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

Bank failure resolution and financial risk management: Silicon Valley Bank, Signature Bank, and First Republic Bank.

Dan Rochefort

2023-05-27 11:30:00 Saturday ET

Bank failure resolution and financial risk management: Silicon Valley Bank, Signature Bank, and First Republic Bank.

Bank failure resolution and financial risk management: Silicon Valley Bank, Signature Bank, and First Republic Bank.   What are the main root cau

+See More

Stock Synopsis: Pharmaceutical post-pandemic patent development cycle

John Fourier

2024-05-05 10:31:00 Sunday ET

Stock Synopsis: Pharmaceutical post-pandemic patent development cycle

Stock Synopsis: Pharmaceutical post-pandemic patent development cycle In terms of stock market valuation, the major pharmaceutical sector remains at its

+See More

Warren Buffett points out that many people misunderstand his stock investment method in several ways.

Jonah Whanau

2017-06-21 05:36:00 Wednesday ET

Warren Buffett points out that many people misunderstand his stock investment method in several ways.

In his latest Berkshire Hathaway annual letter to shareholders, Warren Buffett points out that many people misunderstand his stock investment method in seve

+See More

Stock Synopsis: ESG value and momentum stock market portfolio strategies

Fiona Sydney

2024-03-26 09:30:00 Tuesday ET

Stock Synopsis: ESG value and momentum stock market portfolio strategies

Stock Synopsis: ESG value and momentum stock market portfolio strategies Since 2013, we have been delving into the broad topics of ESG (Environmental, So

+See More

A congressional division between Democrats and Republicans can cause ripple effects on Trump economic reforms.

Becky Berkman

2018-11-29 11:33:00 Thursday ET

A congressional division between Democrats and Republicans can cause ripple effects on Trump economic reforms.

A congressional division between Democrats and Republicans can cause ripple effects on Trump economic reforms. As Democrats have successfully flipped the Ho

+See More

U.S. government shuts down again because House Democrats refuse to spend $5 billion on the border wall.

Amy Hamilton

2019-01-19 12:38:00 Saturday ET

U.S. government shuts down again because House Democrats refuse to spend $5 billion on the border wall.

U.S. government shuts down again because House Democrats refuse to spend $5 billion on the border wall that would give President Trump great victory on his

+See More