Corporations Paying Out Big Dividends Before 2013

Obama's dividend tax increase is going to hit a lot of middle and lower income retirees hard.

Companies are racing the clock to hand out billions in special dividends before year end—and some of them are taking on debt to do it.

The latest is Costco which announced a $7-a-share payout to stockholders Wednesday and is issuing bonds to pay for the $3 billion dividend.

Fearing a tripling of dividend tax rates next year, companies have found one-time payouts and early payments of quarterly dividends as a way to beat some of the impact of the "Fiscal Cliff."

Taking advantage of super-low interest rates, companies have been issuing debt at a record rate this month. Some say they plan to use the proceeds to fund dividends and share repurchases.

“I think what you’re seeing is a reaction to the lack of clarity around the tax laws, and that’s what Treasurers and CFOs are doing,” said Joel Levington, managing director of corporate credit at Brookfield Investment Management.

http://www.cnbc.com/id/49993082

 

They already know the conclusion to the fiscal cliff negotiations.

 

"Obama's dividend tax increase is going to hit a lot of middle and lower income retirees hard."


LOL! Lower income people do not derive any meaningful income from stocks.


From an old article that I can easily remember just to point out the idiocy above:

Rich are big winners under Bush tax cuts

During last week's debate on whether to restore limits on the alternative minimum tax or make permanent the cuts in investment income taxes, House leaders chose as their spokesman Representative Dave Camp, a Republican from Michigan. He said Republicans favor continuing investment tax cuts because that will help more people and will especially benefit those making less than $100,000.

"Nearly 60 percent of the taxpayers with incomes less than $100,000 had income from capital gains and dividends," he said on the House floor.

But IRS data show that among the 90 percent of all U.S. taxpayers who made less than $100,000, dividend tax reductions benefited just one in seven and capital gains reductions one in 20.


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In Republican Land, one in 20 = 60%.

 

I guess you would know that as you are one of the lower-income people.

 

It's called common sense or just a basic economic reality. Why does the republican mind not understand basic reality?

 

I agree with Covert, it is common sense to pay out dividends prior to January 1. No big deal.

AAPL should pay out $200 in dividends now, and then split the stock to $60 or so. I doubt they will, but it would be a good move.

So much confusion about capital gains, and yes, it will cost me a bunch. I have had to do some personal planning this year to save money.

The idea of a Fiscal Cliff is crazy though. We go back to a nominal tax rate, and cut some spending, big deal

The foolish argument that 'I already paid taxes on the money, why should I pay again when I invest?' If you make $200K, pay taxes Take some of that money and buy a house, and sell it for a profit, why not pay taxes on that? There is no FICA or anything?

Need to get some real accountants involved, get rid of the Politicos.