April 15, 2019

Bloomberg: Big Tech’s Big Tax Ruse: Industry Splurges on Buybacks

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Spending on research and development climbed slightly. Capital expenditures rose because Alphabet Inc. and Facebook Inc. almost doubled spending in that category. Apple Inc. and its partners have yet to bring manufacturing back to the U.S., as President Donald Trump had hoped. And there was no surge in tech hiring, according to data compiled by Bloomberg.

“The companies making these hiring promises don’t have any signed agreement with any government on any level,’’ said Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a think tank that has criticized the new law. “They’re just promises. They’re going to be pretty loose and unenforceable, and they want them to be that way.’’

Buying back stock improves a company’s earnings per share and increases the value of the holdings of shareholders, including insiders. But stock repurchases aren’t so great for the economy when compared with other potential uses of that money, including hiring more workers. Read more