Democrats slam Republican tax cut for $97 billion wave in corporate share buybacks
First there was the “Trump bonus.” Now get ready for the “Trump buyback.”
div > div.group > p:first-child”>
Senate Democrats launched a new line of attack on the Republican tax plan Wednesday in a report showing companies have announced $97.2 billion in share buybacks since the start of the year. That figure dwarfs a number that Republicans have been touting: $2.5 billion in bonuses that companies have announced in response to the new tax law.
“This report shows that the first priority of multinational corporations receiving the biggest windfalls from the Republicans’ tax scam was to present … giveaways to their wealthy investors and senior executives,” said Oregon Democratic Sen. Ron Wyden, ranking member of the finance committee. “No amount of flashy headlines will cover up Republicans’ choice to give the middle class less so corporations could get more.”
The analysis was released by Wyden along with Democratic Sens. Bob Casey of Pennsylvania and Sheldon Whitehouse of Rhode Island. It includes some of the biggest names in technology, banking and oil and gas. Embattled Wells Fargo tops the list with $22.6 billion in buybacks announced on Jan. 23.
The report also calls out health insurance company Anthem, which, in a recent earnings call, estimated about a quarter of the benefits of the tax bill would be returned to customers. Another 25 percent would go toward accelerating investments. But half the money would be returned to shareholders.
“As we look at our uses of capital, reinvesting in the business is always something that’s a very, very high on the list and something that we believe we need to continue to do,” Anthem Chief Financial Officer John Gallina said.
The overhaul of America’s tax code will be a central plank in both Republican and Democratic campaigns in this year’s midterm elections. It is the GOP’s signature legislative achievement during the relatively young Trump administration, and Republicans are counting on American workers enjoying bigger paychecks to help the party hold onto its majorities in Congress. Republicans also argue that the new law is encouraging more domestic investment, citing $179.5 billion announced so far.
“Tax cuts are only going to help raise wages and create more good jobs,” House Speaker Paul Ryan said Tuesday.
But Democrats are pushing back by highlighting that the law includes bigger — and permanent — rate reductions for corporations. The tax cuts for individuals expire after 2025.
The buyback list compiled by Democrats also mirrors data from independent money management and research firm Birinyi Associates. It found 61 companies have spent $88.6 billion in share repurchases so far this year, more than double the amount announced by 58 companies during the same period last year.
That makes 2018 the second-busiest year in buybacks since the bull market began in 2009, the firm found.
This article has been updated to reflect updated numbers provided by the Democratic senators.