Wynn Resorts joins a long list of companies paying special dividends

The newest entry to a list of companies, who are paying special dividends prior to the years end, is Wynn Resorts Ltd. This dividend is going to help their investors in avoiding a huge 2013 tax bill. This move has come as the Congress is scrambling for finding a solution to prevent around USD 500-billion in the automatic tax hikes. This amount also includes the spending cuts in 2013.

As a part of what they believe is a fiscal cliff on the first day of the new year, tax rates for lower dividends, which had a couple of year’s expansion, is about to expire. In case the Congress fails in reaching an agreement, there are chances that the top dividend tax rates are going to jump from 15 percent to reach close to 39.6 percent. The rate for dividend tax was initially lowered in the Jobs Growth and Tax Relief Reconciliation Act in 2003.

Steve Wynn, who is the CEO of Wynn Resorts, based in Las Vegas, said to its investors and financial analysts, “There is no doubt to the fact that dividends can be an excellent method for savings. Thus, companies’ dividend policy gets pretty much affected by government’s tax policies.”

Wynn pointed out that in case the taxes reach its peak, then “The companies do not distribute dividend and the shareholders do not get their dividends. In such a situation, Uncle Sam does not get any dividend tax as well.”

He believed that instead of giving it in the form of dividends, the companies are going to keep their money with themselves and they are going to use the same for different other purposes.

Wynn Resorts has paid USD 8 dividend on every share. This includes the 50 cents of the quarterly amount as well. It is expected that the company will be dishing out USD 750 million in the form of the special dividend.

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