Stock Buybacks vs Dividends

Putting profits into stock buy backs instead of dividends still returns money to share holders (through the retiring of shares bought back.) It’s generally preferred since it allows shareholders to postpone (perhaps indefinitely) paying tax on the money returned. Good for shareholders but bad for society.

Stock buybacks are economically equivalent to paying dividends, but they’re less costly from a tax perspective. Are dividends also to be banned? If so, what is even the purpose of a company, and who would possibly invest in a it knowing that it can’t pay any returns?

Why would you ever pay a dividend when a stock buyback is more tax efficient for US investors?

If stock buybacks are more tax-efficient, why are dividends better?

Companies should be returning dividends to owners. Buybacks are a workaround for bizarre tax laws that favor speculation (profit from dumping) over investment (profit from holding).

Dividends aren't strictly necessary - stock buybacks have the same effect of returning money to those who want it, while being superior (in terms of taxes) for those who would just reinvest dividends anyway.

Many companies still pay dividends as well. But, yes, functionally both dividends and stock buybacks return money to shareholders, i.e. the owners of the company. However, as you say, in the US the tax code tends to favor capital gains over dividends.

Share buy backs are equivalent to dividends, modulo taxes and accounting.

Many companies which don't pay dividends still do periodic share buybacks. Investors like this because dividends are taxed at distribution.

You forgot about stock buybacks. Which have a similar effect as dividends with favorable tax treatment.