Caterpillar moves up quarterly dividend to Dec.

Caterpillar paying quarterly dividend early, in December, as higher taxes loom next year

Associated Press

PEORIA, Ill. (AP) -- Caterpillar Inc. on Wednesday said it would pay its 52-cent quarterly dividend early, in December, as potential tax increases loom next year.

Caterpillar typically pays its fiscal first-quarter dividend in February. This year, it's paying it on Dec. 31.

Peoria, Ill.-based Caterpillar is the latest company to move up its quarterly payout or issue a special end-of-year payment to shield investors from potentially having to pay higher taxes on dividend income starting in January.

Since 2003, investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending.

As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

Caterpillar shares rose $1.03, or 1.2 percent, to $88.36 in midday trading.

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