Chuck and Bernie appeared today in a skit reminiscent of everyone’s favorite grumpy Muppets Statler and Waldorf. And they were just as grumpy while simultaneously being completely off base. I listened to is so you don’t have to. But you can get the gist from Bernie’s tweet:
In addition to Democrats wanting to raise corporate taxes on corporations generally, Sanders and Schumer are looking to handicap them even further. They are suggesting requirements, like backdooring a $15.00 minimum wage, as a condition before corporations can buy their own stock back. Because stockholders are all filthy rich. At least according to Chuck and Bernie.
Where to begin. First of all, the basis for their argument is misleading. They make the statement that 84% of the wealth in the stock market belongs to “the top 10%”. Well, okay. But that summary statistic contained in a headline leaves out a few important details.
Also, “the top 10%” is defined by net worth. That includes all the assets of a household to include real estate and other physical assets as well as investments. The breakpoint for 2016 was $1,182,390.36. In 2016 it was estimated there were 14,814,453 millionaires in the US who occupied 11.4% of households. This wealth is also concentrated in people 55 and older, which makes sense.
The same economist who developed that statistic in 2016, also noted that 50% of households are invested in the market through mutual funds and individual purchases. When you look at the detail from the same period, the statistic becomes even more unnerving.
In 2016, Business Insider reported a more detailed assessment from the Tax Policy Institute.:
It’s easy to think that the stock market is the playground of hedge funds and day traders, but in reality most of the stock market is owned by the average joe.
In fact, the largest chunk is doing one thing: helping people retire.
In a white paper, Steven Rosenthal and Lydia Austin of the Tax Policy Center have broken out exactly which kind of investors own the stock market. They found that a majority of corporate stock is owned by different types of retirement plans, the largest being IRAs and defined-benefit plans.
“Here’s who actually owns the stock market”, Bob Bryan, Business Insider, May 25, 2016
Taxable stock ownership has declined sharply, but nearly all of that volume has been transitioned into retirement plans which make up 37% of the market. The biggest shift in stock ownership has actually been in foreign investment. But the largest single share is in qualified retirement plans and pensions.
So, if corporations are punished for buybacks or discouraged from making them, far more than 10% of the population will suffer. Buybacks do two things. They raise the stock price which benefits the 50% of households that are invested. They also provide cash for investment in business growth which benefits the economy. Maybe Bernie missed Finance 101 when he was shirtless and singing with a bunch of commies in Russia.
Sanders also seems to have a real beef with Walmart and the Walton family. The family is quite wealthy because starting with Sam, it revolutionized the retail business. It has made more products available to more people at a better price that any retailer in history.
The addled Senator also did no research on his corporate nemesis before making this video. In it, he accuses Walmart of neglecting its employees and not investing in communities.
I spent about 15 minutes on their website and here is what I found they offer employees:
Extensive health benefits packages to full and part-time employees starting at $26 per pay period.
A Centers of Excellence program that offers costly surgeries, like joint replacements and organ transplants at no cost to the employee.
A 10% employee discount on fresh food and general merchandise
Employee discounts on cell phone, travel, and other services not sold in the store
Paid time off that the employee may use for illness, vacation or other purposes
10 weeks of job-protected paid maternity leave
A 401K match up to 6% of salary after one year of service
Company paid life insurance
The company paid $2.7 billion in higher wages in 2018 that included raising the entry-level wage from $9/hr to $11/hr
250,0000 employees have gone through Walmart Academy, their internal training program
160,000 employees received promotions last year
Walmart offers scholarships for employees and their dependents to pay for higher education
Gosh, they sound just awful, right? But Sanders and Schumer demand these companies do more for the communities they operate in. Greedy monsters.