WASHINGTON (Reuters) – The tax, energy and prescription drugs legislation proposed by Democrats will include an excise tax on stock buybacks, U.S. Majority Leader Chuck Schumer said on Friday.
The Senate is scheduled to hold a rare Saturday session, kicking off debate on the bill that could continue through the weekend.
“We are adding in an excise tax on stock buybacks that will bring in $74 billion,” Schumer told reporters. He did not provide the effective date for the new tax if the legislation is enacted into law.
“I hate stock buybacks,” Schumer said, adding, “I think they are one of the most self-serving things that corporate America does.” The New York Democrat said that companies instead should be investing in worker training, research, modernizing equipment and other activities.
The buybacks reduce the number of outstanding shares of a company, resulting in higher prices of remaining shares, benefiting stockholders.
(Reporting by Moira Warburton and Richard Cowan; Editing by Chizu Nomiyama)
