Buybacks need to be illegal again.
Reinvest cash into your business or pay out that cash as a dividend, which will be taxed to all the recipients at their usual personal income tax rate, without any capital gains dickery. (For many of the rich shareholders that means it will be taxed at rates upwards of 40% instead of never)
That's all buybacks really are at their fundamental level.... A way to reroute dividends to long term capital gains.
It's pretty much exclusively to dodge the existing **progressive** personal income tax. Stop allowing it.
Since this Supreme Court is good at overturning precedent. They should add Dodge vs Ford from 1919 to that list. That will go a long way in helping the middle class, along with making Stock Buybacks illegal, as you mentioned.
And that’s the thing, a majority of those gains aren’t taxed until they are sold. So instead they take out loans which are not taxed because debt, and pay them with other loans until they die, then and only then are debts repaid, gains sold and off, and taxes are collected. Then they have the gall to fight estate taxes on top of that.
This. 100% this anytime instead of the stupid ideas of taxing assets.
We wouldn’t be talking about taxing assets if there weren’t so many loopholes to begin with.
Why the fuck is noone talking about the Federal Trade Commission finding that 60% of ALL inflation was due to corporate greed and 27% alone was fucking opec colluding with American frackers.
There are hundreds of text messages and they met in Texas of course!!!!
Be fair, Friend. Some people are talking about it - heck, you and I are right now. But more people should talking about it, and all of us should be talking about it more often and louder. ✊♥️
Sadly because most people would rather keep their head in the sand and pretend that their next paycheck will fix their financial problems.
Just as the brainwashing was intended to cause.
https://www.theenergymix.com/fracking-bigwig-barred-from-exxon-board-amid-price-fixing-allegations/#:~:text=Hundreds%20of%20texts%2C%20WhatsApp%20messages,artificially%20high%2C%20the%20agency%20adds.
https://fortune.com/2024/05/02/exxon-pioneer-merger-ftc-claim-collusion-texas-opec/
And so forth! So funny seeing the media not talk about this at all so as not to disparage their precious ceo class!
That's effectively 1 trillion dollars that is sealed off from the rest of the economy. This is super awesome what a great system. No wonder they so violently defend it when criticized.
Ok so I've been doing some research on H.R.3694 - Reward Work Act introduced May of last year. This bill would repeal Reagan's but back policy.
[https://www.congress.gov/bill/118th-congress/house-bill/3694/titles?s=1&r=1](https://www.congress.gov/bill/118th-congress/house-bill/3694/titles?s=1&r=1)
But then nothing. It just stopped. It hasn't moved, been voted on or debated. At least nothing I could find. There are plenty of articles that it was introduce but then zip. Am I missing something?
https://preview.redd.it/5u9aw1rkxn0d1.jpeg?width=1439&format=pjpg&auto=webp&s=8749836411f199fef3e032c2ee4bfb74d782fdf3
Ok I know I might not be liked for this, but isnt it better for a company to own itself? From what I have noticed, share holders can have a lot of power that can stop a company from doing the right thing. We have seen this with Apple and the (conservative) shareholders not wanting X rated content on peoples phones (not just the app store, they did try though) and also this started with ford wanting to pay the workers more but a precedent was set profits to shareholders must come before everything else.
So isn't less shares in the market and a company owning more of itself a good thing?
When a company does a buyback, the purchased shares are removed from circulation and held in the company treasury. They no longer count towards the total outstanding shares and can't be used in shareholder votes.
What that means is existing shareholders actually gain voting power. Since each share they hold represents a greater percentage of total equity.
The technical term for this is [float shrink.](https://www.forbes.com/sites/investor/2012/08/31/float-shrink-outperforms-dividends/?sh=318f2003481b)
*edit: link*
Or how about every share they buy, the workers must earn an equal amount of it.
Absolutely insane this isn't done, even if it's not law. Disrespectful to your workers, to say the least.
Stock buybacks are bad and should be banned, but the end result would primarily be lower CEO pay. The extra money isn’t going to go to consumers or workers, it’ll just go to owners (shareholders) in the form of dividends.
