The success of the corporate tax cut should ultimately be judged by corporate investment levels and wage growth, not share buybacks or one‐off bonuses.
Investment is the mechanism through which corporate rate cuts lead to higher productivity and higher compensation, and the Republican plan was explicitly designed to improve the marginal incentive to invest.
Yet announcements made by hundreds of businesses for one‐off bonuses for workers and even share buybacks can still be a direct consequence of the tax cut.
There are two economic mechanisms at work here, which John Cochrane has outlined: “incentives” and “cashflow”. The former is the more important, but the latter is what we are seeing so far.