Assuming we have gridlock or the democrats get their way in either case we end up with marginal tax rates of about 40% that apply to dividends. This seems very likely since it is the default scenario currently in law.
So if dividend taxes essentially triple from 15% to 40% what happens to the value of ARKR which isn't great even with its current high yield in a low tax environment?
Does ACKR likely cancel the dividend because it becomes an extreme case of double taxation? Would that cause current owners who obviously seek the dividend to dump the stock?
Would ACKR instead buy back shares? Seems like that would become the better way to add value since investors could take capital gains at 20% in 2011 & beyond.
Will this cause turmoil in the share price during 2010 while the political winds shift and the debate captures everyone's ear? ARKR look like it can't handle much selling volume without a significant decline.