healthmyths
Platinum Member
- Sep 19, 2011
- 29,001
- 10,507
By now everyone has heard about AT&T providing $1,000 per each of 200,000 employees and investing $1B in new capital, or Wells Fargo and Fifth Third banks raising pay to $15.00 due to the tax bill but oh my the worst thing that can happen is for these EVIL corporations to yuk..yuk... "buy back their stock"! How evil.
Or is it? Will that hurt 401k investors especially?
Read more: 4 Reasons Why Investors Like Buybacks | Investopedia 4 Reasons Why Investors Like Buybacks
Improved Shareholder Value
Boost in Share Prices
Tax Benefits
Excess Cash
If they don't buyback they have to pay dividends...
And then we have the other side... If corporations don't have to pay as much in Federal taxes they have to pay dividends... which again are taxable revenue to the government.
Why do they have to pay their excess profits back in dividends ?
To discourage this workaround, the IRS assesses the accumulated earnings tax on C-corporations at a rate of 20% (15% for tax years before 2013) of retained earnings deemed to exceed the corporation's ordinary and reasonable business needs.Nov 27, 2016
Rescuing Retained Earnings from the Accumulated Earnings Tax
Rescuing Retained Earnings from the Accumulated Earnings Tax
Or is it? Will that hurt 401k investors especially?
Read more: 4 Reasons Why Investors Like Buybacks | Investopedia 4 Reasons Why Investors Like Buybacks
Improved Shareholder Value
Boost in Share Prices
Tax Benefits
Excess Cash
If they don't buyback they have to pay dividends...
And then we have the other side... If corporations don't have to pay as much in Federal taxes they have to pay dividends... which again are taxable revenue to the government.
Why do they have to pay their excess profits back in dividends ?
To discourage this workaround, the IRS assesses the accumulated earnings tax on C-corporations at a rate of 20% (15% for tax years before 2013) of retained earnings deemed to exceed the corporation's ordinary and reasonable business needs.Nov 27, 2016
Rescuing Retained Earnings from the Accumulated Earnings Tax
Rescuing Retained Earnings from the Accumulated Earnings Tax