Yes, it reduces the amount paid out to shareholders, but that doesn't mean it is bad for the economy as a whole. When corporate taxes are higher, companies spend more - wages, r&d, etc - because they'd rather do that and squeeze some value out of it then have it taxed.
There isn't a "right" answer, there are trade offs between incentives that drive the flows into different places.
This is a good counterpoint, but forcing companies’ hand with investment will at best distort the economy, and slow it down long term.
Companies are single-purpose wealth creation machines, let them find their optimal investment mix. Taxing only dividends, buybacks, and salaries will bias the taxation to mature companies that aren’t growing so fast anymore, minimizing the damage.
There's no such thing as an "undistorted economy," there is only different configurations which are more or less efficient in different areas. Taxation isn't "damage," it is the fee you pay for the stability of the system you are operating in and the services that system provides.
> Taxing only dividends, buybacks, and salaries will bias the taxation to mature companies that aren’t growing so fast anymore, minimizing the damage.
This is a reactionary policy to the existing system, not a sustainable new one. At the minimum, it incentivizes:
1. Hoarding cash
2. The acquisition of assets unrelated to the core business (real estate for example)
3. Increased corporate debt (no tax on interest payments)
4. Shifts from salary to stock options
5. Acquisitions over investments in new product lines or R&D
Functionally, you and I probably disagree on some things though - I would want to encourage companies to spend their money on salaries, pushing the money towards the broad consumer base.