Democratic leaders in the Senate launched a new offensive against large corporations by introducing a bill that seeks quadruple the tax on share buybacksgoing from 1% to 4%, in addition to closing tax mechanisms that, according to complaints, have allowed executives and shareholders to benefit from tax advantages while workers face economic pressures.
The proposal, called Stock Buyback Accountability Act of 2026was presented by the Democratic leader of the Senate, Chuck Schumeralong with Senator Ron Wydenwell-known Democrat on the Finance Committee, and Senator Elizabeth Warrensenior member of the Banking Committee.
The initiative comes amid growing debate over the use of stock buybacks by American companies, especially after these operations for the first time exceeded the trillion dollars after the approval of recent fiscal measures promoted by Republicans.
Democrats charge that buybacks benefit the richest
The project’s promoters maintain that buybacks have been used by corporations to artificially raise the value of their shares and mainly benefit executives and large investors.
“While workers struggle to pay for gas and food, CEOs are choosing to spend billions buying back their own stock,” Schumer said.
The senator assured that the tax cuts approved during Donald Trump’s first administration did not generate the promised wage increases or investments, but rather drove a historic wave of stock market buybacks.
According to the Democrats, companies in the S&P 500 index increased these operations by more than 50% after the 2017 tax reform, going from approximately $530 billion to more than $800 billion.
They seek to close a loophole used by executives
In addition to increasing the excise tax, the legislation seeks to eliminate a provision that allows companies to reduce their tax burden by giving stock options to their highest-paid executives.
For Senator Elizabeth Warren, the staunch system disproportionately favors economic elites.
“It is shameful that wealthy shareholders and executives profit while American families pay exorbitant prices for food, gas and housing,” he said.
For his part, Wyden argued that companies should allocate more resources to hiring workers, business growth and innovation, rather than prioritizing stock buybacks.
Democrats emphasize that currently the The richest 1% of the population own more than half of the corporate sharesso they consider that the project represents a step to reduce inequalities and reorient business investment towards the productive economy.
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