THIS IS ILLEGAL AND UNCONSTITUTIONAL AND IF WE HAD REAL DEMOCRATS AND REPUBLICANS IN OFFICE---THEY WOULD BE FIGHTING TO REMOVE THESE FED CHIEFS.
People may find tax policy boring----and people not owning stocks and bonds may think none of these policies affect them---but it is the working class and low-wage workers killed as much as middle-class by these policies so it is good to understand public policy. The FED created the conditions yet again for large US corporations to be pushed to bankruptcy with all this corporate stock buy-back debt with the goal being the few largest global corporations will get the assets of these remaining US corporations ----go private----and headquarter overseas to become the foreign corporations coming back to the US under Trans Pacific Trade Pact to operate as FOXCONN global corporations ignoring all US Constitutional law and citizens having rights.
Below you see The Atlantic saying the same thing I shouted 5 years ago----only they are doing it right before the 2016 election. They were silent through the 2010, 2012, 2014 elections while knowing the same thing.
Stock Buybacks Are Killing the American Economy
Profits once flowed to higher wages or increased investment. Now, they enrich a small number of shareholders.
Traders work in a booth on the floor of the New York Stock Exchange on Tuesday, July 3, 2012. Richard Drew/AP
- Nick Hanauer
- Feb 8, 2015
As economic power has shifted from workers to owners over the past 40 years, corporate profit’s take of the U.S. economy has doubled—from an average of 6 percent of GDP during America’s post-war economic heyday to more than 12 percent today. Yet despite this extra $1 trillion a year in corporate profits, job growth remains anemic, wages are flat, and our nation can no longer seem to afford even its most basic needs. A $3.6 trillion budget shortfall has left many roads, bridges, dams, and other public infrastructure in disrepair. Federal spending on economically crucial research and development has plummeted 40 percent, from 1.25 percent of GDP in 1977 to only 0.75 percent today. Adjusted for inflation, public university tuition—once mostly covered by the states—has more than doubled over the past 30 years, burying recent graduates under $1.2 trillion in student debt. Many public schools and our police and fire departments are dangerously underfunded.
Where did all this money go?
The answer is as simple as it is surprising: Much of it went to stock buybacks—more than $6.9 trillion of them since 2004, according to data compiled by Mustafa Erdem Sakinç of The Academic-Industry Research Network. Over the past decade, the companies that make up the S&P 500 have spent an astounding 54 percent of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock.
In the past, this money flowed through the broader economy in the form of higher wages or increased investments in plants and equipment. But today, these buybacks drain trillions of dollars of windfall profits out of the real economy and into a paper-asset bubble, inflating share prices while producing nothing of tangible value. Corporate managers have always felt pressure to grow earnings per share, or EPS, but where once their only option was the hard work of actually growing earnings by selling better products and services, they can now simply manipulate their EPS by reducing the number of shares outstanding.
So what’s changed? Before 1982, when John Shad, a former Wall Street CEO in charge of the Securities and Exchange Commission loosened regulations that define stock manipulation, corporate managers avoided stock buybacks out of fear of prosecution. That rule change, combined with a shift toward stock-based compensation for top executives, has essentially created a gigantic game of financial “keep away,” with CEOs and shareholders tossing a $700-billion ball back and forth over the heads of American workers, whose wages as a share of GDP have fallen in almost exact proportion to profit’s rise.
To be clear: I’ve done stock buybacks too. We all do it. In this era of short-term-focused activist investors, it is nearly impossible to avoid. So at least part of the solution to our current epidemic of business disinvestment must be to discourage this sort of stock manipulation by going back to the pre-1982 rules.
Shareholders aren't providing capital to the corporate sector, they're extracting it.This practice is not only unfair to the American middle class, but is also demonstrably harmful to both individual companies and the American economy as a whole. In a recent white paper titled “The World’s Dumbest Idea,” GMO asset allocation manager James Montier strongly challenges the 40-year obsession with “shareholder value maximization,” or SVM, documenting the many ways that stock buybacks and excessive dividends have reduced business investment and boosted inequality. Almost all investment carried out by firms is financed by retained earnings, Montier points out, so the diversion of cash flow to stock buybacks has inevitably resulted in lower rates of business investment. Defenders of SVM argue that investors efficiently reallocate the profits they reap from repurchased shares by investing the proceeds into more promising enterprises. But Montier shows that since the 1980s, public corporations have actually bought back more equity than they’ve issued, representing a net negative equity flow. Shareholders aren’t providing capital to the corporate sector, they’re extracting it.
