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View Diary: Dividends, Tax Cuts, and the Fear/Disinformation game (10 comments)

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  •  Great diary. Most middle class people only ever (2+ / 0-)
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    peace voter, CalifSherry

    get maybe <$100 in dividends every year, if that.  Only rich scions need to worry about a dividend tax hike. Most stockholders care about the stock valuation far more than they do the dividends. This is a nonsensical talking point by the right.

    •  Only the rich care? (0+ / 0-)

      "Most stockholders care about the stock valuation far more than they do the dividends."  ...if that is right, then consider the following.

      Stock values are substantially driven by the value of the dividends they pay.  With increased taxed on dividends that value will drop, and the value of stocks will drop.

      I have an IRA, some retirement plan value, a life insurance policy, etc. each has underlying stock that will fall if this tax is imposed.  I worked hard for that value it will be harmed.  I am not rich, and I care.

      Second point.  For the many many retired people just making ends meet.  Their savings will be damaged just like mine. Even if they are in the lowest tax brackets. But what about those dividends that you say they don't care about? Businesses will react by reducing dividends if dividends become disadvantaged relative to capital gains.  They will simply retain the cash, use some to repurchase stock, both actions will push up the value of the company and more efficiently transfer value to owners.  Retirees, will have to sell shares to make up for the loss in dividends.  This is riskier... Not really fair to our seniors. They are not rich, and they care.

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