I think we should at least acknowledge that share dilution is a fact of life in our current system, and a needed tool for many companies. Most high growth companies would be f*cked without it.
The whole idea behind venture capital investment with multiple rounds is share dilution; each round of VC investment dilutes the previous shareholders. The whole idea behind a public offering (IPO) is share dilution; early investors are being diluted, they are not cashing out to dump their shares on the public.
Shares are commonly diluted to pay executives stock options or do acquisitions of other companies. Ever watch Shark Tank? That's share dilution; the original business owners are being diluted to bring in new investors and capital.
Look up "shares outstanding" charts, it's not a stable thing.
No one should invest in a company that considers taxing the shareholders to cover expenses part of its long term business plan.
If by "taxing shareholders" you mean share dilution than this is horrible advice. (debatable if you are talking about some theoretical extremely long term)
Being philosophically opposed to share dilution would preclude you being an early investor in:
Facebook, Twitter, Google, Amazon, Berkshire Hathaway, Ebay etc.
BTW none of these companies have ever paid a dividend.
When was the last time Apple or Coca-Cola diluted their shares? AFAIK they only paid dividends and do buybacks out of their income...
Apple was diluting shareholders as recently as mid 2012 after which they became so cash flush that they issued their first dividend in over 15 years and started buying back shares.
http://ycharts.com/companies/AAPL/shares_outstandingCoca-Cola is not exactly analogous to our high growth DACs and I think a well established DAC could pay dividends. However, I'm sure Coke diluted shareholders at some point in their company history.
Coca-Cola currently spends $4.8 billion per year buying back stock, and $1.3 billion per year issuing stock as compensation. The total dilution for shareholders due to issuing stock would amount to 0.7% per year (they are not diluted because of the buy back)