Mark Cuban says a tax on stock buybacks 'is a good idea' as repurchases reward investors for selling a company's shares

• Mark Cuban believes that a provision of the Democrats' spending bill taxing buy backs is a good idea.
• The billionaire investor told Squawk Box that buybacks are no longer as tax rewarding as in the past.

Mark Cuban thinks that a provision in the Democrats' spending bill that would tax stock buybacks is a good idea, as repurchases of stocks essentially reward investors for walking away from the stock.

Buybacks, Cuban told CNBC's Squawk Box, act as a reward for "leaving and selling your stock instead of rewarding the people who are keeping your stock." He added that buybacks no longer provide the tax advantages they once did, and that companies have to decide between re-purchasing incentives and paying dividends, the latter he said was the way to reward holders of the stock.

"No one's a fan of more taxes. But of all the taxes you're trying to create, a tax on buybacks is a good idea," Cuban said.

Democrats added a new provision Wednesday to their tax and spending bill that calls for a 1% excise tax on stock buybacks, which is intended to help raise money for government climate spending and healthcare. The legislation would target public companies specifically, and faces a vote in the House of Representatives at the end of the week.

Certain buybacks aren't targeted under the provision, including repurchases under $1 million per year or those tied to reorganizations and employee benefits.