by Summary:
So it seems that a good chunk of the GOP/Trump tax cuts will go to buybacks, and to fuel the bubble in the stock market, according to Robin Wigglesworth in the FT (subscription required). Bad news for those that think that higher earnings lead to higher investment (meaning gross formation of capital). My impression is that if you want tax cuts to be stimulative, you should target consumption, in particular for lower income groups, which tend to spend a higher proportion of their income.
Topics:
Matias Vernengo considers the following as important: bubbles, Buybacks, Tax cuts
This could be interesting, too:
So it seems that a good chunk of the GOP/Trump tax cuts will go to buybacks, and to fuel the bubble in the stock market, according to Robin Wigglesworth in the FT (subscription required). Bad news for those that think that higher earnings lead to higher investment (meaning gross formation of capital). My impression is that if you want tax cuts to be stimulative, you should target consumption, in particular for lower income groups, which tend to spend a higher proportion of their income.
Topics:
Matias Vernengo considers the following as important: bubbles, Buybacks, Tax cuts
This could be interesting, too:
Steve Roth writes Actually Understanding Corporate Share Buybacks
Mike Norman writes Brian Romanchuk — Housing Bubbles And Their Financing
Matias Vernengo writes What About the New Tax Law?
Matias Vernengo writes Alan Blinder on Fiscal Adjustment
