Dividends and stock buybacks are equivalent except for the tax consequences. Money is flowing from the company to investors. If, say, the government had 20% of

Dividends and stock buybacks are equivalent except for the tax consequences. Money is flowing from the company to investors. If, say, the government had 20% of the stock and sold it into the buyback to remain at 20%, that's similar to a dividend. So this ends up being equivalent to taxes on both dividends and buybacks (and other economic participation like buyouts from mergers), except that no investor in particular has to pay the tax.