Economic
theorists warn that fiddling too much with tax policy provides
incentives for market participants to devote time and energy to
managing their tax exposure, as opposed to going about the productive
work that generates that taxable
income. The last few weeks have suggested that those theorists
are onto something, as a variety of companies make moves designed to
end-run the upcoming changes in tax policies tied to the fiscal
cliff.
Many companies, including Costco (Nasdaq:COST), have announced special dividends to be paid ahead of the year-end as a means of transferring more cash to shareholders before taxes on such distributions increase significantly. Now a host of companies are making slightly less dramatic, but still significant, changes to the timing of their dividend payments in order to avoid at least some of the effects of the fiscal cliff.
Many companies, including Costco (Nasdaq:COST), have announced special dividends to be paid ahead of the year-end as a means of transferring more cash to shareholders before taxes on such distributions increase significantly. Now a host of companies are making slightly less dramatic, but still significant, changes to the timing of their dividend payments in order to avoid at least some of the effects of the fiscal cliff.
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