- Florida Republican Sen. Marco Rubio joined a chorus of Democratic voices in his objection to the corporate use of cash for stock buybacks.
- Rubio backed a plan unveiled Tuesday that proposes changing the way buybacks are taxed as a way to discourage companies from pursuing them.
- Strategists say that Rubio’s entry into the fight does not signal a bi-partisan war on the stock market in the upcoming election, but one said it’s “disconcerting” and “it’s one thing to have the far left suggesting some of these things, but if you start to get the right wing doing it, it’s a little bit of a game changer.”
Florida Republican Sen. Marco Rubio proposes changing the capital gains tax as a way to discourage corporate buybacks, a position that could spook the stock market if other prominent Republicans get behind the idea.
The capital gains tax is a new twist on the assault on corporate buybacks, which had been mainly under fire by just Democrats until now. Senate Minority Leader Chuck Schumer of New York and independent Sen. Bernie Sanders of Vermont have proposed legislation that would force companies to raise wages and provide more worker benefits as a condition on buybacks.
Some legislators have been bristling that the GOP tax overhaul encouraged companies to buy stock instead of investing in plants and equipment, or workers. The tax plan cut the corporate rate to 21 percent from 35 percent and included incentives to spur capital spending, but critics say it has fallen short.
“It’s disconcerting that we start making decisions for companies … I think it gets a little frightening,” said James Paulsen, chief investment strategist at Leuthhold Group. “It’s one thing to have the far left suggesting some of these things, but if you start to get the right wing doing it, it’s a little bit of a game changer.”‘