Washington Post To Pay Dividends Early Due To Anticipated Tax Increases
The Washington Post Company announced yesterday that it will be paying its 2013 dividend in 2012, a move that will allow shareholders to avoid any increase in the capital gains dividend tax rate that may occur after December 31st:
WASHINGTON (AP) — The Washington Post Co. will pay its 2013 dividends before the end of this year to try to spare investors from anticipated tax increases.
The media and education company said Friday that its dividend of $9.80 per share is payable Dec. 27 to shareholders of record as of Dec. 17. The payout is instead of regular quarterly dividends next year.
Washington Post is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
As noted, many companies have made this move recently, and one can be assured that there’s other income-shifting going on as well.
Definitely. Politics has real world consequences.
Here are some other amazing cause-and-effect ironies related to this year’s election cycle, but which for obvious reasons won’t receive too much attention from the media-academe cabal:
– Companies in droves are shifting vast numbers of employees from full-time to part-time. So they don’t have to provide them with health insurance benefits. So they don’t get killed by the extra costs of Obamacare. Meaning that tons of people out there will earn less money, and have worse benefits packages, literally because of Obamacare.
– Companies with just over 50 employees are firing people nearly indiscriminately, so they don’t fall from the get-go within Obamacare’s purview.
– Companies with just under 50 employees are about as likely to hire net new workers as Todd Akin is likely to be named the head of Emily’s List.
If you’ve got around 45 employees, and even if business somehow is booming, you won’t be adding anybody. Not unless you subtract elsewhere. People who own and run businesses are not that dumb.
– Back to the tax front, a lot of wealthy people are moving their capital offshore. Or moving themselves and their entire operations offshore and becoming ex-pats. The Rolling Stones, Tom Jones, and all those other European tax exiles, soon will have plenty of company.
This means wapo can’t find anything better to do with the money. A good trend would be for the monied multinationals to view Dec 31 as a deadline for profit repatriation without penalty but perhaps repatriation is not the right description for the stateless multinats bringing money into the US, and heaven forfend they pay tax.
(Doug, ITYM to type “increase in the dividend tax rate” vs capital gains.)
Now, remember, despite appearances, this is not a corporation looking to avoid the consequences of the policies they backed. This is not a corporation doing all it can to avoid paying its “fair share” in taxes. This is… something else, and something not-bad, and not-hypocritical. So shut up.
@Tsar Nicholas: So… You agree we should just all go with the Public option. Right?
This could also be related to the December 21, 2012 thing. Sorry, after that money won’t be good any more: post apocalyptic life will not require money, but survival skills. Watch these movies: “Doomsday”, “Water world”, “Mad Max”, “Silent Hill”, and “Watchmen”. And has anyone else noticed the morose and downcast mood that both Obama and Boehner have been in lately?
They know something is going to happen.