From Atlanta Blogs News Source: http://blogs.ajc.com/atlanta-bargain-hunter/2012/12/17/wes-moss-rising-tax-rates-and-dividend-stocks/?cxntfid=blogs_atlanta_bargain_hunter
Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly. Wes Moss hosts ‘Money Matters’ Sunday mornings on AM750 and 95.5FM News/Talk WSB. I’m a big believer in income investing, a strategy that includes buying stocks that pay dividends. How will such stocks be affected if the dividend tax rate goes up in the new year? First, some history. In 2003 Congress lowered the dividend tax rate, which was supposed to be great for dividend-paying stocks. So why didn’t dividend stocks surge past everything else? Because Congress simultaneously lowered the capital gains rate, which made investing in small-caps stocks, which typically don’t pay dividends, more attractive to investors seeking capital appreciation. This, in part, lowered the demand for dividend-paying stocks, even at their new lower tax rate. This time around we could see the opposite happen. Yes, higher dividend tax rates would ?
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