So there is a tax difference, we both agree. If I bought a stock yesterday and they issued a dividend today, there is no way for me to avoid the higher tax rat

So there is a tax difference, we both agree. If I bought a stock yesterday and they issued a dividend today, there is no way for me to avoid the higher tax rate. If I bought it yesterday and they decide to do a buyback today, I can hold it until the lower capital gains rate kicks in, thereby avoiding the higher tax rate. See how I can avoid paying the higher tax rate? Play some more games with tax loss harvesting, and the buyback option gives you a lot more ability to pay lower taxes. With the dividend there is a limit to the amount of loss you can offSet with short term losses. Simply put, in any given situation capital gains is likely to give you a better option to pay lower taxes.