Now the good news in the dividend rates is this: The talk before this weekend was that going over the fiscal cliff meant dividends would be taxed as ordinary income -- as they were under the Reagan administration's 1986 tax law.
In other words, investors were looking at a 39.6% rate or higher on dividends.
No wonder companies like Wynn Resorts (WYNN +4.96%), Las Vegas Sands (LVS +5.61%) and others declared special dividends to return cash to shareholders (often the CEO) before higher tax rates kicked in.
Didn't happen. And dividend-paying stocks will still attract investors looking for income.
For everyone else, the rate on dividends is still 15%. The bill also capped taxes on capital gains at 15% and 20% for the most affluent.
Result: Dividend-paying stocks like AT&T (T +3.83%), Merck (MRK), Washington Real Estate Investment Trust (WRT -0.46%), Edison International (EIX +1.81%) and Pfizer (PFE +3.31%) enjoyed solid gains. AT&T jumped $1.29 to $35. Coca-Cola (KO +3.72%) climbed $1.35 to $37.60.