1. United States
2. Ind.
3. Letter

Dear Representative, For nearly fifty years after the Securities Exchange Act of 1934, open-market stock buybacks were treated as illegal market manipulation. Before the SEC enacted Rule 10b-18 in 1982, open-market share repurchases were judged to be a form of market manipulation because of their ability to inflate a company’s own stock price. The logic was simple: a company using its own cash to bid up its own shares is, by definition, manipulating the price. That changed by administrative fiat, not by any vote of Congress. In 1982, the Commission adopted Rule 10b-18, which provides issuers a safe harbor from manipulation liability when they repurchase their own stock under certain conditions. The Reagan-era SEC adopted the rule in November 1982, and buyback volume has surged ever since. The scale of the reversal is staggering. U.S. corporations set an all-time record of $942.5 billion in stock buybacks in 2024, up from $6.6 billion in 1980. The gains are captured almost entirely at the top. The wealthiest 10% of Americans own 93% of all stocks, while the bottom 50% own just 1%. This is a structural problem. Every dollar a company spends inflating its share price is a dollar not spent on wages, R&D, capital investment, or the communities it operates in. When corporations cut costs and underinvest in their own workforces, the public absorbs the gap through wage subsidies, public benefits, and infrastructure those companies no longer help fund. A rule that almost no one noticed in 1982 now underwrites a sustained transfer of corporate resources away from productive investment. I ask you to act on three fronts: • Restore the pre-1982 standard. Rule 10b-18 is an SEC rule, not a statute. Urge the Commission to rescind or substantially narrow it so that open-market buybacks again carry a presumption of manipulation. • Codify limits in law. Support legislation repealing the safe harbor and conditioning any share repurchase on demonstrated investment in workers, wages, or R&D, so the fix cannot be quietly reversed by a future Commission. • Close the interim gap. The current excise tax on buybacks is only 1%, and a proposed increase to 4% has not been enacted. Push to raise that rate and eliminate the netting loopholes that blunt it until a full ban is in place. Corporations should compete by building better companies, not by buying back their own stock while the public covers what they refuse to invest. Sincerely, A Voting Constituent