biden stock buyback pushback
President Joe Biden has championed a substantial financial proposal in the latter half of his term: increasing taxes on businesses engaging in stock buybacks. This initiative aims to redirect corporate funds toward business expansion and job creation, instead of primarily benefiting executives who typically reap the rewards of such programs. However, despite its intended benefits, the proposal has encountered noteworthy resistance, even from traditionally supportive voices within the Democratic camp.
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Biden’s Plan
Currently, businesses pay a 1% tax on stock buybacks, a charge created when the Democrats passed the Inflation Reduction Act in 2022. In the State of the Union in January, though, Biden pushed raising the rate to 4%. Per a Morningstar report, he specifically called out the oil industry, noting that “Big Oil … invested too little of [their] profit to increase production and keep gas prices down. Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”
Biden also notes that this tax will increase federal revenue, which is important if he wants to continue pushing for progressive domestic policy in a potential second term.
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The Pushback
biden stock buyback pushback
One of the voices speaking out against Biden’s plan is a billionaire who would normally be on his side: Warren Buffet, who has publicly supported the Democratic Party for some time.
“When you are told that all repurchases are harmful to shareholders or the country, or particularly beneficial to CEOs, you are listening either to an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” Buffet wrote in a note to shareholders of his company, Berkshire Hathaway.
More likely opponents of Biden’s have also chimed in. Writing in the Wall Street Journal opinion section in…
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