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Special Dividends, LOL ! Loving it !!

by James Denison / November 26, 2012 10:23 PM PST

Walmart was the first I believe, but they've set the example and now other companies are piling into it. The plan to put a finger in Obama's eye over his plan to increase taxes on dividends is quite simple. Give them the next dividend due in January early, in this year. Then go a step further and give them a special dividend of next year's dividends and go dividend free for that year. This will put all dividend payments for next year out of Obama's reach, into this year's lower dividend tax rate.

What can happen from this? Well, it would mean even when Obama raises taxes on dividends, they won't be there to tax, and Obama's plan fails. Further, most stocks tend to drop in price following a special dividend because of it's size, and it's likely with a large number of companies doing that, the stock market will slide back down, again making Obama look even worse. Less tax revenue, a falling stock market, cut backs on full time employees to further undermine Obamacare, and Obama begins to look ever more the fool.

Four years of failure, and now it seems Obama's failures are about to escalate. Perhaps the best thing ab out his reelection is that after he's finally through as President, he'll become a curse word in most people's mouths and the electorate will decide to NEVER elect someone like him again.

Hang in there Jimmuh Carter, it won't be too many years before America has someone new to dump on, considered worse for the economy than you even were.

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And you're worried about Big Business
by JP Bill / November 26, 2012 10:36 PM PST

being able to take care of themselves?

You worry for no reason.

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So they got
by JP Bill / November 26, 2012 11:03 PM PST

Taxes on dividends from 2011 paid in Jan of 2012 AND Dividends for 2012 paid in 2012(instead of jan 2013)....MORE Dividends to pay taxes on in 2012, but at a lower rate, For some it might not be a saving.

Of course Mr Walmart has nothing to gain by moving the Pay Date of dividends.

The family of Wal-Mart founder Sam Walton owns roughly half of the shares in the world's largest retailer and probably would be among those forced to pay much higher taxes on dividends paid after Dec. 31 unless Congress takes action.

Walmart once again looking after the little guy.

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Walmart has looked after
by TONI H / November 26, 2012 11:58 PM PST
In reply to: So they got

the little guy for years........do you actually expect them to now punish the little guy because BO has decided to punish the business? Nope, they are going to do what they need to in order to survive as a business and keep the little guy working. I've told you before, businesses will do whatever they need to do in order to stay open and profitable IN SPITE of BO's regulations and new tax burdens.......BO will suffer the consequences since elections DO have them, according to his own words.

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RE: BO will suffer the consequences since elections
by JP Bill / November 27, 2012 12:05 AM PST

BO will suffer the consequences since elections DO have them, according to his own words.

4 MORE YEARS!!!!!

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And once he's gone
by TONI H / November 27, 2012 12:15 AM PST

(although you are rubbing your hands together just waiting for America to fall on its knees thanks to the prez you KNOW will do that), we will get back on our feet and fix it (we'll stay on our knees just long enough to finish thanking God he's gone for good).

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RE: we will get back on our feet and fix it
by JP Bill / November 27, 2012 12:21 AM PST
In reply to: And once he's gone

One small step for mankind, a giant leap for Toni....

YOU finally admitted it.

Obama will NOT destroy America.

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Oh, this also hurts Obama's revenue plans in other ways
by James Denison / November 27, 2012 12:58 AM PST

I'll try to explain in easy to understand terms.

You buy stock in XYZ and hold it less than a year, then sell it at a gain. This is considered short term gain and is taxed at your particular income level taxation scale. If you'd held it over a year it would be taxed at long term gain rate instead, which is separate from one's income level taxation rates. You prefer not to pay those higher taxation rates on the short term gain. You look up stocks giving out end of year special dividends, since those will only be taxed at the dividend rate. You figure your short term gain, you divide that by the special dividend amount and you purchase that number of stocks to convert your short term gains into dividend gains.

How does that work? The stock giving the special dividend, on the x-dividend date, which is the day when it sells without being eligible for the dividend, drops in price automatically at the open due to the loss of value caused by the special dividend. The specialist and market makers always do this. There is a holding time required on the stock for a person to receive dividend rates for dividends received, as I recall that's 120 days, can sell on the 121 day.

Dividend received, holding period satisfied, short term gains also still apply, but now there's the next move which levels it out, the sell on the x-dividend date or any time after. That will be a short term capital loss since the stock with the special dividend paid was dropped in price. Since you carefully measured your previous short term gain on sale of stock against the special dividend and purchased the correct amount for this financial move, and since the stock paying the special dividend drops the same amount the day it goes x-dividend, you now sell that stock which also was held less than a year and this results in a short term loss instead of a gain.

When it comes time to file, your short term gain on the first stock sale is cancelled out by the short term loss you had on the second stock purchase, and the same amount of money that originally would have owed tax at a higher rate is only taxed at a dividend rate, yielding a savings often of more than 10% that would have ended up as tax money instead of money in your pocket.

So, plenty of special dividends at the end of this year from many companies, can allow those who have short term gains to convert them to low tax rate dividends instead and even less revenue gained by Obama and his administration both in this year and in the year to come.

