John,

Stock buybacks are a gimmick used by corporations in which they buy up their own stock to artificially inflate its price, further enriching CEOs and other wealthy shareholders. Because about 90% of all corporate stock is owned by the richest 10% of Americans―and over half is owned by the top 1%―whenever corporations use this market maneuver they’re putting the profits of the wealthy over the wages of working people.[1][2]

Because we lack sufficient disclosure of stock buybacks, it is far too easy for corporate executives and other company insiders to manipulate the timing and structure of these buyback programs in a way that serves to fatten their own compensation packages.  

We're already fighting to increase the stock buybacks tax from 1% to 4% to discourage the use of this unsavory practice and encourage corporations to invest in workers' wages, not CEO and shareholder profits. But there's still more that we can do.

Last year the SEC finalized a new disclosure rule that includes a requirement that companies disclose whether certain executives traded stock immediately before or after a buyback announcement. Such disclosure would give regulators, investors, and the general public more insight into this opaque and easily abused practice.

Unfortunately, in December, the conservative Fifth Circuit Court of Appeals―well-known for virtually always siding with big business―struck down the rule.[3][4]

The short-sighted practice of wasting corporate profits on stock buybacks is going to continue to be rife with opportunities for abuse that puts the public at risk until strong regulation is in place.

The SEC should not hold back.

Add your name to tell the SEC to issue a revised version of the stock buybacks disclosure rule so the public can see who is manipulating the system for their own benefit.

Thank you for taking action to hold greedy corporations accountable.

David Kass
Executive Director
Americans for Tax Fairness Action Fund

[1] The rich now own a record share of stocks
[2] Distribution of Household Wealth in the U.S. since 1989
[3] SEC Poised to Rework Stock Buyback Rule After Court Tosses It
[4] The Surprising History of the 5th Circuit Court of Appeals