Okay.. what's the chain of logic here?
> but they’re less costly from a tax perspective.
Sure.. but they also interfere with the "public ownership" ideal, which is the specific principle I was commenting about in the original.
> Are dividends also to be banned?
No.. just buybacks. I think you can still have dividends, even though there's some abstract idea that they're equivalent.
> If so, what is even the purpose of a company
The question is.. "what even is the purpose of public ownership." If you want to operate privately, I believe all of these questions become moot.
> and who would possibly invest in a it knowing that it can’t pay any returns?
The public. Which is what we want. Or, again, stay private.
Buybacks juice earnings per share. Stock valuation uses P/E ratio as an input. Meaning buybacks disproportionately benefit upper management, whose compensation is tied to the stock price. There's a principal agent problem here. Management may elect to do a buyback even if it's not in the company's best interest. Dividends don't have that problem.