Survey: Analysts expect 13 percent of business tax-cut savings to go to workers

Survey: Analysts expect 13 percent of business tax-cut savings to go to workers
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A survey released this week shows that analysts expect only 13 percent of companies' savings from the new tax law to go to workers in the form of bonuses, raises and employee benefits.

Morgan Stanley analysts predict that 43 percent of the savings will end up in the hands of investors in the form of stock buybacks and dividends.

The analysts' prediction echoes one of critics' main issues with the GOP tax-cut legislation signed into law by President TrumpDonald John TrumpPentagon update to missile defense doctrine will explore space-base technologies, lasers to counter threats Giuliani: 'I never said there was no collusion' between the Trump campaign and Russia Former congressmen, RNC members appointed to Trump administration roles MORE — that much of the savings for companies will not immediately be passed on to workers.

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According to data released by the White House earlier this month, more than 300 companies have already announced tax law-related bonuses, raises or improved employee benefits to be provided to more than 3.5 million American workers.

Critics argue that this is still a small fraction of the 125.5 million Americans who are employed by a company.

House Minority Leader Nancy PelosiNancy Patricia D'Alesandro PelosiOvernight Health Care: Dem chair plans hearing on Medicare for all | Senate GOP talks drug prices with Trump health chief | PhRMA CEO hopeful Trump reverses course on controversial pricing proposal Centrist efforts to convince Trump to end shutdown falter On The Money: Shutdown Day 26 | Pelosi calls on Trump to delay State of the Union | Cites 'security concerns' | DHS chief says they can handle security | Waters lays out agenda | Senate rejects effort to block Trump on Russia sanctions MORE (D-Calif.) said the tax law bonuses are “crumbs” compared to the bonuses going to companies, a contention that the Trump administration has rejected.

Among specific industries, Morgan Stanley analysts predict that manufacturing companies will only allocate 9 percent of their tax savings for their workers.

Republicans argue that workers will see many benefits as a result of the new tax law, with Trump saying in his State of the Union address last month that American households will see on average a $4,000 increase in their income because of the law.

CNN noted that most economists predict that workers — unlike shareholders — won't immediately see the biggest benefits of the tax law. But in the long run, they could gain if corporations use savings to invest in their companies, creating more jobs and eventually higher wages.