you pick your number, 25 or 20 percent — to think that wouldn’t cause additional investment is nonsensical. I know exactly what AT&T would do: We would invest more.”
Here’s a really good one:
“Every billion dollars in additional investment we make is 7,000 additional jobs we have to put on to put that capital into the ground or on cell towers and so forth,” Stephenson said. “And these are 7,000 jobs wearing hard hats, these are high-paying jobs with good benefits. The correlation is very, very tight. If we have to make that kind of hiring and do that kind of hiring, that drives productivity, which drives what? Wage growth.” (Emphasis added).
AT&T reported a $19B tax windfall in January of 2018, along with an additional $3B in cash that it claimed it would spend on network investments throughout 2018. Capital expenditures in 2017 totaled $21.6B. At the beginning of 2018, AT&T forecast capital expenditures of $25B.