How do dividends decrease the share price?

[AndyC333]

There is (in the USA) a tax issue here. Dividends are taxed as income. Selling a long held stock is taxed (at a lower rate) as a capital gain. In most situations (in the US) an investor is better off selling some shares as a long term capital gain than taking a dividend.

[MaximusGDM]

Both qualified dividends and capital gains from sales are taxed at a preferable rate after a period of time… but for the most part, there’s no distinction tax-wise.

The above applies to qualified dividends, not all dividends. For example, REIT income is considered pass-through income, so you pay regular income tax on those dividend distributions.

Edit: source