Taxing stock buybacks at the same rate as dividends would ensure that corporations are not reducing their investment merely for tax purposes. Under my proposal, a company that wants to use its tax cuts to build a new factory could deduct the costs of the facility, but a company that wants to use its tax cuts to buy back its own stock wouldn’t get any additional tax benefit for doing so.

The conventional wisdom among corporate management and investors today is that buybacks don’t come at the expense of investment, because they return capital to shareholders to be put to better use elsewhere. This objection misses the point. When a corporation uses its profits to buy back stock, it is actively deciding that returning capital to shareholders is a better activity for business than investing in the company’s product or workforce. The tax preference for buybacks tilts the scale in this direction, creating a bias against productive investment.

We shouldn’t be surprised that an economy that encourages indefinite financialization over confidently making big bets on building the future has yielded a work life that is fractured, unstable, and low paying. To reassert the dignity of work, we need to start building an economy that invests in its workers and the things they make. Making American corporations act like the drivers of investment they once were would be a start.