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Income Taxes
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following is a reconciliation of income taxes at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):
Three months ended March 31,
20232022
Amount% of EBTAmount% of EBT
Earnings before income taxes (“EBT”)
$264 $361 
Income taxes at statutory rate$55 21 %$76 21 %
Effect of:
Employee stock ownership plan dividend paid deduction(3)(1 %)(2)(1 %)
Stock-based compensation(2)(1 %)(2)(1 %)
Tax exempt interest(1)— %(2)(1 %)
Dividends received deduction(1)— %(1)— %
Nondeductible expenses
3 1 %2 1 %
Foreign operations2 1 %5 2 %
Change in valuation allowance— — %(2)(1 %)
Other(1)(1 %)(3)— %
Provision for income taxes as shown in the statement of earnings
$52 20 %$71 20 %

On January 1, 2023, the two major tax provisions of the Inflation Reduction Act (“IRA”) became effective. The IRA created a new corporate alternative minimum tax (“AMT”) based on the earnings that a company reports in its financial statements and imposes a 1% excise tax on corporate stock repurchases. Due to the lack of specific guidance at this time, AFG cannot determine whether it will be subject to the new AMT. Any AMT incurred would be available to offset AFG’s taxes payable under the standard calculation in future periods. Accordingly, the AMT is a timing difference and would result in the recording of an offsetting deferred tax asset with no impact on overall income tax expense. The excise tax on stock repurchases in excess of any issuances is recorded as part of the cost of the repurchases directly in shareholders’ equity. AFG does not have a net stock repurchase excise tax liability at March 31, 2023.