In his March State of the Union address, President Biden proposed raising the excise tax on stock buybacks from 1% to 4% to discourage companies from engaging in stock repurchases. On April 12, the Department of Treasury and the IRS followed up with proposed regulations on stock buybacks. Kamala Harris endorses Biden’s plan to quadruple the tax. Is there evidence that the proposed tax has affected buyback-related stock performance? If there was a tax effect, would ongoing stock performance reflect the odds of this tax becoming enacted, reflecting the market’s view of whether Harris or Trump will be the next president?
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