• FaceDeer@kbin.social
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    1 year ago

    Verizon adores simply setting vast swaths of money on fire to please Wall Street’s myopic lust for “growth for growth’s sake” projects

    This is the core problem for basically all publicly-traded companies, and as I understand it it’s rooted in tax law. Capital gains are not taxed as much as income is, so shareholders prefer companies that increase their share value (capital gains) over companies that pay dividends (income). So when a company earns a profit they are incentivized to try using it to grow the company further rather than simply declaring victory and giving it to the shareholders.

    There are good reasons why capital gains aren’t taxed heavily, though, so I’m not sure what the fundamental solution to all this is.