Corporate America uses Trump tax cuts and offshore cash stockpiles primarily to fund share repurchases for better stock market valuation.

Jacob Miramar

2019-02-11 09:37:00 Mon ET

Corporate America uses Trump tax cuts and offshore cash stockpiles primarily to fund share repurchases for better stock market valuation. Share repurchases are a ubiquitous payout practice where public corporations buy back their own shares to return excess capital to shareholders. Share buybacks boost stock demand and so artificially inflate EPS concentration.

American public corporations initiate $1 trillion share repurchases in the fiscal year of 2018-2019. In contrast, business investments and job opportunities decelerate as a result. Rather than spending billions on share repurchases, U.S. corporations would help society more by reinvesting in profitable projects, plants, and high-skill human resources etc. For instance, Apple spends more than $30 billion on share repurchases in the fiscal year of 2018-2019. Apple also plans to pay $38 billion in taxes on offshore cash repatriation with 20,000 new jobs and $30 billion domestic capital investments in the next 5 years.

Several economic experts suggest that share repurchases disproportionately help the rich because the top 10% income earners own about 80% of U.S. stocks. This negative feedback loop self-perpetuates and exacerbates both income and wealth inequality as the rich reap rewards on their stock market bets to the detriment of the middle class.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports.

Rose Prince

2018-08-03 07:33:00 Friday ET

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports.

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports. These tariffs encompass chemical prod

+See More

Federal Reserve publishes its inaugural flagship financial stability report.

Peter Prince

2018-12-05 09:38:00 Wednesday ET

Federal Reserve publishes its inaugural flagship financial stability report.

Federal Reserve publishes its inaugural flagship financial stability report. Fed Chair Jerome Powell applauds both low inflation (2%) and low unemployment (

+See More

U.K. prime minister Boris Johnson encounters Brexit defeat during his new premiership.

Chanel Holden

2019-10-15 09:13:00 Tuesday ET

U.K. prime minister Boris Johnson encounters Brexit defeat during his new premiership.

U.K. prime minister Boris Johnson encounters defeat during his new premiership. The first major vote would pave the path of least resistance to passing a no

+See More

President Trump promises a great trade deal with China as Americans mull over mid-term elections.

Laura Hermes

2018-11-13 12:30:00 Tuesday ET

President Trump promises a great trade deal with China as Americans mull over mid-term elections.

President Trump promises a great trade deal with China as Americans mull over mid-term elections. President Trump wants to reach a trade accord with Chinese

+See More

This infographic visualization summarizes the key habits and investment styles of highly successful entrepreneurs.

Chanel Holden

2017-12-19 09:39:00 Tuesday ET

This infographic visualization summarizes the key habits and investment styles of highly successful entrepreneurs.

From Oprah Winfrey​ to Bill Gates​, this infographic visualization summarizes the key habits and investment styles of highly successful entrepreneurs:

+See More

Capital market liberalization and globalization connect global financial markets to allow an ocean of money to flow through them.

Becky Berkman

2018-06-17 10:35:00 Sunday ET

Capital market liberalization and globalization connect global financial markets to allow an ocean of money to flow through them.

In the past decades, capital market liberalization and globalization have combined to connect global financial markets to allow an ocean of money to flow th

+See More