Dividends are taxed as income in the hands of investors, potentially attracting rates as high as 36% for some taxpayers. By contrast, gains from shares sold in the market are subject to capital gains tax rates of 12.5% for long-term holdings and 20% for short-term holdings.
Deepak Shenoy advocates for cash-rich companies to consider share buybacks due to significant tax advantages for investors. Dividends are taxed as high as 36% for some, while capital gains from selling shares face lower rates of 12.5% for long-term and 20% for short-term…
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