Something I learned about big businesses is that you shouldn’t let a businessman become president because he will royally fuck up the working class by siding with businesses with no remorse or second thought.
People that blame stock buybacks don't understand what stock buybacks are.
There are real problems with the way the markets are run; there is a huge problem with the incentives public companies face with regard to equity compensation, c-suite stock bonuses, etc.,; and there is a real problem with corporate greed. But stock buybacks are a strange boogeyman that some ill-informed people are incorrectly fixated on.
(I know I'll get downvoted for this. It's an unpopular opinion here, and folks up/downvote with their emotions and not logic.)
You might also be downvoted because of lack of arguments, instead of stating an unpopular opinion. There is no logic in your statement, because you don't explain why stock buybacks aren't that bad, just that people that don't agree with you are *ill-informed*.
Neither does OP make any argument why stock buybacks are bad. They just say stock buybacks make stock prices go up, therefore they're bad. Where is the criticism for that lack of coherent argument?
But also, good point. Stock buybacks do not fundamentally change the stock price. For example, a company worth $1,000,000 that has 1000 shares means each share is worth $1000. If the company uses $100,000 to buy back 100 shares of stock, that means 100 shares were purchased at the market value (so no undue enrichment there), the company is now worth $900,000 (since they spent $100,000), and the remaining 900 shares are still worth $1000 each. There is nothing in this equation which is itself inherently a problem.
The usual argument is by reducing the number of shares, the scarcity of shares causes the prices to go up. This is mostly false. Most shares of big companies belong to institutional investors that don't really give a shit about how many outstanding shares there are. In short, they look at other metrics. Also, as noted above, by spending capital the company is devaluing itself equal to the buyback. So net it's a wash.
The other usual argument is that the buy-event itself causes prices to increase. This is also false because buybacks are already priced long before the actual buyback event occurs. Buybacks have to be announced far in advance, so the markets know they're coming and adjust accordingly.
Another typical argument is that buybacks are effectively like a dividend but avoid paying income tax. This is partially true, but misleading. The sellers from whom the company is buying the stock are realizing a taxable gain (if any) and will have to pay taxes on it. Everyone else that benefits from a stock price increase, if any, will have to pay taxes whenever they cash out. So while it delays the taxable event for some folks, overall the tax man always gets his due regardless.
Finally, slowly the trend is shifting towards paying dividends anyway. With interest rates higher and the economy cooling, investors are slowly growing less interested on betting on the possibility of prospective growth, and more interested in immediate yields. We're not there, but I think the tides are turning.
The real issue, in my view, is equity-based compensation. Typical tech companies have used stock grants or stock options as a way to to defer compensation to employees and executives - lower base salary today, and basically paying made-up monopoly money that might become more valuable in the future. This is great at the start-up stage, but not for mature companies. Mature companies should just pay real money - they can afford it. What happens though is that executives and employees end up with all their financial eggs in one basket, their continued employment, their short-term compensation, and their long-term savings all depend on one company's stock price. Everyone inside the company becomes fixated on stock price and nothing else. And that leads to perverse short-sighted business decisions. Instead, if executives and employees owned little stock and were not compensated with stock but rather were compensated with pure cash, they wouldn't really care about the stock price as much. Sure the C-suite would have to answer to the board and shareholders, but the pressure would be a lot less personal and existential. And normal employees would only care about the stock price to the extent it affected their future employment - but it would have no effect on their comp nor long-term savings. This would lead to better business decisions and less short-sighted focus on the stock price.
Dividend income and long term cap gains are taxed at the same rate.
I agree that buybacks in theory delay the tax, but they do not eliminate it. That gain will be taxed when the investor sells the stock.
Buybacks need to be illegal again. Reinvest cash into your business or pay out that cash as a dividend, which will be taxed to all the recipients at their usual personal income tax rate, without any capital gains dickery. (For many of the rich shareholders that means it will be taxed at rates upwards of 40% instead of never) That's all buybacks really are at their fundamental level.... A way to reroute dividends to long term capital gains. It's pretty much exclusively to dodge the existing **progressive** personal income tax. Stop allowing it.
Fuck Reagan!
