President Bush's Tax Cut Paying Dividends On Wall Street

by Mike Godfrey, Tax-News.com, Washington

13 February 2004

Since President Bush won his hard fought campaign to slash the tax rate on dividend income to 15% last year, reports show that a significant number of firms have both increased their dividend payouts and issued ‘special’ one-off payments to shareholders in recent months.

According to Standard & Poor’s, a total of 229 companies increased their dividends last year by an average of 26%. Of these, 14 firms actually doubled their dividend payouts, and 33 companies increased their dividends on more than one occasion.

According to the Wall Street Journal, around eleven firms have issued special dividends in the last few months. A good example is that of California-based research firm Barra Inc, whose board of directors declared a special cash dividend of $1.00 per common share in January, amounting to a handout of approximately $19.5 million.

Whilst special dividends have largely been restricted to small and mid-sized firms, some analysts are also predicting that software giant Microsoft is preparing to distribute some of its large cash reserves in the form of a dividend payout in the months ahead.

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