The media and Democratic Party have pushed the narrative that tax reform under the Tax Cuts and Jobs Act, which led to over 350 businesses and companies announcing employee bonuses, pay raises and enhanced employee benefits, has not benefited working- and middle-class Americans and their families.
Part of that narrative is that stock buyback announcements by some companies only benefit the wealthy 10 percent of Americans, according to a study by a New York University professor.
But, there has been no pushback from the Right on the Democratic Party narrative, until the National Taxpayers Union Foundation published a report on the reality of stock buybacks.
In the report, NTUF said that although stock buybacks do not directly benefit the average American in the form of take-home pay, it does benefit Americans who invest in the stock market.
The report continued and pointed out that 52 percent of Americans owned stock in 2016, per the Federal Reserve Board of Governors, which is close to the number of Americans who paid income taxes (56 percent).
Surveys also show almost 60 percent of working-age Americans have a personal retirement account, and with a strong stock market fueled by tax reform, those accounts would see a monetary gain when dividend payouts are made.
In short, working-age and senior Americans have a significant investment in the stock market. Due to the tax reform law, stock buybacks and dividend payouts will increase in 2018, yielding growth for Americans’ bottom line in the stock market.
One estimate from the group is that a typical portfolio would yield about $3,100 before the tax reform law was passed. After the law was passed, it estimates that this number would increase by $465 to $3,620.80.
Contrary to the media narrative, Americans who invest in the stock market — typically older Americans who will retire soon — will receive gains from the tax reform law.
You can read the report here.