Meanwhile, the shift toward stock-based compensation helped drive the rise of the 1 percent by inflating the ratio of CEO-to-worker compensation from twenty-to-one in 1965 to about 300-to-one today. Labor’s steadily falling share of GDP has inevitably depressed consumer demand, resulting in slower economic growth. A new study from the Organization for Economic Co-operation and Development finds that rising inequality knocked six points off U.S. GDP growth between 1990 and 2010 alone.
It is mathematically impossible to make the public- and private-sector investments necessary to sustain America’s global economic competitiveness while flushing away 4 percent of GDP year after year. That is why the federal government must reorient its policies from promoting personal enrichment to promoting national growth. These policies should limit stock buybacks and raise the marginal rate on dividends while providing real incentives to boost investment in R&D, worker training, and business expansion.
If business leaders hope to maintain broad public support for business, they must acknowledge that the purpose of the corporation is not to enrich the few, but to benefit the many. Once America’s CEOs refocus on growing their companies rather than growing their share prices, shareholder value will take care of itself and all Americans will share in the benefits of a renewed era of economic growth.
Obama's IRS has these several years not collected hundreds of billions of dollars in corporate domestic taxes which will stay with these corporations as they are sent to bankruptcy. Not only will these corporations be loaded with stock-buy-back debt---they will be loaded with delinquent corporate tax debt and who will have to pay that debt? THE MAIN STREET SHAREHOLDERS THESE CORPORATIONS MADE OF THEIR EMPLOYEES----POSING AS BENEVOLENT. They are really simply loading their 'former' employees with tons of debt to drive them to poverty as the executives join the few global corporations grabbing all the assets.
'First of all, share buybacks reduce the number of shares outstanding. Once a company purchases its shares, it often cancels them or keeps them as treasury shares and reduces the number of shares outstanding, in the process.
Moreover, buybacks reduce the assets on the balance sheet (remember cash is an asset)'.
Watch out, however, if a company is merely using buybacks to prop up ratios, provide short-term relief to an ailing stock price or to get out from under excessive dilution.
Below you see the Washington Post misleading readers as they knew back then the goal of selling all these stock buybacks and how it would hurt these employees! Remember, these national news media are no longer journalists---they are now corporate state media as in China and Russia.
Companies turning again to stock buybacks to reward shareholders
By Jia Lynn Yang December 15, 2013 Washington Post
Battered by months of disappointing sales, networking giant Cisco needed a way to give its shareholders a pick-me-up. So the San Jose-based firm did what has become routine for many big U.S. companies in a slow-growing economy: It announced last month that it was buying back shares of its stock.
The amount authorized to be spent was $15 billion, surpassing the $10 billion in net income the company earned last year. It’s also 21 / 2 times what Cisco spent on research and development, and it comes as the company lays off 5 percent of its workforce, or 4,000 employees.
This is what U.S. multinationals do now with their cash. Rather than tout big new investments, raise worker wages or hire more employees, companies are more likely to set aside funds to reward shareholders — a trend that took a dip during the recession but has roared back during the recovery.
The 30 companies listed on the Dow Jones industrial average have authorized $211 billion in buybacks in 2013, according to data from Birinyi Associates, helping to lift the benchmark stock index to heights not seen since the tech boom of the late 1990s. By comparison, the amount is nearly three times what the group spent on research and development last year, according to data from S&P Capital IQ.
Why spend so much on stock repurchasing? When the number of shares outstanding falls, the value of each one goes up, instantly rewarding shareholders.
How companies use stock buybacks
The repurchase also lifts earnings per share, an important number closely watched by investors — and by corporate boards in determining executive pay. Of the 30 companies making up the Dow index, all but four list earnings per share in their public documents as a metric used to determine executive pay.
Ultimately, analysts say, when companies spend money on buybacks rather than investment, they’re signaling low hopes for economic growth.
“Corporate profits are very high, but corporations are not expecting a huge burst of growth,” said Ben Inker, co-head of asset allocation at GMO, an investment-management firm. “Given that they’re not expecting a lot of growth, there isn’t a lot of reason to invest. So they’re finding ways of getting money back to shareholders.”
