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It’s not really possible to give buybacks and dividends the same tax treatment unless we make massive changes to how volatile assets like public equities are ta
by xadhominemx 6y ago
It’s not really possible to give buybacks and dividends the same tax treatment unless we make massive changes to how volatile assets like public equities are taxed, and any of those changes would come with their own set of knock on effects. It’s not obvious to me that buyback tax reform is something we should obviously do.
- ogre_codes 6y agoI'm not passionate about this, but just wanted to point out that it is entirely possible to tax buybacks nearly the same as taxing dividends. Existing shareholders would be taxed based on the amount spent on the buybacks, just as if they'd been paid a dividend and bough back shares themselves. > It’s not obvious to me that buyback tax reform is something we should obviously do. The big reason I think it should be reformed it creates lopsided incentives which reward some shareholders more than others. As I said above, I do think it could be better, but I'm not super passionate about it.
- occamrazor 6y agoFor public companies it would be relatively simple: evaluate capital gains at mark-to-market prices. For other assets I agree that it’s complicated.
- xadhominemx 6y agoNo that’s the part that’s hugely disruptive. If a stock goes up you’re forced to sell to pay a tax bill. Then if it goes down the next year the government has to cut you a huge check. Very messy.