How the 2017 Corporate Tax Cuts Fueled Record Stock Buybacks
…and What the One Big Beautiful Bill Might Repeat
In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA), lowering the corporate tax rate from 35% to 21%. Supporters promised that companies would reinvest this windfall in new equipment, expand operations, and boost worker pay.
But the reality turned out quite differently.
Record-Breaking Stock Buybacks
After the tax cuts took effect, corporate America went on a historic buyback spree. In 2018, companies in the S&P 500 repurchased over $800 billion worth of their own stock — the largest amount ever recorded. In 2019, they spent another $700 billion. Before the tax cuts, annual buybacks usually hovered closer to $500 billion.
Stock buybacks shrink the number of shares on the market, boosting earnings per share and pushing up stock prices. This helps wealthy investors and corporate executives, but does little for everyday workers.
Workers Left Behind
Despite big promises, wage growth remained sluggish. According to Bureau of Labor Statistics data, average hourly earnings grew about 3% per year between 2017 and 2019, barely keeping pace with inflation. Meanwhile, corporate profits soared — and went right back to shareholders.
Shareholders Got Richer, Inequality Widened
America’s richest 10% own roughly 89% of all corporate equities, so most of the gains from buybacks ended up with them. Instead of raising wages or funding new investment, corporations spent their tax savings rewarding their shareholders and executives.
Even Trump Didn’t Expect It
President Trump himself seemed frustrated by how corporations used their windfall. In March 2018, he said:
“We thought they would have known better but they didn’t know better … I am fine with restricting buybacks. In fact, I would demand that there be no stock buybacks. I don’t want them taking hundreds of millions of dollars and buying back their stock because that does nothing.”
Even the president behind the tax cuts recognized that companies had largely used their windfall to enrich themselves.
So Why Do It Again?
Now, some lawmakers are pushing to make these corporate tax cuts permanent through what they call the “One Big Beautiful Bill.” But there is little discussion about putting limits on stock buybacks this time around.
If the goal is to strengthen our economy and help workers, why would we hand corporations another giant tax break with no strings attached? We already saw what happened last time: corporations took the money and rewarded shareholders, while workers saw almost nothing.
If there is one lesson from the 2017 tax cuts, it is that without guardrails, corporate tax giveaways mainly benefit the wealthiest Americans. Any plan to extend these cuts should include strong rules to make sure the money supports job growth, wage increases, and investment — not just stock market gains.
Take Action
If you think tax policy should help workers and communities, not just the richest shareholders, reach out to your members of Congress and tell them:
No permanent corporate tax cuts without protections against stock buybacks. Tax breaks should build the real economy — not just inflate stock prices.