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

The global pandemic crisis helps reshape international finance, trade, and technology.

James Campbell

2021-02-01 10:19:00 Monday ET

The global pandemic crisis helps reshape international finance, trade, and technology.

In recent times, the International Monetary Fund (IMF) predicts that the fiscal-debt-to-GDP ratio of most rich economies would rise from 95% in 2018 to 135%

+See More

Fed Chair Jerome Powell increases the neutral interest rate to a range of 1.5% to 1.75% in his debut press conference.

Chanel Holden

2018-03-21 06:32:00 Wednesday ET

Fed Chair Jerome Powell increases the neutral interest rate to a range of 1.5% to 1.75% in his debut press conference.

Fed Chair Jerome Powell increases the neutral interest rate to a range of 1.5% to 1.75% in his debut post-FOMC press conference. The Federal Reserve raises

+See More

Modern themes and insights in behavioral finance (Part 1)

Laura Hermes

2022-02-05 09:26:00 Saturday ET

Modern themes and insights in behavioral finance (Part 1)

Modern themes and insights in behavioral finance   Shiller, R.J. (2003). From efficient markets theory to behavioral finance. Journal of Economi

+See More

The Trump fiscal trifecta of lower income taxation, new infrastructure, and deregulation has yet to run its natural course.

Becky Berkman

2017-04-25 06:35:00 Tuesday ET

The Trump fiscal trifecta of lower income taxation, new infrastructure, and deregulation has yet to run its natural course.

This nice and clear infographic visualization helps us better decipher the main memes and themes of President Donald Trump's first 100 days in office.

+See More

Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends.

Amy Hamilton

2020-02-12 09:31:00 Wednesday ET

Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends.

Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends. David Kirkpatrick (2011) T

+See More

The current AI-driven stock market rally may not be an asset bubble yet.

Laura Hermes

2027-04-30 12:31:00 Friday ET

The current AI-driven stock market rally may not be an asset bubble yet.

In recent years, the current AI-driven stock market rally may or may not turn out to be another major asset bubble in global human history. For the pract

+See More