Taxes

Buybacks And Dividends Are Expected to Blow Past $1 Trillion

Written by SK Ashby

Good news if you're among the richest Americans who actually own a significant amount of stock.

Corporate America's tax cut-fueled buybacks and dividend payments have already approached the $1 trillion mark and are set to blow far past that during what remains of the current fiscal year.

After buybacks among S&P 500 Index members hit a record in the first quarter and more than a third of the index raised dividend payments, corporations have returned $992 billion to shareholders in the past 12 months. At the current rate, 2018 will mark the first year that corporate America showers investors with more than $1 trillion. [...]

According to Gallup poll published last year, nine out of 10 families with annual income higher than $100,000 own stocks, compared with a ratio of 1-in-5 for those earning less than $30,000 a year. While equities have added $22 trillion in value since 2009, wages stagnated and workers’ share of business income remained near record lows.

I don't think it would be a coincidence if buybacks and dividends for the current fiscal year reach $1.5 trillion; the same amount as the GOP's tax cuts. I think that would be obvious.

Corporations have front-loaded everything the GOP handed to them in the event that a future Congress or president takes it away. The music is going to stop at some point and rich shareholders already have a chair reserved.

It should go without saying, but $1 trillion spent on buybacks and dividends is $1 trillion they chose not to invest in new business and workers. Republicans claimed the money would be invested, but that was bullshit of course.