• Among the corporations examined, stock buybacks had very nearly doubled (up • If only a small portion of the $4.4 trillion 98%) by the end of the five-year period in shareholder payouts had instead compared to 2017, the year immediately been paid in federal income taxes, tens before implementation of the Trump- of millions of Americans could have GOP tax law. [...] Despite all the promises that the savings from the two-fifths corporate-tax-rate cut–it was chopped from 35% to 21%–would trickle down to workers and consumers, the predictable reality is that the bulk went to shareholders in the form of buybacks. [...] This change in the treatment of dividends is a radical shift in how income is taxed—it was one of the biggest statutory tax rate cuts in history and represented the single largest revenue loser in the 2003 Republican tax package, estimated at the time to lose $126 billion in revenue over 10 years. [...] The average effective annual tax rate of 16.2% tax rate Walmart paid over the first five years of the Trump tax law was little more than half the average rate it paid (30.9%) in the four years before the law. [...] The discounted tax rate on dividends and the capital gains, the tax-free status of unrealized capital gains, the stepped-up basis loophole, and the enfeebled estate tax all ensure that little of the corporate profits wealthy investors enjoy are shared with the larger public.
- Pages
- 25
- Published in
- United States of America
Table of Contents
- Authors 2
- Research 2
- REPORT DESIGN 2
- Editor 2
- THE TWO FORMS OF SHAREHOLDER INCOME........................................................................................................ ......................... 3
- ................................................................................... 3
- .............................. 3
- ................................................. 3
- ........................................................................... 3
- HOW DIVIDENDS CAPITAL GAINS LARGELY ESCAPE TAXATION..................................................................... ................................................... 3
- ......................................................... 3
- ......................................... 3
- THE OTHER SIDE OF THE EQUATION LOW CORPORATE TAXES........................................................................... ........................ 3
- ........................ 3
- CONCLUSIONS SOLUTIONS.................................................................................................................................... 3
- METHODOLOGY........................................................................................................................................................... 3
- 1 2 3
- 4 5 6 8 10 10 3
- 11 11 12 12 3
- 13 14 15 3
- KEY FINDINGS 5
- Corporate Spending on Stock Buybacks Dividends Overwhelmed Corporate Tax Payments After Trump-GOP Tax Law 2018-2022 6
- Stock Buybacks Almost Doubled Between 2017 and 2022 Dividends Grew By Nearly 40 While Wage Growth Lagged 6
- The Two Forms of Shareholder Income 7
- Dividends Being Paid To Own Stock While Getting Taxed Less Than Workers 8
- DIVIDEND DISTRIBUTION BY INCOME LEVEL 9
- How Dividends Have Historically Been Taxed 9
- As Dividend-Tax Rates Have Fallen Corporations Have Diverted More of Their Profits To This Form of Shareholder Enrichment 10
- Corporate Dividends Represent A Greater Share of the Economy Even as Corporate Taxes Make Up A Smaller Share 11
- Capital Gains Winning Stock-Market Bets With a Tax-Discount Chaser 11
- The Share of Corporations Repurchasing Their Own Shares Has Skyrocketed Over the Past 30 Years 12
- A Shareholder Bonanza That Used to Be Market Manipulation 13
- Stock Buybacks By Corporations In ATF Study Exploded After the Trump-GOP Tax Law Came Into Effect in 2018 13
- How Capital Gains Have Historically Been Taxed 13
- How Capital Gains and Dividends Largely Escape Taxation 14
- Stock Owned by Foreign Investors and Retirement Accounts 14
- Unrealized Capital Gains and the Stepped-Up Basis Loophole 15
- When Shareholder Payouts Are Actually Taxed Its At A Discount 15
- The Other Side of the Equation Low Corporate Taxes 16
- 100 large corporations average annual domestic profits soared by almost two- thirds under the trump tax law. 17
- A Measure of How Well Corporations Have Fared Under the Trump Tax Law 17
- What We Could Have Done With A Fair Share of Those Stockholder Payouts 18
- Corporations Who Take A Lot From Us Give A Lot to Their Shareholders and Pay Little In Taxes 19
- Exxon Mobil 22
- JPMorgan Chase 23
- CONCLUSIONS SOLUTIONS 24
