U.S. Senate Committee on Finance

08/07/2022 | Press release | Distributed by Public on 08/07/2022 15:43

Wyden Stock Buyback Legislation Passes Senate

August 07,2022

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Ashley Schapitl (202) 224-4515

Wyden Stock Buyback Legislation Passes Senate

Legislation would incentivize big corporations to invest in their workers

Washington, D.C. - Legislation authored by Senate Finance Committee Chair Ron Wyden, D-Ore., to incentivize big corporations to invest in their workers rather than wealthy executives and shareholders today passed the Senate.

A modified version of the Stock Buyback Accountability Act was included in the Inflation Reduction Act. The proposal would impose a 1 percent excise tax on the repurchase of stock by publicly-traded companies.

"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," said Wyden. "Even as millions of families struggled through the pandemic, corporate stock buybacks once again hit all-time highs. Stock buybacks are currently heavily favored by the tax code, despite their skewed benefits for the very top and potential for insider game-playing. My proposal with Senator Brown simply ends this preferential treatment and encourages mega-corporations to invest in their workers."

Rather than investing in their workers, mega-corporations used the windfall from Republicans' 2017 tax cuts to juice their stock prices and reward their executives and wealthiest investors through massive stock buybacks.

Corporate stock buybacks set at an all-time high in 2018, only to break that record in 2021 with a new all-time high in the midst of a pandemic.

Stock buybacks are currently heavily favored by the tax code, despite their skewed benefits for the very top and potential for insider game-playing. Wyden's bill cuts down this preferential treatment and encourages mega-corporations to invest in their workers.

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