Opinion Biden’s Good Idea: Quadruple Stock Buyback Tax

Rob Battisti

Rob Battisti

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https://www.marketwatch.com/amp/sto...e-tax-on-corporate-stock-buybacks-11675716462


In his State of the Union address on Tuesday night, President Joe Biden will call for quadrupling the tax on corporate stock buybacks, the White House said Monday.

The Inflation Reduction Act, which Biden signed into law in August, imposed a 1% tax on buybacks.

Read: Inflation Reduction Act has been signed into law — what it means for your investments

Biden’s new proposal is all but certain to be dead on arrival in the House of Representatives, which Republicans control following November’s midterm elections.
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I had no idea there was no additional penalties or taxes on corporate buy backs. 1% is NOTHING and 4% proposal still seems like nothing.

Why do republicans hate hard working Americans in favor of big business?

I am no fan of Biden at all, but I support this proposal.

Meta just announced a huge buy back just after laying off 11k people with likely more layoffs to come.

In the 2008 crisis the banks used our tax payer money on buy backs.

F big business.
 
Rob Battisti said:
@Jack V Savage whats your thoughts here?
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I think for a very long time, we've had little need for prioritization because higher deficits were a positive thing. Even with inflation falling, I don't think we're in that situation any more. That means that some combination of higher revenue and less spending is ideal (and every revenue cut or spending increase should face strict cost-benefit analysis, while more revenue is more likely to be good). Seems like an OK way to raise more revenue--not the best but far from the worst. The 2017 corporate tax cuts were sold as being likely to lead to more investment (in the economic rather than financial sense) but that didn't happen, and a lot of the extra cash we gave to corporations just led to buybacks, which is kind of fucked up. Generally, though, I think buybacks get a bad rap. Anyway, to sum up: The idea is probably more good than bad and blocking it is probably more bad than good. Not a huge deal either way, IMO.
 
Jack V Savage said:
I think for a very long time, we've had little need for prioritization because higher deficits were a positive thing. Even with inflation falling, I don't think we're in that situation any more. That means that some combination of higher revenue and less spending is ideal (and every revenue cut or spending increase should face strict cost-benefit analysis, while more revenue is more likely to be good). Seems like an OK way to raise more revenue--not the best but far from the worst. The 2017 corporate tax cuts were sold as being likely to lead to more investment (in the economic rather than financial sense) but that didn't happen, and a lot of the extra cash we gave to corporations just led to buybacks, which is kind of fucked up. Generally, though, I think buybacks get a bad rap. Anyway, to sum up: The idea is probably more good than bad and blocking it is probably more bad than good. Not a huge deal either way, IMO.
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Ah man the one thing I agree on with Biden and it’s not even a big deal!?

I’d be in support of “10 year ban on stock buy backs after any government subsidies”
 
Why doesn't he he focus on making sure his son pays the taxes that he owes before he starts penalizing america with an insane tax code
 
Rob Battisti said:
Ah man the one thing I agree on with Biden and it’s not even a big deal!?

I’d be in support of “10 year ban on stock buy backs after any government subsidies”
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:) Sorry, man.

You didn't agree on the infrastructure deal, allowing Medicare to negotiate drug prices, getting out of Afghanistan, ending the drone war, pardoning of people convicted of marijuana possession, the CHIPS Act or the PACT Act? All big deals, and I'd think you would agree with them.
 
Saye_mc said:
Why doesn't he he focus on making sure his son pays the taxes that he owes before he starts penalizing america with an insane tax code
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Its not an insane tax code. Have you seen Exxon and Chevron make record profits this year though this by polluting the world, while the American economy suffers?

Also why did you not say this about Bunker Boy paying taxes?
 
The controversy around stock buybacks is really a bit of a red herring. It's only a common method, sometimes the most efficient method, of returning capital to owners/shareholders.

You could say that the capital is there at the expense of the mistreatment of labor; that is, companies are making exorbitant profits while paying their workers shit wages. But that makes it a symptom of the imbalance, not the cause. Fixing the labor market is what really needs to be done.

You could outright ban stock buybacks and it's not going to fix the labor markets. If you make buybacks less tax-efficient, dividends would become more attractive again, perhaps.
 
The inflation reduction act already included a 1% excise tax on stock buybacks. Seems to be something Dems in the senate had been proposing for awhile and just recently got something passed. Can’t say if I agree or not on it as I haven’t heard much about them.
 
Saye_mc said:
Why doesn't he he focus on making sure his son pays the taxes that he owes before he starts penalizing america with an insane tax code
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It was a very bad look when so many corporations took the Trump tax windfall ( which people were told would trickle down) and used it for stock buy backs

At least the Dems are trying to do something
 
AnGrYcRoW said:
It was a very bad look when so many corporations took the Trump tax windfall ( which people were told would trickle down) and used it for stock buy backs

At least the Dems are trying to do something
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theyve been trying to do something for years. They've dominated the political landscape of this country, both locally and federal since 2008. They've held all three branches of government 3 times since 2008, they don't want to help poor people because then nobody will vote for them.

In two short years trump gave minorities the lowest unemployment rates in history, gave the whole of the country a booming economy and he did so while being endlessly harassed by democrats
 
Well Americans are invested in those firms too. So indirectly he’s taxing us more cause we are shareholders directly, through pension funds, or employees etc
 
Rob Battisti said:
Why not both? Is penalizing businesses that lay off workers and buy back their own stock insane?
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What about businesses that buy back their own stock, but don't lay off employees? Buy backs aren't always used in the way you're suggesting.
 
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