This is only true of dividends. But I don't think it wasn't true of stock buybacks.
Also there is plenty of business income that is not double taxed because it isn't run through a C Corp.
Then in regards to incentives. We already have interest rates to adjust the knobs of investment versus consumption. Capital gains is just a way to make the tax system less progressive.
Stock buybacks come from profits which are taxed, and those who sell the shares back to the company also have to pay capital gains tax. And S corp income is taxed at personal income rates, not capital gains rates (except for some ridiculous 20% rebates in some situations in the new tax law (but is still higher than capital gains)).
Also there is plenty of business income that is not double taxed because it isn't run through a C Corp.
Then in regards to incentives. We already have interest rates to adjust the knobs of investment versus consumption. Capital gains is just a way to make the tax system less progressive.