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Commentary By James R. Copland

Democrats' Anti-Growth Soundbite Bills

Economics, Economics, Governance Finance, Employment, Civil Justice

A recent House subcommittee hearing was the latest example of the anti-growth approach of many national Democrats. The hearing was supposed to be devoted to promoting “investor protection, entrepreneurship and capital markets,” but the goofy ideas being floated were about anything but.

One of the four labor-backed bills under discussion sought to limit the ability of publicly traded corporations to repurchase their own stock. Such “share buybacks” have become a focal point of Democrats in Washington. Publicly traded businesses repurchased a record $770 billion shares in 2018. Because this record followed on the heels of the Republicans’ late-2017 law restructuring corporate taxation, the Democrats smell a populist line of attack.

But what the Democrats characterize as a bug is really a feature. A significant percentage of 2018 share repurchases came from cash “repatriated” from overseas — money that multinational corporations had been parking abroad to avoid previously onerous rates of U.S. corporate taxation.

And when investors sell shares for cash, they typically reallocate the money into other investments. (More than 70 percent of shareholders are institutional investors.)

Continue reading the entire piece here at The Hill

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James R. Copland is a senior fellow and director of legal policy at the Manhattan Institute. Follow him on Twitter here.

This piece originally appeared in The Hill