comment: >
  
  I guess.  I just see nothing wrong with buybacks.  Zero.
  It encourages investment, and better run companies.
context: I’ve always considered stock buybacks to be a mechanism for extinguishing excess capital. Every company should have a capital allocation prioritization for what to do with excess cash. Reinvesting in the business via capital expenditures that return value, dividends, and stock buybacks are all options, each with risks and consequences. >
  
  They weren't illegal before hand.
  The law wasn't clear if they were a form of stock price manipulation.  So most companies stayed away from it, but they still happened.
  The sec simply clarified when it is perfectly legal.
  It's should be no more or less illegal, than issuing more stock to raise capital...
  If they no longer have the need for the capital, they should buy the shares back to gain more control of their company. >
  
  Tax stock buybacks the same as corporate profits. >
  
  It's not a profit. You could apply a special sales tax to buybacks. >
  
  You realize they are taxed right now at the same rate as any stock sale.
  You dont tax the stock sale, you tax the stock sale's profit.
  If I invest 100k in a stock, and they offer me 110k to buy it back, I pay taxes on the 10k.
  I didn't pay taxes when I bought the 100k worth of shares, and the company shouldn't pay taxes when they buy the 110k >
  
  We're missing each other's points because of reddit. The guy above me wanted to tax buybacks as profits which doesn't make sense - i was suggesting that what he's really asking for is to apply a tax to the buyback.
  I understand that this is not currently the way the code is written, but it could be done if the policy goal is to discourage buybacks. You could write it so it only applies to original issuers of the shares so it doesnt have implications for private citizens.