Buybacks and Corporate Taxes

When shares of stock are repurchased by the issuing company, it reduces the number of outstanding shares and raises the earnings-per-share ratio, which can help boost the stock price. After a significant corporate tax cut was enacted at the end of 2017, S&P 500 stock buybacks surged — and a new record was set in 2022. It's yet to be seen how a 1% excise tax on net buybacks that started in 2023 will affect buyback activity going forward.