Companies are likely to focus on bolstering their capital in the wake of massive U.S. tax cuts, although making accurate predictions on their effects is impossible, according to Carlyle Group co-founder David Rubenstein, who spoke during a panel at the World Economic Forum in Davos.

"We really don't know what the impacts are going to be, but it appears right now what companies are going to do is provide bigger dividends, they're going to do stock buybacks, make more acquisitions, and I think the amount of cash in the U.S. will probably inflate the economy a bit," Rubenstein told guests at Davos during a panel entitled "The Next Financial Crisis" on Tuesday.

Buybacks happen when firms buy their own shares trading on the stock exchange, reducing the portion of shares in the hands of investors. They offer a way to return cash to shareholders — along with dividends — and usually coincide with a company's stock pushing higher as shares get scarcer.

The billionaire private equity investor and philanthropist emphasized the difficulty of knowing how benefits from the corporate tax windfall would manifest themselves over time.

"What people don't realize is that when we have these tax cuts in the United States, they're based on 10-year projections of what revenues or costs are going be, so we really don't know."

Other multinational executives have echoed similar projections, with Bank of America chief Brian Moynihan telling investors last week that the "largest portion" of tax savings would "flow to the bottom line through dividends and share buybacks." The trend would appear to contradict Republican claims that its tax package, the biggest tax overhaul in three decades, was targeted at strengthening the middle class.