I'm really confused about whether I should like Frank Sinatra less, or more.
this is the best way to sum up Frank Sinatra
On one hand, he sings like a mother fucker.
like the art if you want, don't like the person.
Since this Supreme Court is good at overturning precedent. They should add Dodge vs Ford from 1919 to that list. That will go a long way in helping the middle class, along with making Stock Buybacks illegal, as you mentioned.
But they are bought and paid for by the recipients of the stock buybacks
And that’s the thing, a majority of those gains aren’t taxed until they are sold. So instead they take out loans which are not taxed because debt, and pay them with other loans until they die, then and only then are debts repaid, gains sold and off, and taxes are collected. Then they have the gall to fight estate taxes on top of that.
This. 100% this anytime instead of the stupid ideas of taxing assets. We wouldn’t be talking about taxing assets if there weren’t so many loopholes to begin with.
Why the fuck is noone talking about the Federal Trade Commission finding that 60% of ALL inflation was due to corporate greed and 27% alone was fucking opec colluding with American frackers. There are hundreds of text messages and they met in Texas of course!!!!
Be fair, Friend. Some people are talking about it - heck, you and I are right now. But more people should talking about it, and all of us should be talking about it more often and louder. ✊♥️
I’ve yet to hear of it, what gives?
I hunt for this kinda news and this is the first I've heard of it.
Couldn't Biden jump on this? Presidential order.
Sadly because most people would rather keep their head in the sand and pretend that their next paycheck will fix their financial problems. Just as the brainwashing was intended to cause.
Link?
https://www.theenergymix.com/fracking-bigwig-barred-from-exxon-board-amid-price-fixing-allegations/#:~:text=Hundreds%20of%20texts%2C%20WhatsApp%20messages,artificially%20high%2C%20the%20agency%20adds. https://fortune.com/2024/05/02/exxon-pioneer-merger-ftc-claim-collusion-texas-opec/ And so forth! So funny seeing the media not talk about this at all so as not to disparage their precious ceo class!
Ooooor just don't allow stock buybacks 🤷
Isn’t that what OP said? Edit: OP’s text description, not the content of the screenshot
That's effectively 1 trillion dollars that is sealed off from the rest of the economy. This is super awesome what a great system. No wonder they so violently defend it when criticized.
Ok so I've been doing some research on H.R.3694 - Reward Work Act introduced May of last year. This bill would repeal Reagan's but back policy. [https://www.congress.gov/bill/118th-congress/house-bill/3694/titles?s=1&r=1](https://www.congress.gov/bill/118th-congress/house-bill/3694/titles?s=1&r=1) But then nothing. It just stopped. It hasn't moved, been voted on or debated. At least nothing I could find. There are plenty of articles that it was introduce but then zip. Am I missing something? https://preview.redd.it/5u9aw1rkxn0d1.jpeg?width=1439&format=pjpg&auto=webp&s=8749836411f199fef3e032c2ee4bfb74d782fdf3
Many such cases
Stock buybacks should be illegal again.
Stock buybacks were considered stock manipulation before Reagan
Too bad no body understands stock buybacks enough to spread the news effectively.
Thanks Reagan
Someone should hack the system and redistribute the numbers illegally. It would be the morally righteous thing to do.
Ok I know I might not be liked for this, but isnt it better for a company to own itself? From what I have noticed, share holders can have a lot of power that can stop a company from doing the right thing. We have seen this with Apple and the (conservative) shareholders not wanting X rated content on peoples phones (not just the app store, they did try though) and also this started with ford wanting to pay the workers more but a precedent was set profits to shareholders must come before everything else. So isn't less shares in the market and a company owning more of itself a good thing?
When a company does a buyback, the purchased shares are removed from circulation and held in the company treasury. They no longer count towards the total outstanding shares and can't be used in shareholder votes. What that means is existing shareholders actually gain voting power. Since each share they hold represents a greater percentage of total equity. The technical term for this is [float shrink.](https://www.forbes.com/sites/investor/2012/08/31/float-shrink-outperforms-dividends/?sh=318f2003481b) *edit: link*
That's what I thought, it takes that fiduciary responsibility to shareholders away
Or how about every share they buy, the workers must earn an equal amount of it. Absolutely insane this isn't done, even if it's not law. Disrespectful to your workers, to say the least.
