Under current law, a 1 percent excise tax is imposed on repurchases of stock (buybacks) by publicly traded corporations and certain affiliates. The amount of repurchases subject to the tax is reduced by the amount of stock issued to the public, resulting in a tax on net repurchases. Corporations with total repurchases of $1 million of less are exempt from the tax.

These two alternative proposals would increase the excise tax rate on stock repurchases from 1 percent to either 2 percent or 4 percent.