A recent study did confirm that the tax cut did create the surge in investment as well as a massive repatriation of overseas money to invest in the US. The graph below represents the repatriation of earnings since 2003.
Capital investment also surged by more than the tax cuts creating jobs and increasing productivity. Capital investment hit record numbers prior to Covid.
I also think the media has confused you about stock “buy-backs”. They are perhaps one of the best ways to re-direct capital that exists in the private sector. Let’s me use an example. As an investor, I invest in a profitable company making horse equipment. With the corporate tax cuts, the company becomes even more profitable. But it doesn’t need the money, since the market for horse equipment is pretty stable. So, the company decides to “buy-back” stock returning that capital to investors like me. Meanwhile, a new start-up making electric cars needs to build a new plant to produce more electric cars, employ more people, and satisfy expanding demand. As an investor, I generally do not spend money I get from stock buy-backs I look for another stock to buy. So, I buy the stock of the new electric car company. Without the stock buy-back, I would have far less money to invest in electric cars.
Now if the corporate tax savings went only into executive bonuses, I might partially agree with you (though the executives are likely to invest that money just like I did, but still it should go to investors to reinvest).
Where I do agree with you is that there is too much crony capitalism in the US. I do believe in government regulating the excesses of capitalism but not picking industries or even individual companies as “winners”. A horrible example of this was forcing small businesses to close during the Covid lockdown and allowing big box stores to stay open as “essential”. 30% of small business in California closed, many permanently.
One of the worse examples occurs under Medicare and that alone is a good reason not to pass Medicare for all… whether it is drug companies lobbying to prevent drugs from being subject to Medicare pricing or hospitals paying out millions in campaign contributions to protect themselves from competition through CONs, nothing highlights the issues of single payer universal health care in America more than the issue of crony capitalism.
It really does not matter what the Koch Brothers do… if we invest in making green energy cheap enough people will adopt it. But if we subsidize green energy and penalize fossil fuels like we are doing, we are setting ourselves up for permanent subsidies like we have today with corporate farms today. I run my home and cars on solar power, because in southern California the price of solar got down to 14.5 cents per Kwh… the government regulated utilities wanted 28 cents to fund their high-cost infrastructure and pensions. Keep driving down the unsubsidized cost of “green energy” and the planet will be better off… play games with the supply and cost of fossil fuels and you will trigger (as is happening today) an increase in global poverty and suffering.
