What the US fiscal cliff deal means for global income investors

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We believe 2013 is shaping up positively for global equity income investors after the New Year's Day Tax Agreement by US politicians which partly resolved the fiscal cliff.

In November, US-listed dividend paying companies such as electricity utility Southern Company and telecommunications giant AT&T were heavily sold off as investors grew concerned that dividends would be a target for politicians looking to reduce the US fiscal deficit. A failure to resolve the fiscal cliff would have seen the current dividend tax rate of 15% rise to 43% for the highest income earners. Although most thought this would be avoided, many commentators had suggested a rise to 25% was a realistic possibility. A host of US companies accelerated their dividend payments in 2012 t...

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