The Fiscal Cliff Deal is Great News For Dividend Stocks

I wish I had a nickel for every scary story I read about dividend stocks and the fiscal cliff over the last four months. I heard so many, I could probably take the rest of the year off. Of course, a funny thing happened on the way to this great apocalypse: dividend stocks are not only alive and well, but stronger than ever.

With a deal in place, dividends will be taxed as favorably for investors as capital gains. For lower income folks, qualified dividends continue to be taxed at 15%. It only changes for investors who have met the government's latest definition of "rich." That means the relative advantage of qualified dividends over interest income will be preserved, along with the parity between dividend and capital gains tax rates. So for most dividend investors, very little about their investments has changed.

Source: Money Morning

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