The types of companies that authorize buybacks transcend industry. Among the Dow 30, more than half have approved stock buybacks this year, essentially earmarking money for repurchases that can take place over years. Home Depot authorized $17 billion in February; Goldman Sachs signed off on $10.8 billion in April; Pfizer greenlighted $10 billion in June; and Wal-Mart authorized $15 billion in June.
The announcements often come on top of ongoing share repurchases that outpace spending on research and development. AT&T, for instance, has spent $11.1 billion this year buying back shares, compared with the $1.3 billion it spent last year on research and development. Pfizer has used $11.5 billion to repurchase shares; the pharmaceutical company logged $7.9 billion in research last year.
Cisco spokeswoman Kristin Carvell said the company has not announced a time frame for completing the $15 billion buyback, so evaluating the size of the authorization next to annual net income is “not necessarily a direct comparison.”
She rejected the idea that the company is authorizing buybacks because it doesn’t see investment opportunities. Carvell said Cisco is able to do both — return cash to shareholders and make investments. Carvell also said that the recent layoffs were done not to cut operational costs but rather to allow the company to invest in “key growth areas.”
Cisco announced its buyback authorization the same day it released disappointing quarterly earnings. The bad news outweighed the repurchase declaration and sent the stock down 11 percent.
In the past three decades, the stock buyback has become a standard move in the playbook of corporate America, echoing a growing fixation on maximizing shareholder value.
The rise of share buybacks reflects a belief that a company’s primary purpose is to return value to shareholders, even though that principle is not codified by U.S. statute.
Helping to fuel the stock market’s meteoric rise is the Federal Reserve’s stimulus program designed to lower borrowing costs. Companies are taking advantage, often by borrowing money at low rates to repurchase shares, although it’s unclear how much of the debt is being used to pay for buybacks.
“It somehow feels scarier if they borrowed the money to buy back stock than if they had some investment opportunities,” Inker said. “That somehow seems more sustainable than just levering up to reduce the share count.”
Some analysts say companies are better off repurchasing shares than pouring money into investments promising dubious payoffs, especially in a slow-
growing economy. But others argue that the rise of the share buyback is encouraging executives to make decisions that aren’t always good for their firms or for the economy, rewarding companies for finding quick ways to please shareholders rather than innovating and planning for long-term growth.
“It’s not just the money,” William Lazonick, a professor of economics and director of the Center for Industrial Competitiveness at the University of Massachusetts at Lowell, said of buybacks. “It changes the strategy of the company. It undermines innovation.”
Share buybacks weren’t always a fixture in corporate America. In 1985, only 52 stock repurchases were authorized, according to Birinyi Associates. This year there have been 885.
Buybacks at all companies this year are on track to reach $754 billion, shy of the $863 billion record set in 2007 but far above the 2009 low during the recession.
Lazonick traces the rise of buybacks to a rule passed by the Securities and Exchange Commission in 1982 that gave “safe harbor” to corporations repurchasing large parcels of stock — a way to protect them from charges of price manipulation.
“It’s systemic,” Lazonick said. “One company does it, everybody feels compelled to do it. Otherwise their stock price will lag behind.”
Another factor, experts say, is that executive pay is increasingly tied to movements in the stock market as corporate boards try to tie pay to performance. And often, the compensation itself comes in the form of stock.
The use of restricted stock grants to pay executives hit an all-time high in 2012, according to research firm Equilar, with 93 percent of Standard & Poor’s Composite 1500 companies granting restricted stock to employees, compared with 80 percent in 2007.
But some corporate governance experts question why pay is so closely tied to share prices and metrics such as earnings per share, which executives can so easily alter in the short term.
Roger Martin, former dean of the Rotman School of Management at the University of Toronto, likened stock-based pay to professional football players being allowed to bet on the games they play in: They have too much control over the outcome.
“In football, they have this absolute rule, which is if you’re ever caught betting on football if you’re a player or manager, you get punted out for life,” Martin said. “In the world of business, it’s a different rule.”
As the stock market has surged back to pre-recession levels, executive pay has shot back up as well. Equilar found that chief executives’ compensation is “growing at levels last seen prior to the recession,” according to its 2013 report on CEO pay strategies. Meanwhile, average worker pay has remained stagnant since before the crisis.
