> A dividend is taxed, however. You know what else is taxed? When a company buys back stock, reducing the number of shares outstanding so that each share repre

> A dividend is taxed, however. You know what else is taxed? When a company buys back stock, reducing the number of shares outstanding so that each share represents more of the ongoing business, thus sending its stock price higher. The tax on this is called a "capital gains tax," perhaps you've heard of it?