MORE BRILLIANT IDEAS FROM THE GENIUSES IN DC - THEY WANT TO DICTATE THE TERMS OF CORPORATE SHARE REPURCHASES
I wasn’t aware that some federal lawmakers have decided companies should be prohibited from buying back shares until the companies compensate all of their employees at the level that lawmakers deem appropriate. What a great idea! Now, why don’t those geniuses also just dictate what products companies can produce and set prices for which they can sell those products? At least one of them seems to think that these would in fact be appropriate exercises of our central government’s authority.
As an aside, the linked item suggests that a Republican senator has “criticized buybacks.” Here’s what that senator actually said:
At present, Wall Street rewards companies for engaging in stock buybacks, temporarily increasing their stock prices at the expense of productive investment. While companies should be free to buy their own stock, there should be no tax advantage for stock buybacks over other forms of capital allocation, as the deferral of capital-gains taxes currently allows.
One can agree with that statement without supporting the idea that the federal government should dictate when a company can repurchase its shares.
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