And pressure is growing, often from activist investors, for firms to return even more value to shareholders. Carl Icahn, for instance, has been loudly pressing Apple to do a buyback of as much as $150 billion, although he recently scaled back his request.
Companies can take years to complete the process. This year, the companies in the Dow 30 have executed $132 billion worth of buybacks. Lazonick has calculated that over the past decade, companies in the S&P 500-stock index have spent just over half of their net income executing buybacks.
Still, lawmakers have rarely taken notice. In the summer of 2008, when gasoline prices spiked, a handful of Democrats on Capitol Hill, including Sen. Charles E. Schumer (D-N.Y.) and Sen. Robert Menendez (D-N.J.), blasted oil companies for announcing buybacks while customers paid more at the pump.
“What’s shocking is that Big Oil is plowing these profits into stock buybacks instead of increasing production or investing in alternative energy,” Schumer said in a statement at the time.
No substantive policy action on buybacks followed. Yet the way firms deploy their capital — along with what executives are paid — has broad ramifications for the economy.
“Executives get paid for what other companies are doing or what the sentiments of investors are, something that has nothing to do with their business plans,” said Keith Johnson, former legal counsel to Wisconsin’s public pension fund. “It’s just a really bad way to run an economy. It perverts the allocation of capital.”
For firms, repurchasing shares has become something to boast about to shareholders — proof that executives are looking out for them.
“We have a financial priority to return value to our shareholders through dividends and share repurchases,” Jeff Davis, treasurer and executive vice president of Wal-Mart, said on an earnings call with analysts last month. Davis reported that the company spent $1.7 billion on repurchasing shares in the most recent quarter. Of the $15 billion approved by the firm to be spent this way, Davis added, there was still room for billions more.
If you look below at the corporations leading this effort you will see the US corporations that are positioning themselves to this global consolidation and privatized stock ----all of the BRAVO of rising corporate stock prices these several years was not REAL GDP----it was simply all this stock buyback to make these corporations which all expanding overseas---loaded with debt here in the US. Look who these benevolent global corporations are leaving much of this stock buyback to-----they placed it in employee stock plans. Want to guess which corporations are failing to pay their domestic taxes for several years? YOU BETCHA----THESE CORPORATIONS BELOW.
The plan is to implode these US corporations with debt as they expand and reorganize overseas and multi-national corporations all while the US economic falls into the deepest of recessions from this coming economic crash from -----BOND MARKET FRAUD. This will create a great depression/recession with mass unemployment and impoverishment as the Congress jeeps using AUSTERITY to dismantle all New Deal and War on Poverty programs that would protect US citizens. So, in this coming decade you will hear these same Clinton/Obama neo-liberals we leave in office pretending to fight for the American people but pretending all this government debt must be met with huge local, state, and national privatization of all government assets to GUESS WHO? THESE FEW REALLY RICH GLOBAL CORPORATIONS.
THIS IS HOW THE US IS BROUGHT DOWN TO THE SAME DEVELOPED NATION STATUS WITH INTERNATIONAL ECONOMIC ZONES CONTROLLED BY A GLOBAL CORPORATE TRIBUNAL AND COURT---NO MORE US CONSTITUTION OR US NATIONAL SOVEREIGNTY----WE ARE A COLONIAL ENTITY TO THESE NEO-CONS AND NEO-LIBERALS.
Ten Companies Buying Back Huge Amounts of Their Own Stock
By Lee Jackson August 5, 2013 8:30 am EDT 24/7 Wall Street
Companies can return capital to shareholders in many ways. Dividends are one of the favored methods. So is retiring outstanding debt, as it decreases the amount of capital needed for debt service. Another one of the top ways is for a company to buy back its own stock. This has a twofold effect. First, it obviously can be a positive for the stock price, and secondly it also takes some of the float out of the market. Many companies repurchase stock for their employee stocks plans.
We looked through the data from FactSet and other top research firms and found 10 companies buying back more than $1 billion of their own shares. Like insider buying, it makes sense for investors. If the companies want to own their stock, you may want to as well.
