> The point is that purchasing their own stock is not for the purpose of manipulating its price. The price increase is a natural consequence of there being less outstanding shares. Less outstanding share = one share is worth more.
You're literally describing manipulating price by manipulating supply. If companies aren't buying back their stock to make its price go up, why are they buying it? You're contradicting yourself.
> Buybacks has many advantages though. The biggest one is that if you want to reinvest dividends into stock you would have to pay taxes which creates a situation where you are liable for taxes even if you didn't make any money (if the price fluctuates). Buyback is like automatically reinvested dividend. I don't think it should be taxable for the reasons outlined above.
I understand that stock buybacks have advantages in certain situations for some people. I'm suggesting those advantages be eliminated.
But why? What's the problem with buybacks? Everybody still pay the taxes. They just don't pay the taxes when reinvesting profits into the same company shares until they actually sell the shares.
Why would you like to tax those people then? They aren't running away with any cash, they will pay taxes when selling the shares. They just avoid unfair side of the income tax (you pay when you profit but you don't get back or get back very in unfavorable way when you lose money).
You're literally describing manipulating price by manipulating supply. If companies aren't buying back their stock to make its price go up, why are they buying it? You're contradicting yourself.
> Buybacks has many advantages though. The biggest one is that if you want to reinvest dividends into stock you would have to pay taxes which creates a situation where you are liable for taxes even if you didn't make any money (if the price fluctuates). Buyback is like automatically reinvested dividend. I don't think it should be taxable for the reasons outlined above.
I understand that stock buybacks have advantages in certain situations for some people. I'm suggesting those advantages be eliminated.