cash and give it to shareholders because that s what the shareholders want and give it to them shareholders in the form of buybacks rather than dividends because as marco rubio says, the buybacks are taxed at a much lower rate than the dividends are. that s not fair that why should buybacks be taxed at a lower rate? it doesn t make a huge amount of sense. i m sympathetic to what rubio is doing here. his proposal is likely to sink the minute it comes out because it s hard to effect in practice. but buybacks are a way of getting around the taxes which do exist. that s unfair. it s worth pointing out you can do all of these things. apple has doubled 80s r & d spening. > research and development. hiring people left and right all over the country,able new headquarters, designing new products. sure a lot of work is being done overseas, as well. it s a global corporation. they ve done the biggest buyback in history and they pay a dividend. it s not a black or white yes or
buybacks are such a lightning rod because people rightfully see most of that benefit is accruing to the 10% who own 80% of the stock. m & a, mergers and acquisitions what you often see when a company buys another is when they streamline the business and improve operations they end up laying off. synergy. that s nicer than layoffs. we go after these companies for buybacks say saying it s irresponsible, they re lining their own pockets. as the ceo of a company it is your job as a fishery to do the best thing for your company. president trump, mick mulvaney said we re going to give these tax cuts can even democrats thought the tax rate was too high for corporate america. the government told us it s going to free up companies to give raises and hire more people with tax cuts. the government can t control that. companies are going to do whatever they want to do. they re going to take the
netflix, u.s. steel. they re paying almost or absolutely nothing and i know the three of us aren t. so you want to know the irony? if you hate buybacks then what you really want is amazon. does nos buybacks. the reason they re not going to pay taxes, their profits doubled from 2017 to 2018. we have preferential for stock based compensation. we let them write that off and we let you write off research and development. amazon takes full advantage of that. they re compensating employees with shares. shares have risen tremendously in value and you get a bigger write-off the more that compensation is. do you want a company doing all the things amazon has hired $670,000 people. i don t think anyone would say they are the enemy. the issue. that was that whole fight to get them to pay a $15 minimum.
no noncommunist is going to say amazon has not hired people and spent a lot of money in the economy. does the issue remain what a complicated tax structure we have? as long as corporate america or rich people have their own tax attorneys or tax departments a tax attorney s job is to find loopholes and minimize what a company or a wealthy individual pays. frank rhule is still doing his taxes on his dining room table. while that will paradigm still exists, the average american is never going to be in an even playing field as the rich guy. absolutely. corporations are experts at making sure that taxes are, their profits are held in local tax jurisdictions. they never need to pay tax. if there s a way of minimizing or cutting their taxes by billions can of dollars can, they re going to be able to find it because they have the most expensive tax advice and normal people do not. buybacks and stock based compensation are one very, very common way that corporations
no. i think what we re trying to find is the happy medium between is there really a happy medium? i m not dogging on corporate america. think about carried interest for a minute. all along the campaign trail even while they were working on tax reform, the president railed against private equity firms and carried interest saying this is a ridiculous hookup. either he was lying or member of congress were. the tax cut came through and carried interest still in there. these are hoop loopholes. buybacks is a loophole a way of giving money to shareholders without him having to pay tax on it. there s no good reason for it to exist. average american, half the country doesn t own stocks. they re never going to be in a position to get this hookup. i want to stay on paying taxes. there s tons of headlines. lots of s&p 500 companies who made billions of dollars in the last year and legally they get to pay no taxes, gm, good year,