CBS Corp. (NYSE: CBS)
kicks off the list with a sizable $6 billion buyback in place. The company is also in the middle of a high-profile fight with Time Warner Cable Inc. (NYSE: TWC) over fees and its programming has been temporarily dropped in the New York, Los Angeles and Dallas. The Thomson/First Call price target for this top entertainment name is $60. Investors are paid a small 0.9% dividend.
Halliburton Co. (NYSE: HAL)
is an oil services name in the process of a $3.3 billion buyback. The company recently pled guilty to destroying evidence in the Gulf of Mexico’s Deepwater Horizon disaster in 2010. The buyback and the settlement may give the stock the momentum it needs. The consensus price target for the stock is at $54, and investors are paid a 1.1% dividend.
Time Warner Cable Inc. (NYSE: TWC)
as mentioned, is in the big fight with CBS. It also just announced a plan to buy back $4 billion more of its stock. Takeout and merger rumors also are swirling around this top stock to buy. The consensus price target is at $120, and shareholders are paid a 2.2% dividend.
Juniper Networks Inc. (NYSE: JNPR)
announced in June a plan to repurchase $1 billion in stock, and it added a $1 billion additional amount when it announced preliminary earnings on July 23. The consensus price for this top tech name is $22.
Maxim Integrated Products Inc. (NASDAQ: MXIM)
is buying back stock and consistently raising its dividend. The company engages in designing, developing, manufacturing and marketing various linear and mixed-signal integrated circuits worldwide. The consensus price objective for the stock is $30, and the company pays a solid 3.7% dividend.
Citigroup Inc. (NYSE: C)
received approval in the late spring for a $1.2 billion repurchase program. The company also posted outstanding second-quarter earnings and appears to be hitting on all cylinders, both in the United States and around the world. The consensus price target for the stock is at $60, and investors get a tiny 0.1% dividend.
Priceline.com Inc. (NASDAQ: PCLN)
has been on fire and seems destined to join the $1,000 stock price club. The company announced in May a $1 billion stock buyback program, and it also had tremendous second-quarter earnings. The consensus target for this top travel name is $945.
Merck & Co. Inc. (NYSE: MRK)
replaced its head of research in April and is betting big on new medicines to treat cancer and Alzheimer’s, though those therapies are still years away from being available to patients. The company also announced a $5 billion buyback of its stock in May. The consensus price target for the drug giant is $52. Investors receive a solid 3.5% dividend.
Apple Inc. (NASDAQ: AAPL) seems to have an exciting array of new products to spring on its legions of followers. From the iPhone 5s or 6, enhancements in Apple TV, to a possible iWatch, Wall Street may be in for a surprise. The company sold $17 billion in bonds in late April to help finance what ultimately may be a total of $60 billion in share buybacks by the end of 2015. The consensus price target for the iconic tech stock is $525, and investors receive a 2.8% dividend.
Wal-Mart Stores Inc. (NYSE: WMT)
announced a $15 billion share repurchase plan at its shareholder meeting back in June. The $15 billion program replaces the current $15 billion share repurchase program begun in 2011. About $712 million is left under that program. The consensus price target for the nation’s largest retailer is $81.50. Investors are paid a 2.4% dividend.
It is important to remember that just because a company is buying back its stock does not mean that it will trade higher. Some major corporations with huge stock floats like Exxon Mobil Corp. (NYSE: XOM) have had multibillion dollar buyback programs for years. Anyway you look at it though, a company that consistently buys back stock has the potential for a solid future.
By Lee Jackson
It was Congress who passed these tax laws that gave tax breaks to shareholders who tied themselves to these employee stock plans and it was Congress that then watched as US global corporations created the conditions for these corporations to do a BAINS CAPITAL on all these main street stock holders and allow the massive corporate debt from stock buybacks and failure to pay corporate domestic taxes. These Obama and Clinton neo-liberals have known since 2010 that the FED and US corporations were planning to kill the American worker yet again. So, look at these employee stock plans tied to your corporations and GET OUT OF THEM. National labor union leaders know these stock plans are meant to harm union workers.
What happens to the working class and low-wage earners not tied to stocks and bonds-----THESE CORPORATE BANKRUPTCIES WILL TAKE DOWN ALL KINDS OF SMALLER BUSINESSES THAT HIRE LOW-WAGE WORKERS AND THEY TOO WILL BECOME UNEMPLOYED.
