Raise the Excise Tax Rate on Stock Repurchases

Summary: Under current law, a 1 percent excise tax is imposed on repurchases of stock (buybacks) by publicly traded corporations and certain affiliates. The amount of repurchases subject to the tax is reduced by the amount of stock issued to the public, resulting in a tax on net repurchases. Corporations with total repurchases of $1 million of less are exempt from the tax.

These two alternative proposals would increase the excise tax rate on stock repurchases from 1 percent to either 2 percent or 4 percent.

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Table 1. Estimated Revenue Effects, Fiscal Years 2026-2035

Change in revenues from TCJA extension baseline, billions of dollars

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Total, 2026 - 2035
Increase tax rate from 1% to 2%	6.7	8.4	8.2	8.7	9.1	9.8	9.2	9.1	9	9.6	87.9
Increase tax rate from 1% to 4%	19.9	24.7	23.6	24.7	25.3	27.3	25.4	24.8	24.4	26.2	246.4

Note: Estimate is relative to a Tax Cuts and Jobs Act (TCJA) extension baseline in which all expiring provisions of the TCJA are made permanent after 2025.