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Date: January 14, 2003
Gregory Friedman, Greycourt’s Chief Investment Officer, talks about the implications of the proposed cut in dividend taxes in the upcoming January 20, 2003 issue of BusinessWeek in the
cover story titled “How to Play the Dividend Cut.”
Mr. Friedman observes that “with no tax on dividends, the large caps' returns will be nearly equal that of small caps'. Given the added risk of smaller companies, their appeal will be
diminished.”
To view the full article, please click on the following link: http://www.businessweek.com/magazine/content/03_03/b3816017.htm
Mr. Friedman recently wrote a white paper on the elimination of the dividend tax titled “The Tax on Dividends: Speculations On How Taxation Changes Might Affect Investor Strategies,” a
summary of which follows. To view the full paper, please click on the links at the bottom.
Speculation has heightened that the Bush administration will seek to reduce or eliminate the double taxation of dividends paid on corporate stocks. While the form and substance of such a
policy are yet unclear it would, if enacted, impact private client portfolios in several significant ways. Most obviously, reducing or eliminating the taxes levied on dividends would improve equities’ after-tax
total returns relative to other non-affected asset classes such as bonds or alternative assets. In this paper we will initially seek to illustrate how a typical investor’s recommended asset allocation might change
if the elimination of taxes on dividends were to become a reality. Second, it is likely that such a tax law change would indirectly impact other asset classes and alter the behavior of corporate management.
Please click on one of the links below to view Greycourt's White Paper # 30: "The Tax on Dividends: Speculations On How Taxation Changes Might Affect Investor Strategies."
http://www.greycourt.com/whitepapers/whitepaper030.pdf
(Printable Adobe Acrobat Version)
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