The claim by many Republicans that cutting taxes on businesses will lead to wage growth is completely absurd. They are using this claim to promote enormous tax cut bills in the House and Senate, which would benefit businesses and the wealthiest people in America more than anyone else.

Companies Pay Employees based on labor market conditions, competition and calculations of what jobs are worth. None of these things have anything to do with the cash a company has on hand or whether its tax rates go up or down.

Companies have enjoyed very favorable tax and borrowing rates for many years, and as the economy has rebounded in the last several years, cash has been piling up on corporate balance sheets. This business prosperity has not caused companies to hire more employees or pay employees more. Low unemployment has increased competition for talent and that has caused wage rates to tick up.