How to Take Advantage of Special Year-End Dividend Payments

With the year soon coming to a close, an increasing number of firms are making special dividend payments to get ahead of the expected hike in taxes next year. This investment strategy to make special one-time dividend payments is a direct result of the inability of our political leaders to come up with long-term solutions for our tax policies. One of the biggest problems when devising an investment strategy is dealing with uncertainty regarding taxes and regulation. How can a person or company develop an investment strategy—whether it’s regarding dividend payments or capital allocation to plant and equipment—if we don’t know what the tax rates will be over the next few years? Short-term changes that are temporary in nature do not have the same effect as permanent, structural changes to the system. People are smart enough to realize that a temporary tax adjustment is just that, te...