Corporations Should Sell Every Stock They Bought Back Before The Get $1 Tax Dollar

[DanieRains]

Trump gave them insane tax cuts, while cutting everything in sight, including the Pandemic Response Team. Corporations then used their "windfalls" to buy their own stocks. Up to 40% of the stocks are owned by foreign investors too.

https://markets.businessinsider.com/news/stocks/stock-buybacks-outlook-estimated-record-amid-warren-sanders-political-criticism-2019-7-1028325693

One TRILLION in stock buybacks.

Now they want free money from tax payers because Trump is a lying moron.

They aren't filthy rich enough, now they need tax dollars to pay for new yachts.

U.S. Corporations have lots of stock to sell to raise money, and seem them through. I think they call it an "offering". Sure it makes the stock price go down, but for all the waitresses, bartenders, hotel clerks, and cleaners, and others out of work, they need the help more than stockholders. Not to mention hospitals, and doctors, nurses, and support staff.

Sorry Wall Street. It's a rainy day, and you didn't save anything. You just paid yourself while the rest of us were being robbed, and paid our taxes like crazy.

Zero bailouts.

Maybe you could give the government (us) stock, and your workers a seat or two on your boards of directors, to get any help, and a limit for 20 years no stock buy backs with profits. A couple more restrictions could be in order too. I will ask Elizabeth Warren which ones are "fair" moving forward.

Business isn't really that hard.

[Brother Mythos]

1. Excellent idea!

[greenjar_01]

2. They buy the stock back to retire it

That way, the earnings per share go up to the big stockholders in the form of higher dividends. There are no stocks to sell again, and who would buy, anyway.

It makes the thievery that much worst. All these shareholders (they're not Mom and Pop, with 80 shares) made massive bank on stock buybacks, with dividends soaring. They cashed that all. Now the companies want money from us, because they didn't save a red cent - too busy dividing up the spoils for more houses, cars, and yachts for the uber-wealthy. That's why United is broke. It's literally the big money analogy of somebody spending all their savings on eating out and fancy sneakers, the thing they most attack the poor for. It's absolutely disgusting, and there should be a mighty reckoning for these people.

[ProfessorGAC]

7. Not Necessarily

While what you say is true in some cases, other companies hold it as treasury stock. Their nonoperating assets now show profitability because they pay the dividends to themselves.
And, they obtain greater control of the stock to fend off potential takeover or shareholder revolt threats.
I'm sure for either scenario, executives convinced themselves that this was good, long range strategy.
Now, they're cash poor because they didn't reserve the tax break in liquid form.
Doesn't look like all that good idea now.
But, with much of big business believing it wise to function at 0.9+ debt to equity ratios, cash is now king.
So, with one major extrinsic event, the "good idea" became the stupidest thing they could have done.

[greenjar_01]

9. Fair

I agree. Good post.

[JHB]

3. Republicans gave them insane tax cuts

Trump propagandized for it and signed it, but it's not as if he wrote it.

Hell, it's not even as if he could read it.

They are all responsible for those giveaways.

[The Magistrate]

4. I Sympathize With The Idea, Ma'am

But suspect throwing large blocks of stock on the market would only serve to drive down prices more quickly, and do great harm to many small-holders.

There is probably no legal method in place at present to do it, but a better idea might be deeding such shares over to the government in exchange for bail-out financing. I believe the Federal Reserve is barred from owning shares, and that the Social Security trusts are similarly restricted, but a law could in theory at least be passed allowing either to do otherwise, and I am not aware of any such restriction on the Treasury itself.

[The Velveteen Ocelot]

5. That stock doesn't exist any more - it's retired. That's what a buy-back does.

Maybe another way to handle the situation would be to tax the value of the buy-backs, and tax the bail-outs as well - or make them loans, with interest.

[DanieRains]

6. Make Offerings Of The Exact Number Of Shared

They didn't share their profits with tax payers. Why should we fund their yachts? They could go bankrupt, and give their companies to their workers with the same names.

Greedy hedge funds wanted buybacks.

Now they get diddly.

[JCMach1]

8. Wrong, they need to give it to the treasury

To secure the loan

[Windy City Charlie]

10. Republicans are unbelievable

The Republicans thinks it's ok for the corporations to get money from the government, but it's not ok to tell them what to do with that money, such as preventing them from buying back their stock.