October 1, 2022

Rocky Daily News

Colorado Politics-Sports-Business-Weather

Companies facing 1st tax on stock buybacks in Biden bill – The Denver Post

1 min read

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By MARCY GORDON

WASHINGTON (AP) — Democrats have pulled off a quiet first in their newly signed legislation addressing climate change and health care: the creation of a tax on stock buybacks, a cherished tool of Corporate America that had long seemed untouchable.

Under the bill President Joe Biden signed into law Tuesday, companies will face a new 1% excise tax on purchases of their own shares, effectively paying a penalty for a maneuver that they have long used to return cash to investors and bolster their stock price. The tax takes effect in 2023.

Buybacks have ballooned in recent years — they’re forecast to reach $1 trillion in 2022 — as companies have swelled with cash from sky-high profits.

Investors, including pension and retirement funds, like the buybacks. But fiery…

The Associated Press

2022-08-16 14:55:12

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