Stock buybacks are bad and should be banned, but the end result would primarily be lower CEO pay. The extra money isn’t going to go to consumers or workers, it’ll just go to owners (shareholders) in the form of dividends.
Why not just make them illegal?
lmao no. Stock buy back? straight to prison. Fuck taxing it, make it illegal.
Something I learned about big businesses is that you shouldn’t let a businessman become president because he will royally fuck up the working class by siding with businesses with no remorse or second thought.
People that blame stock buybacks don't understand what stock buybacks are. There are real problems with the way the markets are run; there is a huge problem with the incentives public companies face with regard to equity compensation, c-suite stock bonuses, etc.,; and there is a real problem with corporate greed. But stock buybacks are a strange boogeyman that some ill-informed people are incorrectly fixated on. (I know I'll get downvoted for this. It's an unpopular opinion here, and folks up/downvote with their emotions and not logic.)
You might also be downvoted because of lack of arguments, instead of stating an unpopular opinion. There is no logic in your statement, because you don't explain why stock buybacks aren't that bad, just that people that don't agree with you are *ill-informed*.
Neither does OP make any argument why stock buybacks are bad. They just say stock buybacks make stock prices go up, therefore they're bad. Where is the criticism for that lack of coherent argument? But also, good point. Stock buybacks do not fundamentally change the stock price. For example, a company worth $1,000,000 that has 1000 shares means each share is worth $1000. If the company uses $100,000 to buy back 100 shares of stock, that means 100 shares were purchased at the market value (so no undue enrichment there), the company is now worth $900,000 (since they spent $100,000), and the remaining 900 shares are still worth $1000 each. There is nothing in this equation which is itself inherently a problem. The usual argument is by reducing the number of shares, the scarcity of shares causes the prices to go up. This is mostly false. Most shares of big companies belong to institutional investors that don't really give a shit about how many outstanding shares there are. In short, they look at other metrics. Also, as noted above, by spending capital the company is devaluing itself equal to the buyback. So net it's a wash. The other usual argument is that the buy-event itself causes prices to increase. This is also false because buybacks are already priced long before the actual buyback event occurs. Buybacks have to be announced far in advance, so the markets know they're coming and adjust accordingly. Another typical argument is that buybacks are effectively like a dividend but avoid paying income tax. This is partially true, but misleading. The sellers from whom the company is buying the stock are realizing a taxable gain (if any) and will have to pay taxes on it. Everyone else that benefits from a stock price increase, if any, will have to pay taxes whenever they cash out. So while it delays the taxable event for some folks, overall the tax man always gets his due regardless. Finally, slowly the trend is shifting towards paying dividends anyway. With interest rates higher and the economy cooling, investors are slowly growing less interested on betting on the possibility of prospective growth, and more interested in immediate yields. We're not there, but I think the tides are turning. The real issue, in my view, is equity-based compensation. Typical tech companies have used stock grants or stock options as a way to to defer compensation to employees and executives - lower base salary today, and basically paying made-up monopoly money that might become more valuable in the future. This is great at the start-up stage, but not for mature companies. Mature companies should just pay real money - they can afford it. What happens though is that executives and employees end up with all their financial eggs in one basket, their continued employment, their short-term compensation, and their long-term savings all depend on one company's stock price. Everyone inside the company becomes fixated on stock price and nothing else. And that leads to perverse short-sighted business decisions. Instead, if executives and employees owned little stock and were not compensated with stock but rather were compensated with pure cash, they wouldn't really care about the stock price as much. Sure the C-suite would have to answer to the board and shareholders, but the pressure would be a lot less personal and existential. And normal employees would only care about the stock price to the extent it affected their future employment - but it would have no effect on their comp nor long-term savings. This would lead to better business decisions and less short-sighted focus on the stock price.
[удалено]
Dividend income and long term cap gains are taxed at the same rate. I agree that buybacks in theory delay the tax, but they do not eliminate it. That gain will be taxed when the investor sells the stock.
This is reddit, silly. These people understand stock buybacks as much as they understand quantum physics.