Once again, for the people in the back…

GOP Tax Law
At today’s Financial Services Committee hearing, we’re seeing Republicans argue once again that stock buybacks benefit everyone. Here’s your friendly reminder that is not the case—stock buybacks and dividends enrich investors, while leaving the middle class behind.

From USA Today:
“…Buybacks don't have much direct impact on the economy. This is especially troubling in that Congress estimated that the tax bill would increase deficits by only $1.5 trillion over 10 years, because economic growth would generate $458 billion in new tax revenues. That growth won’t happen if much of the windfall goes into a form of financial engineering that does not do much to increase wages, hire workers or build facilities.”  

From CNN Money:
“Buybacks have exploded in 2018 thanks to windfall from the Republican tax law. American companies including Wells Fargo (WFC) and Cisco (CSCO) have showered Wall Street with $214 billion of stock buyback announcements so far this year, according to research firm TrimTabs.”

“‘Buybacks have a negative impact on inequality and on the economy,’ former Labor Secretary Robert Reich told CNNMoney.”

Buybacks are ‘smoke and mirrors,’ Yale professor Robert Shiller told CNNMoney.”

“More than 40% of total EPS growth between 2009 and mid-2017 is from share repurchases, according to estimates by Christopher Cole, who runs a hedge fund called Artemis Capital Management.”

“‘Buybacks are not resulting in jobs or new factories. They are not benefiting the middle class,’ said Cole.”

“But the rich benefit more than the rest of the country. That's because the top 10% of households owned 84% of all stocks in 2016, according to NYU professor Edward Wolff.”
“NYU professor Edward Wolff. ‘The gains go disproportionately to the top,’ Wolff said in an interview. Stock buybacks ‘will just exacerbate existing wealth inequality,’ he said.”