Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Kip S who wrote (33280)

12/14/2020 4:18:08 PM

From: the traveler

4 Recommendations

Recommended By
burlegoat
E_K_S
JSB
maverick61

Respond to of 34328

"Criticism is something we can avoid easily -- by saying nothing, doing nothing, and being nothing."

Aristotle (384-322) BC

To: Kip S who wrote (33280)	12/14/2020 4:45:32 PM
From: E_K_S	Read Replies (1) \| Respond to of 34328

dividends have been taxed as ordinary income for a large part of our history Yes, in 70's & 80's prior to the Reagan Tax Cuts of 1981 marginal rates were as high as 70%. My real earning carrier started in 1981 so I never experienced those super high marginal rates. A very good point to look back (40 years) and perhaps the pendulum is swinging back the other way. Buffet (as well as his private investments) never paid out dividends but rather invested that income back into the business. Currently dividends are taxed twice, paid by the corporation and then paid by the individual. Maybe there may/could be a shift in company's thinking to invest retained earnings into new capital assets rather than pay out as dividends. Capital assets can be depreciated and in most cases increase the FCF of the company and/or increase the BV. REITs and MLPs have a different way of recording income to shareholders (one issues a K1 and the other a normal 1099) but BOTH have special provisions on how/what is reported as income. REITs must payout a certain percentage of their income to shareholders where MLPs can shelter certain types of income streams. The takeaway is both of these types of company structures resulted because of what investors wanted and/or tax policies created. Mutual Funds may be the first to move to create funds that are 'tax' efficient. I will be looking at my Vanguard Funds this next year to see if they offer/change one or more of their funds. EKS