4 ms·
Traditionally you also have dividends as well. Stock buybacks are basically tax avoidance.
by peterbraden 7y ago
Traditionally you also have dividends as well. Stock buybacks are basically tax avoidance.
- ghaff 7y agoMany companies still pay dividends as well. But, yes, functionally both dividends and stock buybacks return money to shareholders, i.e. the owners of the company. However, as you say, in the US the tax code tends to favor capital gains over dividends.
- sanderjd 7y agoYeah what I keep not being sure of with this whole debate is: are people mad about companies using buybacks instead of dividends because of the tax avoidance angle, or are they mad at the entire idea of companies giving back money to shareholders either way? It seems like buybacks are the boogeyman, but that an argument like "if they had kept their $45B over the past few years, they wouldn't need $50B now" applies just as well to dividends.
- pseudalopex 7y agoPeople can be mad about or rationally opposed to more than one thing at a time.
- sanderjd 7y agoSure, maybe it's both. What I'm saying is that it seems muddled to me in these articles, I can't quite tell which thing is actually the problem, or whether it is both.