The top 1% in the United States are about to get much richer because of the number of corporations that have accelerated dividend payments into 2012 so that their investors can avoid what may be higher taxes once the fiscal cliff has been reached. The dividend effect is already well calculated, but its size has not been.
According to Bloomberg:
More than 150 companies, from Costco Wholesale Corp. to Las Vegas Sands Corp. (LVS), have declared special dividends totaling about $20 billion this quarter to avoid anticipated tax increases in 2013, according to data compiled by Bloomberg. Others, including law and private-equity firms, probably will pay bonuses, partnership distributions and commissions early for tax reasons, according to Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.
“We’re going to have a big jump in household income in the fourth quarter” said Crandall, whose company is a subsidiary of ICAP Plc, the world’s largest broker of transactions between banks. “It’s going to be in excess of $50 billion.”
Douglas A. McIntyre