The bill comes on the heels of a record year for corporate profits – and for stock buybacks.
With the backing of President Joe Biden, Democrats in the Senate are moving to quadruple the corporate stock buyback tax following a record year for stock buybacks, which topped $1 trillion among S&P 500 companies for the first time in 2022.
On Wednesday, Senators Sherrod Brown (D-Ohio) and Ron Wyden (D-Oregon) introduced a bill that would increase the stock buyback tax from 1 percent, as passed in last year’s Inflation Reduction Act (IRA), to 4 percent.
The lawmakers say that it would help cut down on tax avoidance for corporations and wealthy shareholders after the practice of stock buybacks exploded in popularity due to Republicans’ tax code overhaul in 2017.
Corporations announced stock buyback plans totalling $1.22 trillion in 2022, and companies are on track to beat that record again in 2023.
And ever since the Trump-GOP tax scam gave corporations a huge tax cut, stock buybacks have skyrocketed.
That’s why I propose we quadruple the tax on corporate stock buybacks and encourage long-term investments,” Biden said. »
