The potential middle ground: Dividend tax rates will increase at year-end unless lawmakers reach a deal.
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Mandatories generally pay better than regular preferreds, but are not eligible for favorable dividend tax treatment.
The tripling of the dividend tax will have a dampening effect on these payments.
Historical experience indicates that corporate dividend payouts are highly sensitive to the dividend tax.
The last time dividend tax rates were increased was 1993, under the Clinton administration.
The reforms, lowering that dividend tax rate to individuals to 15%, went some way to changing this.
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The biggest moneyspinner by far has been the abolition of the dividend tax-credit for pension schemes in his first budget.
They have tied themselves in knots over the Bush dividend tax break and must be in terrible pain.
When there is a large spread between dividend tax rates and capital gains rates, dividends just waste money.
Dividend tax hike or no dividend tax hike, the demographic-driven demand for income is not likely to change.
There may be an extra 3% dividend tax to be paid by companies.
We support efforts by some in Congress to extend the current 15% dividend tax rate to 2011 and beyond.
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In a nutshell, the benefit is derived from getting dividend tax treatment for what would otherwise be ordinary income.
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And that is even before considering the possibility of higher dividend tax rates.
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Capital gains tax rates and dividend tax rates stay low for most taxpayers.
We expect final passage in March, extending to 2010 the 2008 expiration of the capital gains and dividend tax rates.
Boosting the group of late: smart phone growth, an extension on dividend tax rates and a compromise on net neutraility.
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Dividends fell out of favor in the 1990s when the dividend tax rate was roughly twice the rate of capital gains.
It would also raise the capital gains tax from 15% to 20%, and the dividend tax from 15% to almost 40%.
Those seeking tax-sheltered returns can do better, at least until 2011, by buying preferred stocks eligible for the 15% dividend tax rate.
Dividend tax rates are especially important to many companies that pay big dividends, such as utilities, resource companies and some tech companies.
Then, Mr Brown abolished the dividend tax credit enjoyed by pension funds.
More is expected to clear in December as issuers cast a wary eye on potential increases in dividend tax rates starting in 2013.
So given the dividend tax news, I recently screened for high-dividend plays that also get approval from one or more of my models.
And because dividend income will again be taxed as ordinary income starting in 2013, the dividend tax goes to 44.5% from 15% today.
Even if we hike dividend tax rates to ordinary income rates, some high dividend stocks will still be attractive compared to their bonds.
Kerry would also punish risk-takers by increasing the capital gains levy and would reduce the supply of capital by rescinding President Bush's dividend tax reductions.
The dividend tax, recently cut to 15%, would be abolished altogether.
Federal capital gains and dividend tax rates are at historic lows.
One area with greater potential to impact portfolios is the fate of the qualified dividend tax rate, scheduled to increase from 15% to ordinary income.
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