Would stockholders prefer to get their money through buybacks because of the more-favorable tax outcome? Sure. But that smacks of the same type of accounting chicanery that we're trying to solve.

I disagree.

The kind of chicanery that was under discussion comes from businesses incurring large liabilities in ways that they can avoid making their owners (ie shareholders) aware of, causing investors to seriously misjudge the financial outlook of their holdings. This is a cause of serious financial distortions in our markets.

By contrast using stock buybacks instead of dividends so that investors can get taxed at the lower capital gains rates rather than being taxed for income, and then incurring brokerage fees, is the game of arranging financials so that the government categorizes your spend in a way where you pay less tax. This is playing the game of the IRS in the way that Congress and special interests set it up to be played.

Both are clearly chicanery. However I believe that there is an obligation to inform owners as clearly as you can when they ask of what they really do or do not own. Conversely I do not agree with the way that public funds are levied or allocated. Therefore undermining the first bothers me, while the second (when it is done within reason) doesn't.

Cheers,
Ben