Congress last year imposed a 1% tax on stock buybacks. If Apple purchases $1 billion of its stock, it will owe Uncle Sam $10 million. In his interminable State of the Union address, Joe Biden proposed quadrupling this tax to 4%. And should Biden succeed, Democrats will then try to push the tax even higher.
Stock buybacks are politically unpopular, especially with the left. But this episode of What’s Ahead both refutes the arguments against them and gives reasons why the tax is damaging. The tax is, in effect, an increase in the already too high capital gains levy and a back door to imposing a wealth tax.
This article was originally published by Forbes.com. Read the original article here.