The Republican tax law is proving great for corporate executives and major shareholders—translation: rich people—but the evidence keeps coming in that giving corporations a giant tax cut doesn’t translate into jobs or higher wages for regular workers. A few companies have given workers a one-time bonus, but the real money is going to stock buybacks:
Buybacks are a strategy to boost stock prices – by reducing the number of shares outstanding, which artificially increases a company’s earning per share. But they do nothing to improve the economy.
How much money? It could be $1 trillion. This is but a small sample of stock buybacks so far in 2018:
- Apple – $100 billion
- Cisco – $25 billion
- Wells Fargo – $22.6 billion
- Pepsi – $15 billion
- AbbVie – $10 billion
- Amgen – $10 billion
- Google parent Alphabet – $8.6 billion
- Visa – $7.5 billion
- eBay – $6 billion
Don’t forget, the corporate leadership that’s making these buyback decisions will also benefit from them, since many executive compensation packages are tied to stock prices as well as including stocks and stock options.
Republicans claimed the corporate tax cut would benefit workers, though it was always easy to see that for a lie if you just poked at it a little. And now we have the proof of the lie.