Companies facing 1st tax on stock buybacks in Biden bill

By MARCY GORDON
AP Business Writer

WASHINGTON (AP) — Democrats have pulled off a quiet first in legislation passed this month: the creation of a tax targeting stock buybacks. The bill includes a new 1% excise tax on companies’ purchases of their own shares, a tactic that companies have long used to return cash to investors and bolster their stock’s price. Democrats say that instead of buying back shares, big companies should use the money to increase employees’ wages or invest in their business. But is that likely to happen with the tax? Some experts are skeptical. The tax on stock buybacks is scheduled to take effect Jan. 1.