Biden Falls Short With His Single-Digit Stock Buyback Excise Tax

Stock buybacks are big business—they’ve regularly exceeded dividends per quarter since 2010 and hit a record $1.26 trillion last year. The Inflation Reduction Act introduced a 1% excise tax on corporate stock buybacks beginning in 2023. From the start, proponents of the tax have been vocal about it being insufficient to deter buybacks. For context, ordinary dividends are taxed at normal income tax rates, and qualified dividends are taxed up to 20%.

In last week’s the State of the Union address, President Joe Biden called for quadrupling the tax to 4%. But the excise tax should be much higher to ...