At Congressional hearing on corporate tax cuts, CWA calls for AT&T accountability

CWA President Chris Shelton testified in front of the House Ways and Means Committee on Wednesday about the impact of the Tax Cut and Jobs Act on working Americans. He called on Congress to hold big corporations accountable for their failed promises to raise wages and create jobs with their tax windfalls.

Shelton cited workers' experience at AT&T, where the company's CEO said the tax bill, if passed into law, would lead to the creation of at least 7,000 new jobs, as a case study of the failure of the bill.

"Are the tax cuts delivering robust job creation? At AT&T, the answer is an emphatic no," Shelton told the committee. "Instead of the 7,000 new jobs AT&T's Randall Stephenson promised if the bill passed, AT&T has actually eliminated over 12,000 jobs."

The telecom giant received a $21 billion windfall from the Tax Cut and Jobs Act and is projecting $3 billion in annual tax savings going forward. AT&T's recent annual report shows the company boosted executive pay and suggests that after refunds, it paid no cash income taxes in 2018 and slashed capital investments by $1.4 billion.

Shelton also noted that AT&T has closed seven US call centers in the past four months while operating two call centers in Mexico that employ nearly 2,500 people and continue to grow. As the Wall Street Journal reported today, instead of encouraging companies to bring jobs back to the US, the changes to the tax rules in the Tax Cut and Jobs Act provided incentives for multinational corporations to send more jobs offshore.

Shelton called on Congress to probe AT&T on how it is spending its tax cut money: "You may ask 'what is AT&T doing with this money if it's not being used to create jobs and invest in the US?' We'd like to know as well."

Shelton pointed out that AT&T is not the only employer that has not shared the benefits of its tax windfall and cited General Motors, American Airlines and Wells Fargo as other corporations benefiting from tax cuts while under-investing in employees. He urged Congress to reform the US tax code to ensure all corporations pay their fair share and working people feel the benefits.

Shelton brought hundreds of hand-written letters from constituents of Committee members to the hearing, and closed his testimony by reading from a letter written by an AT&T worker in Wisconsin, whose call center was recently shut down. "AT&T will not commit to growing and creating jobs," the worker wrote. "What are they doing instead? You need to...demand a Congressional hearing to make CEO Randall Stephenson answer to this."

Other witnesses at the hearing included:

• Elise Gould, Ph.D., Senior Economist, Economic Policy Institute

• Jason Oh, Professor of Law, University of California Los Angeles School of Law

• Nancy Abramowitz, Professor of Law and Director of the Janet R. Spragens Federal Tax Clinic, American University Washington College of Law

A new analysis by CWA of AT&T's 2018 SEC filings shows that AT&T's worldwide cash income tax payments in 2018 were less than zero. AT&T says after refunds, it enjoyed a net tax rebate of $354 million in 2018. The report, however, does not provide adequate detail to fully understand AT&T's tax expenditures and prompts questions about whether AT&T paid any federal income taxes at all last year. CWA is calling on AT&T to provide a detailed disclosure of its tax liabilities, expenditures, and refunds over the past three years to give Congress and the public better insight into the true impact of the Tax Cut and Jobs Act.

AT&T also disclosed that its capital investments fell by $1.4 billion excluding federal government reimbursements for the construction of the FirstNet wireless network. If federal dollars are included, capital expenditures still fell by $300 million. This decline comes after AT&T promised a $1 billion increase in investments if the Tax Cuts and Jobs Act were passed.

After AT&T and CEO Randall Stephenson lobbied ahead of the tax bill saying it would create more middle-class jobs and raise wages, the telecom giant's own numbers show it eliminated nearly 12,000 jobs since the tax cuts took effect. The company recently announced the closure of call centers in Indianapolis, Ind., Kalamazoo, Mich., Appleton, Wis., Syracuse, N.Y, and Meriden, Conn. Earlier this month AT&T announced a major restructuring in its WarnerMedia unit which is expected to result in significant layoffs. AT&T's response to concerns about layoffs with boasts about hiring have been met with skepticism, since hiring to address turnover is not the same as job creation.

CWA has been leading the charge to hold AT&T and other corporations accountable to their tax bill promises by publicly challenging them to reveal their spending plans for the tax windfall. CWA and other major unions filed information requests at over five companies and took action against companies like AT&T over its broken tax bill promises.

Links:

At Congressional hearing on corporate tax cuts, CWA calls for AT&T Accountability (CWA, Mar. 27, 2019)