Ya gotta love it! Happy

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RE:STOP!!!!!...........You're going to make my head explode.
by JP Bill / November 27, 2012 2:45 AM PST

Unless that's the purpose of your post. Then keep posting.

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There was an
by TONI H / November 27, 2012 1:17 AM PST

interview on tv this morning with an economist who determined that by raising the tax rate on the higher income brackets, it would not only ONLY run the government for 8.5 DAYS, but it would take 184 YEARS to pay back what's been borrowed........and that's ONLY if that extra income was put directly into the National Debt and not spent by the Dems......and ONLY if government was reduced drastically so the annual deficit stopped increasing since all budgets normally factor in 'inflation' and 'rate of growth'.

America will be crippled pretty badly with BO as far as the economy and jobs goes (that will take years but it can be fixed and hopefully without the types of riots we see across the pond).......he is determined to destroy us.......as far as the treaties go that he plans to implement if he can get the Senate to approve them so he can ratify them, they will be harder to get out of down the road so the crippling will be more than most people are even aware of right now.

And you didn't deny that you are gleefully rubbing your hands together over those thoughts.....

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RE: And you didn't deny that you are gleefully rubbing your
by JP Bill / November 27, 2012 2:19 AM PST
In reply to: There was an
And you didn't deny that you are gleefully rubbing your hands together over those thoughts.....

IF you deny there is something wrong with " gleefully rubbing your hands together" then you are once again pointing out your hypocrisy.

Don't try and tell me you're not " gleefully rubbing your hands together".

Want to convince SE that you want Obama to succeed?

Give him an Atta' Boy, When THEY/both parties reach an agreement on the Fiscal Cliff.

There's a challenge to you....You know they WILL reach an agreement...Give Obama an Atta' Boy
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Four years or less from now
by TONI H / November 27, 2012 5:17 AM PST

I'll make you a deal........IF BO actually doesn't do anything more to damage MY country economically and IF his treaties don't damage MY country by crippling it world-wide by giving OUR rights away to the UN and unstable, dangerous countries, I will give him the 'atta boy' you are begging for.....but IF all that I predict will come to pass actually happens and things turn worse than they are for MY country, YOU will give me an apology. I don't want to hear excuses about how it's all the Republicans' fault for 'not working or compromising' with him.......HE'S the leader and if HE can't stop the division that HE created, then it's on HIM, so HE'S the one that has to learn to compromise. HE had two full years of complete Democrat control and did nothing but waste money and time with only Obamacare to show for it and spent the next two years campaigning. The ball is back in his court to make his plan to get us back to economic stability and jobs work. He gets no 'atta boy' from me until I see real growth......and that's not just this 'fiscal cliff' crap that proves nothing. The proof will be in jobs (not just government growth...private growth), the economy (that means interest rates have to start going up instead of printing money to keep our dollar devalued), energy bills start to come down, gas prices start to decline, food prices come down (people have to be in a position to afford those items), the annual deficit starts to come down and not stay at $1T+, and we stop borrowing money and increasing the national debt.

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But until the 4 years are up, no Atta' boy?
by JP Bill / November 27, 2012 5:30 AM PST

Even IF he gets agreement from "your side"...NO Atta' boy?

I'll just keep on making good news posts and you'll keep on making whining posts

4 MORE YEARS!!!!

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Nope....the 'atta boy' moment
by TONI H / November 27, 2012 6:19 AM PST

was during the 'grand bargain' and BO blew it by getting to the edge of agreement and then tacking on an additional $400B causing Boehner to walk away from the deal.

We'll see what happens over the next four years and I'll just wait for your surrender to the Conservatives til then.

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RE: I'll just wait for your surrender to the Conservatives
by JP Bill / November 27, 2012 6:43 AM PST

I'll just wait for your surrender to the Conservatives til then.

Not wait quietly, I hope.

I hope you'll still be ranting and raving like a lunatic.

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Toni, be honest. You wouldn't give him an Atta Boy if white
by Ziks511 / November 27, 2012 6:34 AM PST

doves descended on his shoulders and angels sang over his head while he walked over the Potomac without a bridge. You'd just scream, "Look, he can't even swim!!"

And how interesting that you call him "Boy". I thought that was a usage that had been tossed out with "Nigra" and similar forms of belittling speech. The Man and your President is 52 years old. Drop the racist speech pattern.

Rob

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Why didn't you admonish JP on that
by TONI H / November 27, 2012 6:47 AM PST
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But, if something good happens,
by Diana Forum moderator / December 2, 2012 10:40 AM PST

it is because of other factors, like Bush and Republicans. If something bad happens, it's Obama's fault. It is a win-win for you.

Diana

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When caring politicians
by TONI H / December 2, 2012 7:43 PM PST

try something that doesn't work, they change directions and try something else instead (example Clinton during his first four years and then swinging to the Reps' direction)....they don't spend 4 years doing one thing and when it doesn't work, stubbornly/arrogantly double down on the same strategy for the next four.

