Now however, when the rubber is hitting the road, the chickens coming home to roost, Sinegal and Costco are leaving the gasping public behind and covering their collective butts by playing fast and loose with the rules:
"Late last week, Sinegal and the rest of the Costco Board of Directors voted to pay shareholders a special $7 per share dividend to avoid higher dividend taxes that are scheduled to go into effect on January 1, 2013. As the Wall Street Journal notes,
That’s a $3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15%, rather than next year’s rate of up to 43.4% — an increase to 39.6% as the Bush-era rates expire plus another 3.8% from the new ObamaCare surcharge.
More striking is that Costco also announced that it will borrow $3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they’re taking on debt to do so."
So, another American Corporation goes $3.5 Billion in debt just to save themselves from the Taxman cometh.... I told you Alice would understand.....