IRA Buyback Excise Tax
The 1% federal excise tax on the fair-market value of corporate stock repurchases imposed by the Inflation Reduction Act of 2022, effective for buybacks executed after 2022. Projected to raise about $74B over 10 years. Empirically (early 2023-2024 data), the 1% rate is a small drag relative to the EPS lift buybacks generate, and the policy has not produced a meaningful shift back toward dividends. A higher proposed rate (4%) would have changed the calculus; the 1% rate is closer to a rounding error.
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