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Oh no, no, no....
by James Denison / December 2, 2012 9:18 PM PST

Obama has also done good. By threatening tax increases he's managed to get some of these rich cash cow companies to pony up on dividends they've been skimpy on in the past and now dumping cash to shareholders in large special dividends. Actually this will be great for the economy, not so for tax collection in 2013. In a way you can look at it as a successful "spread the wealth around" move. I like to think of it as "Trickle Down Economics".

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(NT) There are few economists who say anything they're paid to.
by Ziks511 / November 27, 2012 6:24 AM PST
In reply to: There was an
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Little guys don't own WalMart Preferred Shares. They used to
by Ziks511 / November 27, 2012 6:20 AM PST

own the Hardware Store and the Bath Shop and the Clothiers that used to line Main Street before WalMart moved in and took the heart out of the community. There has been much discussion about the bad effects that WalMart has had on local small businesses for more than 20 years.

Somehow, you seem to see WalMart as a benefit to the community instead of a drain which in most cases it has been.

Your concept of The Little Guy is also baffling. The Little Guy, is a guy who owns stocks!!?? What universe do you live in? You probably see Sam Walton as the little guy because he buys his clothes at WalMart. That's just an act. The question is: How big is his Corporate Jet or how many of them are there, not that he dresses badly.

Rob

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You really are out of touch
by TONI H / November 27, 2012 6:53 AM PST

there are many 'little guys' who own stocks........and get dividends, which BO wants to increase their taxes on. These are people on social security who depend on dividends (my mother was one of those who bought cd's which paid dividends and she owned a small amount of stocks) to supplement their incomes. Just because some little people are/have been/were smarter than you on managing their money as they worked in order to save for their future, doesn't make them 'rich'. I cannot believe your arrogance.

And yes.....WalMart IS a benefit to a community because most of the smaller hardware mom and pop stores that they 'replaced' would have closed down by now anyhow because they couldn't compete....not only with other small companies but also with the expansion of the internet purchasing power. Those small stores employed MAYBE three people.......WalMart in total for each store has hundreds, including some of those previous store owners now working for them in management positions because of their experience.

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I'm one of those...
by J. Vega / November 29, 2012 1:11 PM PST

I'm one of those 'little guys". I own stock for the dividends, which give me a better return on my savings than things like CDs. I don't hol ant WalMart, though, as it's dividend return is 2.24% The main one I chose to invest in yields 4.53% currently. Rob, a lot of "little guys" hold stocks for the dividends.

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Rob said
by JP Bill / November 29, 2012 1:29 PM PST
In reply to: I'm one of those...
Little guys don't own WalMart Preferred Shares.

"little guys" don't hold "Preferred Shares", WalMart or others.
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Add Costco to the list today
by James Denison / November 27, 2012 10:10 PM PST

this is great, LOL. Obama's supposed to be talking to CEO's and making some speech today. The fat's in the fire and it's Obama left sizzling. Happy

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an article about it
by James Denison / November 28, 2012 10:08 AM PST
What should be noticed is the expectation that these stock prices will drop after the special dividend is paid, which means any selling of those stocks will probably happen this year, adding to stock market stresses.

"The logic driving a spate of companies to declare
special cash dividends ahead of a possible jump in dividend tax rates in
2013 is pretty clear, and the trend has been roundly welcomed by
investors. The boards of these companies are being lauded for their
attention to investors' tax exposure, and the chase is on for the next candidates for an extraordinary payout.
Yet less discussed is the fact that many of the companies kicking
accumulated cash back to shareholders are, in effect, admitting they've
been operating with inefficient balance sheets and paying unaccountably
skimpy regular dividends up to this point...... But investors should consider whether the same traits that make a
company a strong candidate for a special dividend — management's habit
of allowing idle cash to pile up and inattention to maximizing
shareholder returns through thoughtful capital allocation — make these
stocks a less attractive buy-and-hold proposition once those dividend
checks are cashed."
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Costco CEO hypocrite
by TONI H / December 2, 2012 10:35 PM PST

He showed up at the DNC praising BO for being so favorable to companies.....talking all about how the 'rich SHOULD be paying higher taxes' then turns around and screws the BO government out of $6M by paying these dividends NOW while tax rates are still low. LOL Under current rates, his own personal dividend will be $14M....under January's rate, it would have ONLY been $8M.

Democrats just love saying that YOU should be paying more, but make sure they protect THEIR money. Ya just gotta love the logic in how businesses will always find a way to get around the increases no matter what comes down the pike, and as long as they can keep affording those accountants that small businesses can't.

It's the American way though.......even Bill Gates' father is on that Costco board and will garner his millions, too.

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Democratic motto
by James Denison / December 3, 2012 5:30 AM PST
In reply to: Costco CEO hypocrite

"We love hypocrites, especially ours".

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(NT) come on, they ALL watch out for themselves first
by Roger NC / December 3, 2012 8:52 AM PST
In reply to: Costco CEO hypocrite
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