New corporate stock buyback tax poised to take effect in 2023: What to know

A new corporate tax on stock buybacks that is poised to take effect in January could cost U.S. companies billions of dollars.

The 1% levy on stock repurchases, which will apply to only publicly traded companies, was passed by Democrats earlier this year as part of a sweeping health care and climate spending package. The tax is estimated to raise about $74 billion over the next decade.

Democrats have said the 1% fee is designed to slow companies' tendency to buy back their own stock from investors with the tax.

"I hate stock buybacks," Senate Majority Leader Chuck Schumer, D-N.Y., said earlier this year. "I think they are one of the most self-serving things that corporate America does."