Stock-Buyback Tax Revival in Senate Bill Leaves Wall Street Unfazed

A tax on stock buybacks is on the cusp of becoming law, potentially hampering a beloved tactic by companies and investors to boost share prices.
The proposed measure levies a 1% excise tax on the value of corporate stock buybacks, which Democrats are hoping will slow their use because they produce capital gains but no immediate tax bills. The tax would also potentially shift some companies to opt instead for dividends, which are taxed when issued.
Buybacks remain the largest source of demand for U.S. equities, according to a Goldman Sachs Group Inc. report from earlier this year, which also predicted that S&P share repurchases would increase 12% in 2022 to reach $1 trillion.