No it does not because the person who they buy the stock back from has to pay cap gains still. The wiki page even has an example of how a dividend effectively reduces the shares price whereas buybacks effectively transfer the money into the share price which raises it over time proportionally and you will have to pay cap gains on it when you do sell.
They pay the capital gain at some point, but the most wealthy tend to never sell. They tend to take loans against their assets and hold in perpetuity.
I agree that raising the value of the share leads to a deferred taxable event, just a question of whether that deferral is permanent or not.
Presumably it would be realized at some point.
There is also a compounding effect to deferring gains, which leads to higher wealth concentration. e.g. you make gains on the portion of your investment that would be taxed, because dont owe the tax until you sell.
