Companies have been buying back their own stock at record levels – something President Joe Biden doesn’t care for. In his state of the union address, Biden said “corporations ought to do the right thing” and invest more of their profits in producing more goods and less in stock buybacks. To encourage them to do so, he proposed quadrupling the new tax on buybacks to 4%.
But what are stock buybacks, and why do some people consider them to be a bad thing? We tapped D. Brian Blank, who studies company financial decision-making at Mississippi State University, to fill us in.
