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I don't fully understand the specifics, I thought that dividend tax was generally 15% in the lower tax bracket, and wouldn't the $50 of non-dividend income be taxable at short term capital gains, or 40%? That means that the $100 of dividend income would be $15 in taxes vs $20 of taxes for the $50 in short term capital gains.

What am I missing?

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i'm assuming long term rate here: 15% income > $38K, 20% > $425K, which is the same as dividends; obviously, short term is way higher as you've noted.

so they'd pay half the taxes in this case - you can plug in different numbers to see a different effect, e.g. $50 purchase => $60 buyback across $1mil dollars. i probably should have done this for clarity's sake.

Thanks for the followup!

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