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The bill eliminates the 1% tax on stock repurchases, giving corporations and investors a direct tax cut and simpler compliance while risking increased share buybacks that can divert funds from workers and investment and reducing federal revenue, which may raise deficits or pressure program funding.
Corporations and financial institutions will no longer pay the 1% excise tax on stock repurchases beginning in 2025, reducing corporate tax costs and likely increasing after‑tax returns for investors.
Taxpayers and the IRS administration will face simpler corporate tax compliance and reduced IRS administrative burden because the repurchase excise tax provision is eliminated.
Workers, small-business owners, and taxpayers may see fewer resources for wages, capital investment, or debt reduction because repealing the tax could encourage more share repurchases that divert corporate cash to buybacks.
Taxpayers and beneficiaries of federal programs could face higher federal deficits or reduced program funding because eliminating the repurchase tax reduces corporate tax receipts.
Based on analysis of 2 sections of legislative text.
Eliminates the federal excise tax on corporate stock repurchases by repealing the relevant chapter of the Internal Revenue Code effective for tax years beginning after Dec 31, 2024.
Introduced January 23, 2025 by David Kustoff · Last progress January 23, 2025
Repeals the federal excise tax that applied to corporate stock repurchases (the buyback tax), eliminating that tax for taxable years beginning after December 31, 2024. The change removes the chapter of the Internal Revenue Code that imposed the excise tax and updates the tax code table of chapters accordingly. The result is that corporations will no longer pay this specific excise tax on share repurchases starting in 2025, which is likely to reduce federal revenues and change incentives around corporate capital allocation and shareholder returns.