Among other things, the
promises to raise taxes on dividend income. And that's prompting
some companies to pay their dividends before the cliff hits.
Several major companies, most notably
are issuing earlier-than-usual dividends to avoid the tax bump
that will be levied should Obama's Budget Control Act - a.k.a.
the "fiscal cliff" - go into effect as planned on January 1.
Right now, income earned through dividends is taxed no higher
than 15%. That rate could rise to as much as 39.6% if Congress
does nothing to stop the fiscal cliff.
To prevent shareholders from jumping ship, some companies are
issuing special dividends before the end of the year. According
Wall Street Journal
), Las Vegas Sands (
Ethan Allen interiors (
are among the companies that are offering special, one-time
dividends by year's end - before the fiscal cliff could take
Las Vegas Sands' special dividend will be $2.75 a share.
Dillard's dividend is a whopping $5 a share.
And though Wal-Mart isn't issuing a special dividend, it
bumped up the date of its fourth-quarter dividend payment from
January 2, 2013 to December 27, 2012 - thus avoiding any higher
Other companies joining the special/early dividend fray
Announced a special dividend of $4.50 a share, payable December
Wynn Resorts (NASDAQ:
Paid an $8-per-share dividend last Tuesday, which included the
stock's regular quarterly payout of 50 cents a share.
Gyrodyne Company of America (NASDAQ:
I've never heard of this company, but whoever they are, they
issued a mind-boggling $38.30 special dividend. That'll grab
So at least that's one good thing the impending doom of the
fiscal cliff has brought. For some income investors, it's
Christmas come early.
If Congress doesn't get its act together soon, however, those
early dividend gifts may eventually turn into a lump of coal.