S&P 500 Buybacks Now Outpace All R&D Spending in the US
thesoundingline.com
S&P 500 Buybacks Now Outpace All R&D Spending in the US
1–10 of 402 posts
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#2[deleted]
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#3> drowning out real investment.
The conclusion that buybacks are alternative for real investments is wrong.
The aggregate change between R&D and capex versus buybacks and dividends is not just some arbitrary decision. ROI from R&D and investments is slowing down for various reasons.
Instead of investing more without reason to do so, companies should give profits to owners or pay off excess debt.
There is wrong and right way to use buybacks. When company is not overvalued relative to its earnings, buyback is viable alternative for dividends. Taking debt to do buybacks or pay dividends is insane.
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#4Read an idea in American Affairs in support of taxing buybacks. The logic goes that if all companies have a fiduciary duty to shareholders because the market is the most efficient capital allocator, AND all companies are giving their cash back to shareholders, THEN it must be true that the market can not figure out how to efficiently allocate this $1T of capital. Thus, the government should have “next dibs” for items on the agenda that it knows need capital, namely infrastructure and healthcare.
Thought that was an interesting take.
Edit: here is the link but it may be behind a paywall. https://americanaffairsjournal.org/2018/12/share-buybacks-an...
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#5> drowning out real investment. The conclusion that buybacks are alternative for real investments is wrong. The aggregate change between R&D and capex versus buybacks and dividends is not just some arbitrary decision. ROI from R&D and investments is slowing down for various reasons. Instead of investing more without reason to do so, companies should give profits to owners or pay off excess debt. There is wrong and ri…
Corporate debt-to-GDP has never been higher
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#6Read an idea in American Affairs in support of taxing buybacks. The logic goes that if all companies have a fiduciary duty to shareholders because the market is the most efficient capital allocator, AND all companies are giving their cash back to shareholders, THEN it must be true that the market can not figure out how to efficiently allocate this $1T of capital. Thus, the government should have “next dibs” for items…
At the very minimum it should be taxed the same as dividends. Essentially tax buybacks are a tax loophole for giving money back to the shareholder.
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#7> drowning out real investment. The conclusion that buybacks are alternative for real investments is wrong. The aggregate change between R&D and capex versus buybacks and dividends is not just some arbitrary decision. ROI from R&D and investments is slowing down for various reasons. Instead of investing more without reason to do so, companies should give profits to owners or pay off excess debt. There is wrong and ri…
Corporate debt-to-GDP has never been higher
I'm aware.
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#8Read an idea in American Affairs in support of taxing buybacks. The logic goes that if all companies have a fiduciary duty to shareholders because the market is the most efficient capital allocator, AND all companies are giving their cash back to shareholders, THEN it must be true that the market can not figure out how to efficiently allocate this $1T of capital. Thus, the government should have “next dibs” for items…
The government already gets first dibs through corporate income taxes. Buybacks aren't deductible from that.
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#9Read an idea in American Affairs in support of taxing buybacks. The logic goes that if all companies have a fiduciary duty to shareholders because the market is the most efficient capital allocator, AND all companies are giving their cash back to shareholders, THEN it must be true that the market can not figure out how to efficiently allocate this $1T of capital. Thus, the government should have “next dibs” for items…
At the very minimum it should be taxed the same as dividends. Essentially tax buybacks are a tax loophole for giving money back to the shareholder.
What would this look like from a practical standpoint, though? Dividends are a taxable event because you're giving someone money. In a buyback, the value of the stock simply goes up, which isn't a taxable event. How do you determine the cost basis on something like that? If there's a stock buyback over the course of 6 months, how do you determine which proportion of the price increase is due to the buyback, as opposed to inflation or normal growth?
Re: S&P 500 Buybacks Now Outpace All R&D Spending in the US
#10Read an idea in American Affairs in support of taxing buybacks. The logic goes that if all companies have a fiduciary duty to shareholders because the market is the most efficient capital allocator, AND all companies are giving their cash back to shareholders, THEN it must be true that the market can not figure out how to efficiently allocate this $1T of capital. Thus, the government should have “next dibs” for items…
At the very minimum it should be taxed the same as dividends. Essentially tax buybacks are a tax loophole for giving money back to the shareholder.
[deleted]