It's kinda ironic that on one hand the financial press decries public companies for not offering dividends anymore, and on the other hand the financial press decries them for offering buybacks.<p>A buyback is a tax-advantaged dividend. Period. Instead of distributing profits to shareholders as dividends, which are taxed as ordinary income at 33+%, the additional money flows out as capital gains, which are taxed at 20%. The shareholders who sell into the buyback receive cash directly for their shares, taxed at long-term capital gains rates. The shareholders who don't sell receive capital appreciation, as the intrinsic value of the corporation is divided among fewer shares.<p>Now, if you are an ordinary not-stock-holding laborer, you may have a legit complaint that buybacks fleece the U.S. government of money that rich people would otherwise pay in taxes. But if you're a rich person and not an idiot, you should be glad to see public companies offer buybacks.