WASHINGTON, D.C. – U.S. Senator Sherrod Brown (D-OH), has long advocated for real investment in Ohio workers rather than shareholder giveaways on Wall Street. Last week, President Biden signed into law the Inflation Reduction Act of 2022, which takes dramatic steps to make our tax system work better for middle class and working class families, and to ensure multinational corporations pay their fair share. It includes legislation based off of Brown’s Stock Buyback Accountability Act, and will impose a 1 percent excise tax on corporate stock buybacks.
“Big corporations should never pay less in taxes than middle class families. The Inflation Reduction Act will make corporations and Wall Street pay more of their fair share, and takes the first step to rein in Wall Street stock buybacks in decades,” said Brown. “Corporations are raising prices to pad their profits and reward executives. It’s time they did their part to lower costs, and invest in the people who make our economy work.”
Stock buybacks were nearly banned due to the market-manipulation risk they presented until 1982. There have been serious concerns about corporations using stock buybacks to inflate their stock prices, particularly when corporate insiders have significant amounts of stock-based compensation themselves.
After the 2017 Republican tax law, instead of higher job growth or a gross domestic product surge, corporations spent hundreds of billions of dollars buying back their own stock. The big winners were rich shareholders, CEOs, and foreign entities, not American workers.
The Inflation Reduction Act stock buyback provisions will specifically:
###