Trump Tax Breaks Lead Corporations To Fill Own Pockets

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The Republican tax reform package that was supposed to raise wages and spur hiring has instead funded a record stock buyback and dividend spree, benefiting investors and company executives over workers.

President Donald Trump signed the bill in December last year, saying the corporate tax cut would make it favorable for companies to bring back into the U.S. cash stashed in foreign operations.

“More than 70 percent of this [tax cut] will be returned to workers,” said White House Press Secretary Sarah Huckabee Sanders at a January press conference after the bill came into effect.

However, companies have instead used the extra cash to spend billions of dollars buying back their own stock, boosting the value of shares held by investors. Buybacks reduce the number of shares on the market, immediately increasing the value of the shares that investors already hold.

Over the past year, S&P 500 companies have given their shareholders a record $1 trillion in the form of buybacks and dividends, led by Apple, Cisco Systems, and other technology giants.

Stock repurchases hit nearly $190 billion in the first quarter for the S&P 500, according to preliminary results from S&P Dow Jones Indices. The last time that record was set was just before the Great Recession, when companies bought up almost $172 billion of buybacks.

 

read more at nbcnews.com

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About Chuck Berry

Chuck comes from a lineage of journalism. He has written for some of the webs most popular news sites. He enjoys spending time outdoors, bull riding, and collecting old vinyl records. Roll Tide!