Protecting American Savers and Retirees Act This bill repeals the excise tax on the repurchase of corporate stock (commonly known as a stock buyback) enacted by the Inflation Reduction Act of 2022.Under current law, a domestic corporation whose stock is traded on an established securities market (e.g., the New York Stock Exchange or NASDAQ) is required to pay an excise tax (that is not deductible) on the repurchase of its stock in the amount of 1% of the fair market value of such stock. (Some exceptions apply.)
Impact
If enacted, HB 684 would significantly alter the existing corporate tax landscape by eliminating the excise tax that has been applied to stock repurchases. Supporters of the bill argue that stock buybacks are a legitimate use of corporate resources that can enhance shareholder value and signal strong corporate health. By revoking this tax, the bill is anticipated to encourage firms to allocate profits towards buybacks, potentially leading to an increase in stock prices and enhanced returns for investors and retirees.
Summary
House Bill 684, titled the 'Protecting American Savers and Retirees Act', proposes the repeal of the excise tax imposed on the repurchase of corporate stock as outlined in the Internal Revenue Code of 1986. The bill aims to eliminate what its proponents consider a deterrent to corporate investment and reinvestment practices. By removing this tax, the bill seeks to promote more favorable conditions for companies engaging in stock buybacks, positioning it as a measure to support stock market stability and investor confidence.
Contention
Nevertheless, this bill is expected to face opposition from various sectors concerned about the implications of unfettered stock buybacks on the wider economy. Critics assert that such corporate practices often prioritize short-term gains over long-term business investments and workforce development. There is a fear that removing this tax could exacerbate economic inequalities, as the benefits of stock buybacks may disproportionately favor wealthy shareholders while neglecting the interests of employees and the broader community.
Closing the Bump Stock Loophole Act of 2023 This bill subjects bump stocks to regulation under federal firearms laws. Specifically, the bill adds bump stocks to the list of firearms subject to regulation (e.g., registration and licensing requirements) under the National Firearms Act. Additionally, it includes bump stocks in the list of firearms subject to regulation (e.g., background check requirements) under the Gun Control Act of 1968.