Bill Overview
Title: Protecting American Savers and Retirees Act
Description: This bill repeals the 1% excise tax on the repurchase of corporate stock enacted by the Inflation Reduction Act of 2022.
Sponsors: Rep. Kustoff, David [R-TN-8]
Target Audience
Population: Corporate shareholders
Estimated Size: 500000
- The bill impacts corporate shareholders as it addresses the excise tax on corporate stock repurchase.
- Most corporate shareholders tend to be individuals with substantial investments, i.e., wealthy individuals.
- Corporate stock repurchases can indirectly affect employees through changes in profit allocation, potentially affecting employee benefits or salaries.
- The global population of corporate shareholders is significant, given the multinational nature of many corporations.
Reasoning
- The policy primarily affects individuals who have investments in corporate stocks, as it changes the tax implications of stock repurchases
- As a significant number of corporate shareholders in the US may already be in the upper income brackets, the removal of a 1% excise tax may not drastically change their overall financial situation, but could influence marginal wellbeing improvements, particularly in perceived wealth or investment security.
- Employees of corporations might experience medium-term effects if corporations choose to allocate more resources to stock repurchases, possibly influencing compensation and benefits.
- A portion of Americans who do not have significant stock investments will not feel a direct impact from this policy change.
Simulated Interviews
Financial Analyst (New York City, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Removing the tax on stock repurchases is beneficial; it encourages companies to buy back shares, which can improve stock prices.
- This change might provide some growth in my investments. I'm optimistic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 9 |
Retired Teacher (Los Angeles, CA)
Age: 60 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I think removing the tax makes sense if it lowers costs for companies, but I'm not sure how much it will impact me directly.
- My mutual funds might see a bit of a bump in returns, though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Tech Entrepreneur (Austin, TX)
Age: 35 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- Removing the excise tax could lead to more stock buybacks, increasing my overall net worth due to the higher valuation of my options.
- Long-term, this could be very beneficial if my company chooses to repurchase shares.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 10 | 9 |
| Year 3 | 10 | 9 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 10 |
Software Developer (Seattle, WA)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I'm not really aware of how stock repurchases or taxes on them affect me personally.
- I'd like to earn and save more, but this seems more relevant to upper management and shareholders.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Corporate Executive (Chicago, IL)
Age: 52 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 4/20
Statement of Opinion:
- I think it’s a sensible move as it encourages optimizations in shareholder value.
- This could enhance my investment portfolio and retirement plans significantly, especially post-COVID.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 10 | 9 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 9 |
Marketing Manager (Miami, FL)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I am supportive of any policy that reduces unnecessary taxes.
- Though it might not immediately affect my life, it could improve the environment for my investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Automotive Engineer (Dallas, TX)
Age: 48 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- I'm not sure this policy will change much for me since my portfolio isn't very focused on direct stock investments.
- It seems to be aimed at higher income brackets.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Investment Banker (San Francisco, CA)
Age: 33 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 15.0 years
Commonness: 2/20
Statement of Opinion:
- Repealing the excise tax is a boost for the industry; there's more incentive for buybacks, which affects financial strategies I work with daily.
- It might result in higher bonuses if activity rises.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 10 |
Small Business Owner (Denver, CO)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- While mainly focused on my business, I occasionally consider stock strategies, so this may offer better opportunities.
- I hope larger firms reinvest in growth that can benefit the broader economy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 8 |
Graduate Student (Boston, MA)
Age: 24 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- I don't really follow stock market policies much.
- This seems to be more relevant to people with investments already.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $1500000000 (Low: $1200000000, High: $1800000000)
Year 2: $1500000000 (Low: $1200000000, High: $1800000000)
Year 3: $1500000000 (Low: $1200000000, High: $1800000000)
Year 5: $1500000000 (Low: $1200000000, High: $1800000000)
Year 10: $1500000000 (Low: $1200000000, High: $1800000000)
Year 100: $1500000000 (Low: $1200000000, High: $1800000000)
Key Considerations
- This repeal impacts government revenue derived from corporate financial operations, which are significant to the federal budget.
- Current economic conditions and stock market volatility might influence the extent to which corporations engage in stock repurchases.
- Changes in corporate behavior following the tax repeal could affect employee benefits and broader economic contributions.