What do US companies do when they are given more earnings? They buy back their own shares

The tax reform in the United States, with the reduction in tax on corporate earnings and the incentive to repatriate earnings held in the rest of the world, has greatly increased available earnings for US companies. Is this type of economic policy effective? We examine how US companies have used these additional earnings. They may have used them to: Increase investment; Deleverage; Increase acquisitions; Buy back their own shares; Increase dividends; Increase wages and bonuses. We find that the tax reform ’s only visible effect on US companies has been a (sharp) increase in share buybacks.