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The Pru said that it would abandon its policy of increasing dividends above inflation.
But annual dividends above that amount remained fully taxable at ordinary income tax rates, which ranged up to 91 percent.
Companies paying dividends above 5% will have to explain how that benefits customers in addition to investors.
The bill that came out of the Finance Committee would exclude from taxes each year the first $500 in dividends an investor receives and exclude part of dividends above $500 -- 10 percent through 2007 and 20percentthereafterer.
That's almost half the long-run real return on stocks: Since 1926 stocks have returned 7% a year in capital gains and dividends, above and beyond inflation.
Meanwhile, the deal contains a major giveaway to Wall Street, which won a 20percentt rate on dividends above $400,000 ,a rate that otherwise would've risen to the Clinton-era rate of 39.6.
Similar(54)
The citizen's dividend mentioned above could be supplemented by an economy-wide cap on greenhouse gas emissions that sends revenues from GHG permit sales to Americans.
"Given the very low interest rates on money markets now, it may be that the stock you're acquiring has a dividend above what your money market pays," he said.
Put the number of times the divisor goes into the first digit (or digits) of the dividend above the appropriate digit(s).
If you are in a high income tax bracket, have minimal short- or intermediate-term income needs, and have high risk tolerance, select mostly growth stocks that pay little or no dividends but have above-average expected growth rates.
The old paradigm dictated that stocks were a buy when P/E ratios were 13 or less (and many are well above that), dividends at 4%, and book values at 1.3 or less.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com