The combination of a possible hike in the federal tax ondividends and the boatloads of cash held by corporations is leadingto a proliferation in one-time special dividends being paid toinvestors, Businessweek reports.
Currently, individuals are taxed just 15% on dividend paymentsbut if tax cuts put in place under George W. Bush expire at thestart of next year, that rate could rise to more than 43%. So asyear-end approaches, companies are responding with special dividendpayments. The story notes that companies made similar payments inthe fourth quarter of 2010, when there were also concerns that theBush tax cuts might expire.
See the full story here. For previous coverage, see Tax Hike Could Discourage Dividend Revival.
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