Rising Buybacks Are Becoming A Political Lightning Rod

Buybacks are expected to rival pre-crisis highs in absolute terms this year and to make up as much as a quarter of corporate cash use, and the practice is drawing political fire. Senators Elizabeth Warren and Tammy Baldwin have each criticized buybacks recently, and as the presidential election heats up it could become a way to talk about high executive pay and income inequality by proxy.

“Some lawmakers have linked share repurchases with stagnant wages and a lack of business investment and have recently begun to call for regulatory changes to constrain repurchase activity. The two most obvious avenues for policy change would be securities rules related to the transactions themselves, or tax changes that increase the relative cost...