EDIV

After Congress finally approved a deal to thwart the fiscal cliff Tuesday night, investors throughout the US finally have a clear picture on the tax treatment of investments going forward. Assuming no deal was reached, the US income tax code would have reverted to pre-Bush tax cut era rates, which included higher marginal rates at all income levels, higher capital gains taxes, and dividends being treated as ordinary income. Assuming several tried-and-true dividend aristocrats are valued by many on a yield basis, equity prices for high-yielding and overvalued stocks could have suffered a substantial price decline as the after-tax yield would have been meaningfully reduced. We felt the repercussions of uncertainty in the portfolio of our Dividend Growth Newsletter. Shares … Read more