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Stock buybacks account for about ~1 trillion of corporate spending and are taxed at 0%. Dividends are taxed as long term cap gains. I’m of the opinion that the
by dclusin 4y ago
Stock buybacks account for about ~1 trillion of corporate spending and are taxed at 0%. Dividends are taxed as long term cap gains.
I’m of the opinion that they should either be outright not allowed or taxed according to long term cap gains. Since they’re just used as a loophole to give back to investors tax efficiently.
- anm89 4y agoI never understood the tax angle to that. That clarifies a lot of things
- rsj_hn 4y agoThe purchase of stock is not taxed, but the sale certainly is a taxable event, and does not even take inflation into account when determining the capital gain. In the same way, when one company buys another company, that does not trigger a taxable event for the acquiring company, but it does for shareholders who sell their stock in the acquired company. What I think you are better off objecting to is the tax rate. In my opinion there should not be special tax rates for long term versus short term capital gains, or different tax rates for income received by selling capital versus income received by selling labor. Tax rates should be agnostic as to how the income was earned, and this alone will close a lot of loopholes and change the situation where a wealthy person living off of dividends or long term capital gains pays a lower rate than a middle class person living off of their wages.