Friday, August 05, 2022 1:00:25 PM
Friday, August 5, 2022 11:48 am
U.S. Senate Democrats’ so-called “The Inflation Reduction Act,” about which there’s low confidence that the legislation will have any positive impact on the rate inflation (currently at a 40-plus-year high of 9.1%), according to the nonpartisan Penn Wharton Budget Model (PWBM), also contains a proposed 1% levy on corporations’ share repurchases will force chief financial officers to think twice about how they use their cash.
In April, Apple’s board of directors authorized an increase of $90 billion to the company’s existing buyback program.
The bill also proposes that corporations with at least $1 billion in annual income will have a new corporate minimum tax rate of 15% which, of course, will not be paid by corporations but instead passed on to consumers in the form of higher prices and/or to employees in the form of lower annual raises and/or reduced corporate profits which could hurt employees’ 401(k) and other investors’ mutual funds.
Kelly Anne Smith for Forbes:
According to the Congressional Budget Office (CBO), a federal agency that provides budget and economic information to Congress, the bill would barely make a dent on inflation in the near term — and could even nudge it upward.
If the bill passes in 2022, the CBO estimates that it would have a “negligible effect on inflation,” and in 2023 it would change inflation somewhere between 0.1 percentage point lower and 0.1 percentage point higher than it is currently.
The CBO also estimates the bill would decrease the deficit by more than $100 billion over the next decade. The federal government ran a deficit of $2.8 trillion in 2021, according to the Bipartisan Policy Center.
For further perspective, the U.S. has already committed $54 billion to Ukraine since the Russian invasion. In 2021 alone, not over a decade, the U.S. federal government spent $100 billion on highway grants ($43 billion) and health insurance premium tax credits ($57 billion).
Joe Woelfel and Rupert Steiner for Barron’s:
It is set to be a record year for U.S. buybacks, with some $1.2 trillion forecast to be spent, including bumper programs under way at Apple and Google owner Alphabet.
When choosing how to reward investors, companies like buybacks compared with dividends because they increase per-share measures of earnings and cash flow and benefit return on equity. They can be directors’ way of trying to put a floor under the share price—although they look wasteful if the stock drops.
For investors, buybacks result in capital gains that may never be taxed at all, whereas dividends require income tax to be paid.
MacDailyNews Take: As with most bills proposed in the U.S. House and Senate over past decades, this one is egregiously misnamed and may actually end up causing the exact opposite of its titled intention.
Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
We’ll find out at the end of next April, when Apple normally updates its annual capital return program, if Apple’s buyback program is affected by passage of the bill.
https://macdailynews.com/2022/08/05/new-u-s-buyback-tax-will-force-companies-to-think-twice-on-how-to-use-cash/
Recent AAPL News
- Visa Faces Monopoly Lawsuit; Meta Introduces Celebrity Voices for Chatbot; Stellantis on the Hunt for New CEO • IH Market News • 09/24/2024 10:15:50 AM
- Nike Shares Surge 7% Pre-Market as Elliott Hill Becomes CEO; FedEx Shares Tumble 13% After Profit Miss • IH Market News • 09/20/2024 10:02:58 AM
- Meta Strengthens Child Privacy on Instagram; Google Overturns $1.7 Billion Antitrust Fine; Snap Updates Spectacles • IH Market News • 09/18/2024 10:13:07 AM
- Microsoft Boosts Share Buyback, Raises Dividends by 10%, Intel Secures Chip Deal with Amazon • IH Market News • 09/17/2024 10:40:35 AM
- OpenAI Unveils Strawberry AI Model Series; Boeing Stock Falls 4% Amid Strike; HR Surges 20% on Growth Forecast • IH Market News • 09/13/2024 10:12:55 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/10/2024 01:06:34 PM
- Apple Loses EU Dispute; Google’s $2.7 Billion Fine Upheld; Oracle Shares Surge 9% • IH Market News • 09/10/2024 10:02:31 AM
- Apple introduces groundbreaking health features to support conditions impacting billions of people • Business Wire • 09/09/2024 06:41:00 PM
- Introducing Apple Watch Series 10 • Business Wire • 09/09/2024 06:36:00 PM
- Apple introduces iPhone 16 and iPhone 16 Plus • Business Wire • 09/09/2024 06:36:00 PM
- Apple introduces AirPods 4 and the world’s first all-in-one hearing health experience with AirPods Pro 2 • Business Wire • 09/09/2024 06:36:00 PM
- Apple Watch Ultra 2 now available in black titanium • Business Wire • 09/09/2024 06:36:00 PM
- Apple debuts iPhone 16 Pro and iPhone 16 Pro Max • Business Wire • 09/09/2024 06:36:00 PM
- Dell, Palantir, and Erie Will Be Added to the S&P 500; Boeing Avoids Strike; Apple Event Takes Place Today • IH Market News • 09/09/2024 10:05:35 AM
- Broadcom Down 10% Post-Earnings, UiPath Up 8%; Qualcomm Eyes Intel Assets; Salesforce Acquires Own Company • IH Market News • 09/06/2024 11:59:00 AM
- Nvidia Subpoenaed by DOJ, Athira Pharma Shares Plunge 71% After Study Fails, Zscaler Falls 15% Post-Earnings • IH Market News • 09/04/2024 09:50:25 AM
- Big Lots Falls 27%, Considers Bankruptcy; DraftKings Acquires Simplebet, Berkshire Hits $1 Trillion • IH Market News • 08/29/2024 10:06:50 AM
- High Volatility Expected in Nvidia Report, Ambarella Soars 20%, Hertz Strengthens Board, Apple Cuts Jobs • IH Market News • 08/28/2024 09:50:36 AM
- Apple Names New CFO, Sony Hikes PS5 Price in Japan, Santander Launches Share Buyback • IH Market News • 08/27/2024 09:35:22 AM
- Stacks Prepares Nakamoto Upgrade, Record Bitcoin ETF Inflows, Semler Scientific Expands Bitcoin Reserves • IH Market News • 08/26/2024 10:35:56 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/26/2024 09:20:33 PM
- Apple announces Chief Financial Officer transition • Business Wire • 08/26/2024 08:30:00 PM
- IBM Closes China Research Division, Uber Fined $324M, Starliner to Return Without Astronauts • IH Market News • 08/26/2024 12:58:21 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/23/2024 08:30:44 PM
- Cruise and Uber Join Forces for Robotaxis, Alibaba Shifts Primary Listing to Hong Kong, Altria Hikes Dividend 4.1% • IH Market News • 08/23/2024 12:20:26 PM
Lingerie Fighting Championships Signs Broadcast Deal With Maybacks Global Entertainment • BOTY • Sep 26, 2024 9:00 AM
Maybacks Global Entertainment and Lingerie Fighting Championships Enter Into Broadcast And Revenue Sharing Agreement • AHRO • Sep 26, 2024 8:30 AM
North Bay Resources Commences Operations at Bishop Gold Mill, Inyo County, California; Engages Sabean Group Management Consulting • NBRI • Sep 25, 2024 9:15 AM
CEO David B. Dorwart Anticipates a Bright Future at Good Gaming Inc. Through His Most Recent Shareholder Update • GMER • Sep 25, 2024 8:30 AM
Cannabix Technologies and Omega Laboratories Inc. Advance Marijuana Breathalyzer Technology - Dr. Bruce Goldberger to Present at Society of Forensic Toxicologists Conference • BLOZF • Sep 24, 2024 8:50 AM
Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • INTV • Sep 24, 2024 8:45 AM