What Wall Street could learn from India's new tax on share buybacks

India this month imposed a levy on its companies' share purchases

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Market news: Politicians from both sides of the aisle in Washington are agitating for curbs on the record pace of stock buybacks planned by American companies. But agitation has turned to outright action in one of the world’s 10 biggest stock markets.

India this month imposed a levy on its companies’ share purchases. The proximate motive was to close a loophole after introducing a dividend tax two years back -- to ensure that companies pay something no matter how they return cash to shareholders. India’s practice of taxing markets started at least 15 years ago, when it put a duty on most financial transactions, a measure that European politicians have also been looking at.

Being something of a G-20 pioneer in financial taxes hasn’t stopped the rise of India’s equity market, which exceeds $2 trillion, making it three quarters the size of its economy. But the measures by Prime Minister Narendra Modi’s government...read more

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