Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages
- 6 years ago
Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages
Cisco said this month that in response to the tax package, it would bring back to the United States
$67 billion of overseas cash, using $25 billion to finance additional share repurchases.
Companies typically decide to make long-term investments in things like new workers
and factories based on whether they will make the company more profitable — not merely because the companies are sitting on a pile of money that they otherwise would have paid in taxes.
But the vast majority of the billions of dollars in planned share purchases will benefit
the richest 10 percent of American households, who own 84 percent of all stocks.
American companies have announced more than $178 billion in planned buybacks — the largest amount
unveiled in a single quarter, according to Birinyi Associates, a market research firm.
President Trump promised that his tax cut would encourage companies to invest in factories, workers
and wages, setting off a spending spree that would reinvigorate the American economy.
Warren E. Buffett said in his annual letter to investors on Saturday
that his company, Berkshire Hathaway, enjoyed a $29 billion gain thanks to the new tax law.
But the purchases can come at the expense of investments in things like hiring, research
and development and building new plants — the sort of investments that directly help the overall economy.
Cisco said this month that in response to the tax package, it would bring back to the United States
$67 billion of overseas cash, using $25 billion to finance additional share repurchases.
Companies typically decide to make long-term investments in things like new workers
and factories based on whether they will make the company more profitable — not merely because the companies are sitting on a pile of money that they otherwise would have paid in taxes.
But the vast majority of the billions of dollars in planned share purchases will benefit
the richest 10 percent of American households, who own 84 percent of all stocks.
American companies have announced more than $178 billion in planned buybacks — the largest amount
unveiled in a single quarter, according to Birinyi Associates, a market research firm.
President Trump promised that his tax cut would encourage companies to invest in factories, workers
and wages, setting off a spending spree that would reinvigorate the American economy.
Warren E. Buffett said in his annual letter to investors on Saturday
that his company, Berkshire Hathaway, enjoyed a $29 billion gain thanks to the new tax law.
But the purchases can come at the expense of investments in things like hiring, research
and development and building new plants — the sort of investments that directly help the overall economy.