Why It’s OK That the Republican Tax Cuts Will First Finance Share Buybacks

Ryan Bourne

The Republican plan to slash the corporate tax rate permanently
to 20% is a long-term reform that will improve growth prospects and
increase wages across the economy. But it’s crucial that its
advocates do not go wobbly in the face of stories about companies
reacting to the lower tax rate in different ways.

Already, corporate-rate-cut skeptics have pounced on
declarations from Pfizer, Coca-Cola and Cisco Systems, who say they intend to use after-tax gains from
rate cuts to increase dividends to shareholders or buy back more of
their own shares
. Rather than creating jobs or increasing
wages, critics say, this shows it will be wealthy shareholders …read more