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A comment on Companies Use Borrowed Billions to Buy Back Stock, Not to Invest. Parent comment

Re:Companies Use Borrowed Billions to Buy Back Stock, Not to... by devoply on Saturday August 10, 2019 @09:47PM (#20665700)
there is also a term called bleeding the pig... where you load up a company with a lot of debt and eventually the company goes bankrupt... guess who doesn't lose out though. buybacks are taxed at a capital gains tax rate, whereas dividends are subject to ordinary income tax.
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Re:Companies Use Borrowed Billions to Buy Back Stock, Not to... by akavi on Saturday August 10, 2019 @10:09PM (#20665762)
In the USA, dividends on stock one has held for more than a year is taxed as long term capital gains.

The tax advantage of buybacks is they allow the shareholder to choose when the taxes are incurred, not how they’re taxed.

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Re:Companies Use Borrowed Billions to Buy Back Stock, Not to... by throw0101a on Saturday August 10, 2019 @10:01PM (#20665742)
> ... whereas dividends are subject to ordinary income tax.

Not in Canada:

> Unlike many other countries, dividends from Canadian based companies are eligible for a somewhat convoluted set of calculations that can fondly be described as the dividend gross up and tax credit system. The basic rationale behind this system is that dividends are paid by corporations after the taxman has already taken his cut. Therefore, if dividend payments were fully taxed in the hands of the investor as well, it would equate to a double taxation.

* https://www.fool.ca/13-steps-to-financial-freedom/step-8-the...

* https://www.investopedia.com/terms/d/dividendtaxcredit.asp

It's slightly convoluted, but if you have investments in taxable accounts, then there's a bit of advantage in them than simply interest. Though capital gains in Canada is only taxed at half of one's marginal rate as well.

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Re:Companies Use Borrowed Billions to Buy Back Stock, Not to... by Scoundreller on Sunday August 11, 2019 @05:07PM (#20670522)
Right, but this means, for Canadians, dividends paid by non-Canadian corps are taxed as regular income. Stocks to do buybacks instead of dividends are more valuable to us.
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Re:Companies Use Borrowed Billions to Buy Back Stock, Not to... by chiefalchemist on Saturday August 10, 2019 @09:57PM (#20665727)
Are there that many companies bleeding the pig? Possible. But how likely?
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