Buybacks and Corporate Taxes
November 14, 2023
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.
S&P 500 stock buybacks in billions
- 2017 – $519.40
- 2018 – $806.41
- 2019 – $728.74
- 2020 – $519.76
- 2021 – $881.72
- 2022 – $922.70
Source: S&P Dow Jones Indices, 2023
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