Why Buffett doesn't pay dividend
I just got it..
Yes, Mr. Buffett, I can truly understand now why Berkshire Hathaway does not pay dividend. Never did in the past and for sure, in the future. The reason is simple: double taxation.
In December 2007, I received my dividend from one company, and after I checked them out, it was taxed heavily by 15%.. This number is bugging. The government has already taxed the company for its earning, but when the company is trying to increase the shareholder's value by paying dividend, they taxed us again.
The result is clear: lower return to the shareholder.
:-(
I certainly hope that the government does not tax on mutual fund.
But for now, my strategy is to re-invest whatsoever left in my dividend payment.. (this strategy is as the result of Jeremy Siegel's finding, that during 1801-2001 in stock investing, 80% of the value created is by doing re-invested dividend, not capital gain).
Yes, Mr. Buffett, I can truly understand now why Berkshire Hathaway does not pay dividend. Never did in the past and for sure, in the future. The reason is simple: double taxation.
In December 2007, I received my dividend from one company, and after I checked them out, it was taxed heavily by 15%.. This number is bugging. The government has already taxed the company for its earning, but when the company is trying to increase the shareholder's value by paying dividend, they taxed us again.
The result is clear: lower return to the shareholder.
:-(
I certainly hope that the government does not tax on mutual fund.
But for now, my strategy is to re-invest whatsoever left in my dividend payment.. (this strategy is as the result of Jeremy Siegel's finding, that during 1801-2001 in stock investing, 80% of the value created is by doing re-invested dividend, not capital gain).
posted by Erik at
4:46 PM
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