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Taxes on Dividends to Triple in 2013

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    Penn Financial Group CEO Matt McCall on the impact of the tax hike on dividends for investors.

  • Duration 3:53
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Taxes on stock dividends scheduled to nearly triple next year to 43 point 5% if you're invested in stock.

Dividends that paying stocks you -- -- -- up.

More money for Uncle Sam less for you here to weigh in Matt McCall president of -- financial group.

So -- I wanna get this idea because you know at the end of this year.

At the tax situation is gonna change support so many of our viewers unless something happens the bush tax cuts expire these obamacare taxes -- -- place and particularly if you hold those stocks that pay big dividends and that's a strategy for a lot of people out there.

You could really get stung what do you make of that.

Yeah I mean I've got to look at and into AJ is if this does happen to go through.

You're -- see dividend stocks really I get hit -- and that should be worth some of people owning them solely for the fact they're getting a very large dividend so suddenly you're really taking home.

60% of that you know did as being -- Allen and get a 43% or so is going to.

The government.

-- what what's the point of -- that I'd rather own a growth stock that that's not paying -- dividends.

Let me truth is that already in place it's scheduled to go in -- place a lot we'll have to be changed by a Republican congress a Republican president.

You know if there's a big turnover.

In one of the three branches of government -- sickly the senator that for the presidency eat it could be changed but may be not so.

If your strategy you're investing -- strategy is heavily dependent on this switching.

We have to watch action the stocks is what's gonna happen the market will start anticipating that that -- will really -- -- -- place and will not be repealed it would be change before it does go into law and it is suddenly started seeing some of the big dividend names out there would -- be -- some tobacco companies and utilities that pay high dividends you see -- sort of falling apart -- selling off the money coming out of it that's your first indication he's probably started getting -- -- -- as well.

We've tended to put in IRA we unite and you know paying taxes every every time that dividend comes in the problem is the value that stock's -- gonna fall regardless what happened so you gonna get paid either way.

Exactly we see a lot of dividend increases.

-- going on some -- four point two billion in the first quarter -- What's going on out there.

Well it's actually a big reason that companies are paying more dividends -- there's a lot of cash on hand we -- the know the largest companies United States -- -- largest cash so we've seen in -- in several years.

Also that's a -- is companies actually.

Going out and borrowing money is so cheap right now to borrow money and had to take a lot of cash and paying it back on dividends it actually works in their favor so we're seeing very high dividends paid out.

Pushing stocks that pay dividends do extremely well last year -- and 500 was flat.

But the portion ESP 500 -- -- -- at a high dividend -- did very well last year plus you get that dividend on top of it then.

We're seeing that not really continue as much so for the issue because we're seeing a lot of money -- -- -- the more risky trades and a lot of risky stocks don't pay dividends we'll take a look at some of the oh structure recommending that paid evidence starting with Philip Morris.

-- international large tobacco companies -- and maybe you'll probably -- -- nice dividend and what -- about this it's it's non US so now no US facets of this once great tobacco looks good and high dividend and -- Intel -- one large chip companies out there 3% dividend for a growth company and for technology company analyst when he can't lose.

Brookfield.

Where they -- Brookfield -- infrastructure so what they do they don't infrastructure imports they'll all types of stuff all around the world at large -- Australia they have one of Chicago.

-- at a very nice dividend well above the twice -- video when you're getting a ten year bond Linn Energy.

Linn Energy is a master limited partners have so what they do -- they have a lot of energy assets plus they have -- pipelines as well over 7% dividend and the stock has been out here last couple of years and -- NE TF.

I do with the iShares high dividend equity ETF so you're not pick one stop the -- more -- the world's utilities are worlds are in his basket.

Very large cap US base stocks appease a nice dividend yielding almost 4% this ETF without that company specific risks are just have to keep -- -- -- ion Washington -- you don't know what they're gonna unfortunately lot it's ridiculous are right investors out there.

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