Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Top Senate Democrats Float 2% Excise Tax on Stock Buybacks

BrexitSep 10, 2021 14:22
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Bloomberg. Senator Ron Wyden, a Democrat from Oregon, speaks to members of the media while arriving for a vote in the basement of the U.S. Capitol in Washington, D.C., U.S., on Tuesday, Aug. 3, 2021. The Senate majority leader's plan to pass a $550 billion infrastructure bill this week hit a potential obstacle from a surprising source when a key Republican announced he tested positive for Covid-19 and would quarantine for 10 days. Photographer: Al Drago/Bloomberg 2/2

(Bloomberg) -- Two senior Democratic senators proposed a 2% tax on corporate stock buybacks in an effort to boost investment and reduce what they termed as tax avoidance.

The plan, released by Senate Finance Committee Chairman Ron Wyden of Oregon and Senate Banking Committee Chairman Sherrod Brown of Ohio, comes as Democratic lawmakers assemble a raft of tax measures to help pay for a $3.5 trillion budget bill that contains the bulk of President Joe Biden’s longer-term economic agenda.

“Rather than investing in their workers, mega-corporations used the windfall from Republicans’ 2017 tax cuts to juice their stock prices and reward their wealthiest investors and their executives through massive stock buybacks,” Wyden said in a statement on the proposal Friday.

Brown said, “It’s past time Wall Street paid its fair share and reinvested more of that capital into the workers and communities who make those profits possible.”

The Senate Finance Committee had been discussing both an excise tax on stock buybacks and a levy on a measure of excess pay for chief executives, Bloomberg reported last week. 

Record Buybacks

The 2% excise tax on stock buybacks pitched by Wyden and Brown wouldn’t apply to transactions for funding an employee pension plan or those below a “de minimis threshold,” according to a statement released by Brown’s office. “Special rules address the treatment of foreign corporations,” though so-called inverted companies -- a term used to describe American firms that shift their headquarters abroad -- “are fully subject to the excise tax.”

Equity buybacks totaled a record $806 billion in 2018, the first year after passage of the tax cuts -- including a reduction in the corporate tax rate to 21% from 35% -- enacted by Republican lawmakers and then-President Donald Trump, according to the Brown and Wyden statement. “In 2021, as millions of families are struggling through the pandemic, corporate stock buybacks should approach, or even surpass, this record.”

The Senate Finance and House Ways and Means Committees are now hashing out proposed legislative text that would boost taxes to help pay for expanded spending on social programs including child care, elder care and tax credits for children. Democratic lawmakers have yet to nail down agreement on the scope of the overall legislation -- which will require the unanimous backing of the party’s caucus in the Senate, given universal GOP opposition to the initiative.

(Updates with context in final two paragraphs.)

©2021 Bloomberg L.P.

Top Senate Democrats Float 2% Excise Tax on Stock Buybacks
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email