Mark Cuban says companies should be taxed more for buying back their own shares

Mark Cuban is taking aim at one of corporate America’s most powerful financial tools: stock buybacks.

In a post on X Tuesday, the billionaire entrepreneur argued that raising the federal tax on buybacks would pressure companies to reinvest in their businesses instead of funneling cash to shareholders. He added that such a change would disproportionately impact the wealthiest investors — himself included — while encouraging more productive long-term growth.

Cuban described the move as “a way to charge the biggest public companies more” while shifting incentives away from short-term stock price boosts. Stock buybacks, or share repurchases, occur when companies buy back their own shares from the market, reducing the number in circulation. This often lifts earnings per share and stock prices, rewarding shareholders. Critics, however, argue that the strategy prioritizes immediate gains over investments in innovation, expansion, or employees.

Corporate America’s appetite for buybacks has only grown. U.S. companies repurchased $166 billion worth of shares in July — the highest for that month on record — pushing year-to-date buybacks to $926 billion, already topping the previous record pace set in 2022, according to Birinyi Associates.

Since January 2023, the U.S. has imposed a 1% tax on repurchases through the Inflation Reduction Act. Cuban believes a steeper levy would nudge firms to either expand operations or return cash to shareholders in the form of dividends — many of which are tax-free for lower-income Americans. “Married households making under 94k pay no taxes on it. If I own it, I pay full taxes,” he wrote.

He later floated a carveout: exempting companies from the higher tax if they redistributed shares across their entire workforce — from interns to the CEO — based on each employee’s proportion of annual pay. He called it a “baby step” toward addressing income inequality and helping workers build wealth.

Banks and analysts expect buybacks to remain elevated. Citi forecasted in March that corporate repurchases could hit $1 trillion in 2025, an 11% increase from 2024. Market corrections could accelerate that trend, with firms taking advantage of discounted stock prices to buy more aggressively. Apple, Alphabet, Nvidia, Wells Fargo, and Visa alone bought back around $190 billion in shares last year, Citi noted.

Still, Wall Street strategists — including those at BTIG, Evercore ISI, Stifel, Morgan Stanley, and Wells Fargo — have warned that the S&P 500 could face a pullback in the coming months. They cite high valuations, seasonal weakness in late summer, and uncertainty around tariffs. If those warnings come true, buybacks could climb even further, as companies frequently lean on them to stabilize share prices during downturns.