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Published April 10, 2018 in USA Today

That $4,000 Raise Donald Trump and Paul Ryan Promised You was a Trickle-Down Lie

Trump administrations plan for cutting federal compensation

Take it from a rich business guy, we only give out raises when we have to. Don't count on that $4,000 Donald Trump & Paul Ryan promised from tax cuts.

By Nick Hanauer

Free tip from a successful businessman: Always get paid.

In selling you their trickle-down tax plan, President Trump and congressional Republicans promised you a $4,000 pay raise. 

"This change, along with a lower business tax rate, would likely give the typical American household around a $4,000 pay raise," Trump said in October.

“At least $4,000,” House Speaker Paul Ryan emphasized in a post on his official website. 

So now that rich people like me have gotten our billions of dollars in tax cuts, you might be wondering where your $4,000 raise is.

Spoiler alert: You’re not getting one.

Take it from someone who has helped run three dozen companies: Businesses don’t give raises because they can. Businesses give raises when they have to. They give raises when they fear losing employees to a competitor, or when the government requires them to through minimum wage laws. But businesses don’t give raises just because they got a tax cut. Businesses pay you what you can negotiate. And few employees in today’s economy have the leverage to negotiate.

So that $4,000 raise Republicans talked about to sell their tax cuts? It was just a trickle-down lie. For decades, trickle-downers have relentlessly promised that if the government cut taxes on corporations and rich people like me, our windfall profits would eventually trickle down to everyday Americans in the form of higher incomes and more jobs. “A rising tide lifts all boats,” they tell you. But the truth is, these trickle-down policies do nothing but make the rich richer.

Over the past 40 years, corporate profits’ share of the economy has doubled, while wages’ share has fallen by about the same amount. That’s almost a trillion dollars a year that used to go to wages for people like you that now goes to corporate profits — and into the pockets of rich people like me. Even before these tax cuts, rich executives could have easily afforded to pay workers more. They just chose not to.

In fact, on the very same day that Walmart made headlines by doling out $1,000 one-time bonuses to a whopping 7% of its workforce, it used its tax savings to offset the expense of closing 63 Sam’s Club stores, costing nearly 11,000 workers their jobs.

Two weeks later, Kimberly-Clark, the maker of iconic brands such as Kleenex, Scott and Huggies, told investors it would use its tax savings to help pay for a restructuring plan that would close or sell 10 manufacturing facilities, eliminating as many as 5,500 jobs.