Democratic leaders in the Senate launched a new offensive against large corporations by introducing a bill that seeks to quadruple the tax on stock buybacks, going from 1% to 4%, in addition to closing tax mechanisms that, they denounce, have allowed executives and shareholders to benefit from tax advantages while workers face economic pressures.

The proposal, called the Stock Buyback Accountability Act of 2026, was introduced by Senate Democratic Leader Chuck Schumer, along with Senator Ron Wyden, top Democrat on the Finance Committee, and Senator Elizabeth Warren, ranking member of the Banking Committee.

The initiative comes amid growing debate over the use of stock buybacks by American companies, especially after these operations surpassed $1 trillion for the first time following the approval of recent tax measures promoted by Republicans.

Democrats charge that buybacks benefit the richest

The project's promoters maintain that buybacks have been used by corporations to artificially raise the value of their shares and mainly benefit executives and large investors.

“While workers struggle to pay for gas and food, CEOs are choosing to spend billions buying back their own stock,” Schumer said.

The senator assured that the tax cuts approved during Donald Trump's first administration did not generate the promised wage increases or investments, but rather drove a historic wave of stock market buybacks.

They seek to close a loophole used by executives

In addition to increasing the excise tax, the legislation seeks to eliminate a provision that allows companies to reduce their tax burden by giving stock options to their highest-paid executives.

For Senator Elizabeth Warren, the current system disproportionately favors economic elites.

“It is shameful that wealthy shareholders and executives profit while American families pay exorbitant prices for food, gas and housing,” he said.

For his part, Wyden argued that companies should allocate more resources to hiring workers, business growth and innovation, rather than prioritizing stock buybacks.

Democrats highlight that currently the richest 1% of the population owns more than half of the corporate shares, which is why they consider that the project represents a step to reduce inequalities and reorient business investment towards the productive economy.