Buybacks and dividends are not equivalent, buybacks are tax advantaged in ways that dividends are not.
We've allowed numerous companies to get to a size where they are "too big to fail". They know they are too big to fail, and they get to take advantage of this position. They get to go into near unlimited amounts of debt to finance buybacks to enrich shareholders and C levels, and when times are good this all works out. When the economy enters a downturn and they don't have cash on hand to weather the storm, they know the Fed will be there to bail them out.
Something is fundamentally broken here. You can reasonably argue whether it is with the buybacks, or the bailout, but this system is fucked.
For more in depth reporting on this, I highly recommend checking out Matt Taibbi. https://taibbi.substack.com/p/resetting-the-bomb
[citation needed; location specific]
Here in Canada both capital gains and dividends of Canadian companies have special tax treatments.
Also remember: in both cases the money leaving the company are profits, which are (should be?) taxed at the corporate tax rate. So the government should be/is getting a cut already. The recipient of the money (either buyback or dividend) is then getting taxed again(?) potentially.
Buybacks and dividends are essentially equivalent. This comment shows a distinct lack of understanding. Of course home depot could return their profits to employees, but then it wouldn't be a business. Home depot's sole reason for existing is to return money to shareholders. If they don't do that leadership would be fired.