Corporate America Buys Record Amounts of Stock With Tax Breaks
Stocks Corporate America Bought With Tax Cuts
The tax reform package was supposed to be used to raise wages for working Americans, but instead it only benefits the Executives and Investors. Before the signing of the bill President Trump stated that ” The tax cuts will be in favor of U.S companies. Even though wage raises has been by up 2.7 percent, US workers haven’t really seem to feel any changes. The unemployment rate fell below 3.8 percent according to statistical reports. Federal Reserve are conflicted in the numbers of wage growth, but is sure that the numbers will grow within due time for benchmark interest.
Investors and Executives spend billions buying their own stock and raised shares by different companies, doubling the profits that some investors are already holding. Commissioner Rob Jackson stated” I think it’s high time for SEC reexamine it’s outdated buyback rules.” It seems that companies wont invest in productivity to make high profits, because more money is going to lower corporate taxes. Hourly raises has increased by 70 percent since a year ago, but some professionals think that the main focus is to put time and profits into growth industries to employ more U.S. Americans.
Companies show 1 trillion of increased profits for buying back their own stocks. The buyback is a plan for investors and other corporations do to double their stocks. It really does nothing for the economy. There was a big corporation tax rate cut from 35 percent to 21 percent, which was like hitting the lottery for major corporations. Companies like AT&T, Walmart, and Bank Of America stated,”That a one time incentive of one thousand dollars will be awarded to eligible workers” due to the tax cuts.
Political activist Ralph Nader expressed in a letter addressed to Apple’s CEO Tim Cook to invest more profits to the workers instead of short term benefits to executives and investors. Tim cook building a second warehouse and saving the company 38 billion dollars on taxes. Ralph Nader made it clear that it wasn’t fair that the workers that’s employed with apple build these iphones and barely can’t afford to purchase one due to wages. Yet they’re working for a billion dollar company and many think that since these companies have more profits since this buyback policy that it’s only right to put more investments back into the job market. It gives the economy something more secure in the future to look forward to.