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Trump's tax cuts in hand, firms spend more on themselves than on wages

As the tax cuts kick in, companies have laid out a variety of uses for the money

Right now we're going to have an adjustment where you see probably more dividends and share buybacks than wage increases. But going forward we’re going to see a lot of capital formation and wage growth: Kevin Hassett  Head of White House's Council
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Right now we're going to have an adjustment where you see probably more dividends and share buybacks than wage increases. But going forward we’re going to see a lot of capital formation and wage growth: Kevin Hassett Head of White House's Council

Matt Phillips | NYT
President Trump promised his tax cut would encourage companies to invest in factories, workers and wages, setting off a spending spree that would reinvigorate the American economy.
 
Companies have announced plans for some of those investments. But so far, companies are using much of the money for something with a more narrow benefit: buying their own shares. Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.
 
But the purchases can come at the

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First Published: Feb 27 2018 | 10:43 PM IST

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