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I admit that I don't understand how discouraging or taxing stock buybacks will encourage companies to pay their workers higher wages. What's the mechanism by which this would work?
@KClausing, @IvanWerning, do you know any good papers about this?
Also: This paper showed that a big dividend tax cut in 2003 left corporate investment basically unchanged. eml.berkeley.edu/~yagan/Dividen…
If effects of tax cuts and tax hikes are symmetrical, wouldn't this imply that taxing buybacks and dividends would leave investment unchanged?
If effects of tax cuts and tax hikes are symmetrical, wouldn't this imply that taxing buybacks and dividends would leave investment unchanged?
Also: Is there any reason to tax buybacks specifically, rather than just raising the capital gains tax and dividend tax? I guess buybacks can function a bit like insider trading, so maybe you'd want to specifically tax them more, but is that really that big a deal?
