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Rubio Defends His Opposition to Stock Buybacks
By U.S. Senator Marco Rubio
March 14th, 2019
Wall Street Journal
For an editorial board that regularly invokes President Ronald Reagan, the Gipper’s axiom that “the person who agrees with you 80% of the time is a friend and an ally—not a 20% traitor” no longer seems to hold true. Case in point is your editorial “The Stock Buyback Panic” (March 11) criticizing my efforts to enact pro-growth, pro-worker reforms.
In my report outlining the threat that China’s efforts to dominate the high-value industries of the 21st century poses to the U.S. economy, I propose encouraging more domestic investment through the tax code. My proposal would expand and make permanent full expensing for business investment enacted by the Tax Cuts and Jobs Act, and equalize the tax treatment between share buybacks and dividends. Curiously, you leave out any mention of full expensing in your criticism—despite having endorsed that very policy choice for the same reason that I do: Economic growth depends on investment in the real economy.
Policy makers need to reassess why the U.S. economy has continued to shift investment away from manufacturing, and consider its ultimate effect on American productivity and workers. Your suggestion that I want “politicians to have more leverage to direct how business deploy their capital” ignores that politicians already incentivize business behavior through the tax code, just for uses other than capital expenditure. I believe our policies should unambiguously support capital investment. If that goes against the preferences of business models that rely on unproductive paper arbitrage, then so be it.