In addition to comprising a large allocation of both the Tactical ETF Portfolio and the Sizemore Investment Letter Portfolio, we created a new model to focus specifically on dividends and dividend growth: the Covestor Sizemore Capital Dividend Growth Model .
Goldman Sachs directly decided it would find more profitable ways to deploy its excess capital than dividend hikes, one of which included buying back its shares owned by the Oracle of Omaha, Warren Buffett.
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First, the continuation of low dividend and capital gains taxes that had investors flocking in the high-dividend paying stocks and hot technology stocks, as an alternative to near zero money market and CD rates.
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How can this impact capital spending, dividend payout ratios, financial engineering deals and share buybacks?
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Capital gains and dividend taxes are likely going up considerably in 2013 for people who have higher incomes.
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Rather, the share price of Dividend Capital is set by a calculation of asset value that is recalculated daily.
In addition, investors with higher income will be subject to a 3.8% Medicare tax on capital gains and dividend income.
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We expect final passage in March, extending to 2010 the 2008 expiration of the capital gains and dividend tax rates.
It is important to understand the role of capital gains and dividend taxes and their significance in the U.S. economy.
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This impact would be amplified if lawmakers fail to maintain the current parity between the tax treatment of capital gains and dividend income.
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The Bush tax cuts are expiring this year, creating the possibility that capital gains, dividend and estate taxes will revert back to circa-2002 levels.
Federal capital gains and dividend tax rates are at historic lows.
Attractive capital gains or dividend tax rates save cash today but there is always a bill to be paid when we want our investment money back.
But the lower capital gains and dividend rate don't expire until Dec. 31, 2008 and Silverblatt doubts Congress' failure to act this year would have much effect.
Since future earnings growth will be the primary driver of future capital appreciation and dividend income, it logically follows that forecasting future growth is the key to future investment success.
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The reason for the light capital gains and dividend tax is that corporations pay up to a 35% tax on their profits before a dime of it is passed on to shareholders.
While all taxpayers would enjoy the benefits of lower income tax rates, higher income folks are more likely to reap the rewards from an extension of the current capital gains and dividend rates.
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Hopefully, tax incentives, an AMT fix, extended unemployment insurance and a continuation individual income, capital gains and dividend tax rates from the last decade will stoke economic growth during the next two years.
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Since the Bush tax cuts of 2003 reduced both the capital gains and dividend rates to 15%, the top 400 have been paying an effective income tax rate of only around 18% of AGI.
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But a continued slowing of the economy, while probably not as fatal for the BDCs as the depths of the 2008-09 crisis, would certainly lead to capital losses offsetting dividend yields, themselves likely to be cut.
If economic growth does in fact come, say in 2013, as Obama presumably believes it will, there had better not still be top income tax rates of 35% and capital gains and dividend rates of 15%.
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Such income is taxed once at the corporate rate of 35% and again when it is passed through to the individual as a capital gain or dividend at 15%, for a highest marginal tax rate of about 44.75%.
Brian Mattes, principal and director of government relations at Vanguard, says members of Congress are getting plenty of letters expressing concern about the size of the federal deficit, but no requests to take action on capital gains or dividend taxes.
Of course, Fix The Debt while rejecting the idea of returning the tax rates for the upper 2 percent of Americans to the progressive rates of the Clinton era, thereby severely impacting on their personal capital gains and dividend income does appear prepared to support a proposal that would limit deductions as a way to raise revenue.
Bond ETFs pay out interest through a monthly dividend, while any capital gains are paid out through an annual dividend.
That casts some uncertainty over whether GE Capital can pay a dividend to its parent company.
Increases in dividend and capital gains taxes, however, are virtually inevitable in about six weeks.
Should the U.S. fail to reach a solution, federal income, dividend and capital-gains tax rates increase Jan 1.
Obama's proposal to raise dividend and capital gains taxes would be widely felt.
Know what you are investing for, whether it is the dividend or capital growth, and then apply pertinent information.
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