The Perfect Dividend: perfect fairness in hypocrisy

‘When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The #Costco co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte. So what a surprise this week to see that Mr. Sinegal and the rest of the Costco board voted to give themselves a special dividend to avoid Mr. Obama's looming tax increase. Is this what the President means by "tax fairness"?

Specifically, the giant retailer announced Wednesday that the company will pay a special dividend of $7 a share this month. That's a $3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15%, rather than next year's rate of up to 43.4%—an increase to 39.6% as the Bush-era rates expire plus another 3.8% from the new ObamaCare surcharge.

More striking is that Costco also announced that it will borrow $3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they're taking on debt to do so.’ - WSJ, Costco's Dividend Tax Epiphany, updated 11/30/2012

Link to the entire article:

http://online.wsj.com/article/SB10001424127887324705104578149012514177372.html?mod=WSJ_Opinion_LEADTop

　

The 2013 Tax Cliff

What is meant by the 2013 “tax cliff” being formed by the Obama Administration? (1) (2) In 2013 you would have the following recipe for a tax cliff:

(1) Bush era reduced tax rates expire,

(2) temporary tax holiday regarding payroll tax expire,

(3) proposed increase in marginal tax rates proposed in the so called “Obama Jobs Plan” come into effect,

(4) the laundry list of tax increases associated with ObamaCare come into effect.

Notes:

(1) http://www.naturalnews.com/news_000615_Heading_towards_2013_tax_cliff.html

(2) http://online.wsjWSJ_hp_mostpop_read