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Lots of corporate tax code is about taxing the money flows from the company to the physical persons. Somehow buybacks weren't taxed until recently.
by yread 3y ago
Lots of corporate tax code is about taxing the money flows from the company to the physical persons. Somehow buybacks weren't taxed until recently.
- lotsofpulp 3y agoHow are buybacks not taxed? The entity selling the shares has always had to pay income tax on capital gains from selling shares.
- robertlagrant 3y agoI think this is wrong, twice: - buybacks are taxed when a person gets money for their shares, as capital gains tax - lots of corporate tax is about exactly the opposite of what you say; i.e. reaching inside a company's bank account and taxing its profits directly, rather than waiting for the money to flow out and taxing it as VAT/income tax/cap gains. A huge amount of money and effort is spent on balancing this correctly, with R&D credits, structuring profits to appear in the correct year, etc etc.
- yread 3y agoYes, but when your shares gain in value you can borrow more money on them. That is not taxed.