Meanwhile, in cities like Baltimore slated as an International Economic Zone-----the unemployment of citizens grows and grows as immigrant labor increases until these FOXCONN global corporate campuses are built----ready for the same conditions in Baltimore as they had overseas with citizens impoverished and desperate. THAT IS WHAT WALL STREET'S BALTIMORE DEVELOPMENT, JOHNS HOPKINS, AND THEIR POLS ARE WORKING TOWARD.
Are companies stabbing their employees in the buyback?
By Anora MahmudovaPublished: May 11, 2015 2:42 p.m. ET
S&P 500 companies spent over $2 trillion on buybacks since 2009
Buybacks might be one reason wages haven’t risen more.
Large U.S. corporations spent more than $2 trillion buying back their own shares from 2009 through the end of last year.
That is money that didn't go into the economy in the form of rising wages or investment in innovation or the creation of new jobs. Indeed, stagnant paychecks are one consequence of the rising tide of corporate buybacks, according to William Lazonick, professor of economics at the University of Massachusetts Lowell.
So who has benefited from the trillions in corporate stock buybacks? The stock market and top executives who are paid in company shares, according to Lazonick, who is also the co-director of the UMass Center for Industrial Competitiveness.
Opinion: How the stock market destroyed the middle class
The S&P 500 index SPX, -0.25% has risen more than 200% since the beginning of this bull market in early 2009.
Earnings per share have increased 87%, while revenues per share rose by only 22% over the same period. That is a 17% annualized rate for EPS growth, but 4% annualized growth in revenues.
According to an April 28 Morgan Stanley research note, earnings per share for the S&P 500 have grown by around only 3.3% since 2012, excluding buybacks.
The money pouring in from corporate coffers to scoop up shares has even offset continuous outflows from equity funds during the same period.
In 2014, S&P 500 companies spent a record $940 billion to pay dividends and buy back shares, an amount equivalent to more than 90% of corporate yearly profits, according to FactSet.
Over the years, companies have justified such repurchases by pointing to a dearth of good options to fetch attractive returns. But one hard-to-ignore result is that buybacks have boosted earnings per share, essentially by trimming the companies’ shares outstanding.
Below is a really long article that everyone involved in these retirement stock plans should read. The bad and ugly are at the end of this article. This shows how Congress passed tax laws deliberately to move people into yet another retirement plan all with the goal of blowing it up with policies like this FED buyback scheme.
IF WE KNOW IT IS DELIBERATE-----WILLFUL----AND DONE WITH MALICE WE CAN CALL IT FRAUD AND PUBLIC MALFEASANCE.
This is why it is critical to not fall for the idea that all this globalization has gone too far----IT HAS NOT----we can reverse this easy peasy by simply running in Democratic primaries as social Democrats against Clinton/Obama neo-liberals. THEN WE SIMPLY VOID ALL THIS AND BRING BACK THE FRAUD.
Look when the worst of these laws came into play-----the Clinton Administration. They deliberately sought to move all American retirement into plans they then imploded to leave no wealth for the people. For those not knowing, almost all US corporations are S corporations.
S corporation ESOPMost private US companies operating as an ESOP are structured as S corporation ESOPs (S ESOPs). The United States Congress established S ESOPs in 1998, to encourage and expand retirement savings by giving millions more American workers the opportunity to have equity in the companies where they work.
Institutional Retirement and Trust Wells Fargo
A look at the good, the bad, and the ugly
of an Employee Stock Ownership Plan
Employee Stock Ownership Plans (ESOPs)
are unique among
retirement plans. An ESOP merges the tax benefits of a qualified
retirement plan with corporate finance, and aligns employees’
retirement benefits with corporate goals. This combination of
tax-favored employee and corporate benefits is complex, but with
planning and an expert team of advisors, it can be a win-win
scenario for both employees and employers.
Why have an ESOP?
An ESOP can be the solution to a number of employer concerns.
• provide employees with a stock-based benefit plan;
• provide tax-favored corporate financing;
• provide a means for business perpetuation (e.g., when there is
no buyer for a departing owner);
• provide a market for thinly traded stock;
• provide special tax advantages for shareholders selling stock in
a closely held C corporation;
• make an S corporation non taxable;
• provide liquidity for estates of business owners;
• provide an anti-takeover device by keeping company stock in
“friendly” hands; and
• make dividends deductible at the corporate level.