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Maybe it would make companies go back to dividends instead of favoring stock buybacks - which imho would be a nice reduction of financialization behavior
by dv_dt 6y ago
Maybe it would make companies go back to dividends instead of favoring stock buybacks - which imho would be a nice reduction of financialization behavior
- walshemj 6y agoAnd add a small say $5k allowance for small stockholders like the UK does.
- toast0 6y agoI don't see how. Qualified dividends are taxed at long term capital gains rates; if those rates go up (for high income) stockholders, those stockholders will be generally less pleased about recognizing the income rather than defering it with a buyback. As a stockholder, I can always make my own dividend by selling shares; but I can't make my own stock buyback, because I only get a portion of the dividend.
- pembrook 6y agoThis would have literally no effect on buybacks vs dividends as both are taxed as capital gains. In fact, it might favor buybacks even more since you aren’t forced to pay taxes on share price increases until you sell. Dividends give you a tax bill every year, even if reinvested. Also, there’s nothing nefarious about buybacks. It’s just a more tax efficient way to return money to shareholders. There’s no boogie man there.