Dividend Tax Hike? Don't Sweat It!
By Lou Basenese:About two weeks ago, I did my best to dispel the rumors about a bubble in dividend-paying stocks. One reader wasn't buying it, though. "You totally forgot about the dividend tax hike, Lou. It's going to ruin dividend investing!"Au contraire, mon frère. I didn't forget about it. It's just that the dividend tax hike doesn't really matter when it comes to dividend stock prices. Here's why…
Higher Taxes Here We Come… or Not!
As you're probably aware, the dividend tax rate, which is currently capped at 15%, is set to expire at the end of this year. And unless Congress acts, the maximum dividend tax rate will revert to 39.6%.If we add in the 3.8% tax on investment income, which was part of the 2009 healthcare overhaul, top earners could be paying a whopping 43.4% tax on dividends. The potential impact? A 7% pre-tax yield would only yieldComplete Story »