{"id":71,"date":"2018-01-03T08:59:55","date_gmt":"2018-01-03T08:59:55","guid":{"rendered":"https:\/\/cryptorepublic.app\/?p=71"},"modified":"2018-01-03T08:59:55","modified_gmt":"2018-01-03T08:59:55","slug":"stock-buybacks-hurt-workers-and-the-economy","status":"publish","type":"post","link":"https:\/\/cryptorepublic.app\/?p=71","title":{"rendered":"Stock Buybacks Hurt Workers and the Economy"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][tm_heading tag=\u00bbh5&#8243; custom_google_font=\u00bb\u00bb font_weight=\u00bb600&#8243; text=\u00bbWorkers, innovation, and productivity all suffer when corporations spend their new U.S. tax breaks on stock buybacks.\u00bb line_height=\u00bb1.4&#8243;][tm_spacer size=\u00bblg:25&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbThe deceptively named Tax Cut and Jobs Act slashes the corporate tax rate from 35 percent to 21 percent on the theory that companies will use the extra after-tax profits to make productive investments that will create jobs for Americans. \u00ab][tm_spacer size=\u00bblg:63&#8243;][vc_row_inner][vc_column_inner width=\u00bb3\/12&#8243;][tm_image image=\u00bb875&#8243;][tm_spacer size=\u00bbsm:30&#8243;][\/vc_column_inner][vc_column_inner width=\u00bb9\/12&#8243;][tm_heading tag=\u00bbh5&#8243; custom_google_font=\u00bb\u00bb font_weight=\u00bb600&#8243; text=\u00bbUse psychological pricing methods.\u00bb line_height=\u00bb1.4&#8243;][tm_spacer size=\u00bblg:23&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbYet it is clear that instead of helping to rebuild the vanishing middle class, corporate executives will funnel the tax savings to already-rich shareholders through stock buybacks and cash dividends, increasing their take from the stock market. As a result, the nation\u2019s rampantly unequal income distribution will only become worse.\u00bb][tm_spacer size=\u00bbxs:30;lg:35&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbWhen only a very few CEOs tentatively raised their hands, Cohn asked, \u201cWhy aren\u2019t the other hands up?\u201d Subsequent interviews made clear that, among the CEOs, it was already a foregone conclusion that the tax breaks would end up as buybacks and dividends.\u00bb][\/vc_column_inner][\/vc_row_inner][tm_spacer size=\u00bbxs:30;lg:52&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbFor the Republican corporate tax cut to result in job creation, Congress must follow it up with legislation to rein in these distributions to shareholders. There is a straightforward and practical way to accomplish this objective: Congress should ban corporations from doing stock buybacks, more formally known as open-market stock repurchases.\u00bb][tm_spacer size=\u00bbxs:30;lg:68&#8243;][vc_row_inner][vc_column_inner offset=\u00bbvc_col-md-6&#8243;][tm_heading tag=\u00bbh5&#8243; custom_google_font=\u00bb\u00bb font_weight=\u00bb600&#8243; text=\u00bbDemonstrate the differences\u00bb line_height=\u00bb1.4&#8243;][tm_spacer size=\u00bblg:23&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbFirst, the stock-based compensation of senior executives incentivizes them to do distributions to shareholders. Annual mean remuneration of CEOs of the same 475 companies listed on the S&amp;P 500 from 2007 through 2016 ranged from $9.4 million in 2009, when the stock market was in the dumps, to $20.1 million in 2015, when the stock market was booming.\u00bb][tm_spacer size=\u00bbsm:30;lg:68&#8243;][tm_heading tag=\u00bbh5&#8243; custom_google_font=\u00bb\u00bb font_weight=\u00bb600&#8243; text=\u00bbOffer a money-back guarantee\u00bb line_height=\u00bb1.4&#8243;][tm_spacer size=\u00bblg:23&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbSecond, for more than three decades, executives of major U.S. corporations have preached, conveniently masking their self-interest, that the paramount responsibility of their companies is to \u201ccreate value\u201d for shareholders. Most recently, from 2007 through 2016, stock repurchases by 461 companies on listed on the S&amp;P 500 totaled $4 trillion, equal to 54 percent of profits.\u00bb][tm_spacer size=\u00bbsm:30;lg:68&#8243;][tm_heading tag=\u00bbh5&#8243; custom_google_font=\u00bb\u00bb font_weight=\u00bb600&#8243; text=\u00bbTest your offer and price, and be creative.\u00bb line_height=\u00bb1.4&#8243;][tm_spacer size=\u00bblg:23&#8243;][tm_heading tag=\u00bbdiv\u00bb custom_google_font=\u00bb\u00bb text=\u00bbIn addition, these companies declared $2.9 trillion in dividends, which were 39 percent of profits. Indeed, top corporate executives are often willing to incur debt, lay off employees, cut wages, sell assets, and eat into cash reserves to \u201cmaximize shareholder value.\u201d\u00bb][\/vc_column_inner][vc_column_inner offset=\u00bbvc_col-md-6&#8243;][tm_spacer size=\u00bbsm:40&#8243;][tm_image full_wide=\u00bb1&#8243; image=\u00bb876&#8243;][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Workers, innovation, and productivity all suffer when corporations spend their new U.S. tax breaks on stock buybacks.<\/p>\n","protected":false},"author":1,"featured_media":38,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[26,28],"class_list":["post-71","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","tag-classic","tag-industry"],"views":628,"_links":{"self":[{"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=\/wp\/v2\/posts\/71","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=71"}],"version-history":[{"count":0,"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=\/wp\/v2\/posts\/71\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=\/wp\/v2\/media\/38"}],"wp:attachment":[{"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=71"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=71"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptorepublic.app\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=71"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}