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Espey declares special dividend

The Associated Press

Espey Mfg. & Electronics Corp. on Monday declared a special dividend of $1 per share.

The military and industrial electronics equipment company will pay the dividend on Dec. 20 to shareholders of record as of Dec. 13. That is in addition to its regular quarterly dividend, which was increased from 22.5 cents per share to 25 cents per share.

Espey joins an increasing number of companies that have moved up quarterly payouts or issued a special end-of-year payment to protect 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 could 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.

Shares of Espey rose 34 cents to close at $27.20.