SAN ANTONIO (AP) -- Direct marketer Harte-Hanks Inc. said Thursday that it was accelerating its quarterly dividend to be paid on Dec. 28, before the possible implementation of automatic tax hikes and spending cuts could cost its shareholders more.
Harte-Hanks said its quarterly dividend of 8.5 cents per share would be paid to shareholders of record as of Dec.17. The company said it was a one-time acceleration of the first-quarter dividend, which will no longer be paid.
Harte-Hanks is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January, after the government goes over the so-called "fiscal cliff."
Many companies are reviewing their dividend policies now that it appears investors could soon pay higher taxes. 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.
Harte-Hanks shares fell a penny in midday trading to $5.44. That is on the low end of a 52-week trading range between $5.18 and $10.24.