No, that's just a theoretical understanding. In practice corporations buy back their shares with the money that could've been spent on dividends (which would be taxed). So it's just a tax-avoidance game.
You don't know what's their real base for taxation, so you don't know how much % they really pay.
Here, straight from the horse's mouth :) :
https://www.youtube.com/watch?v=4RAu2MvLbDk
And when the shares are sold, it's taxed as capital gains. You can't eat share price appreciation.
On a non-taxation note, buybacks have increasingly become a tool to artificially drive stock price in recent years. Its actually been pretty negative.
Debt levels in corps are increasingly higher, using leverage to buy back stock, then you have those same companies sucking on the corporate welfare stream from the fed. Its referred too as a financial engineering tool at this point by the c-suite. The time you are referring to where it was more positive than just a tool to drive price artificially higher is prior to the SEC changing the rules in 1982. Artificially pumping the share price when the company isn't actually doing any better, and now were at what, a PE Ratio of >35 and since that rule change in 1982 prices per share is 6x for the same profits back then.
Then you have companies spending more on buybacks rather than R&D or actual dividends because it pumps stock prices and with the huge increase to C-Suite compensation tied to stock price its incentivised and its not sustainable, enter corporate welfare.
Stock buybacks need to get regulated again by the SEC like they were prior to 1982, were not seeing healthy, sustainable buybacks.
"Income is still being taxed twice, once at the corporate level and once at the point of distribution or sale."
I am sure the states are similar as Canada, you make it sound as if its taxed at more because it gets taxed twice, but that's not true, at-least not in Canada. The tax concept integration works, for the most part The idea being that there should be little to no difference in overall income tax paid, personal + corporate compared to just earning it personally. I won't go through all the tax rates, federal abatements, provincial abatements, dividend tax credits, etc. but you get the point. Its taxed twice, yes but the net is the same and usually lower than if you just paid it personally since the huge benefit is obviously tax deferral.
It depends on the company. If you take a dividend payer like MO, they pay a higher yield in dividends than they pay on debt. It would be fiscally irresponsible to retire debt in lieu of buying back shares. The big tech stocks buy back shares in part to prevent share dilution as a result of stock based compensation. There's also irresponsible buybacks, and there's irresponsible dividend payers (see Bell on the TSX), but the market will punish them over the long haul, there's no need to regulate away their decision making.