Intel Corp (INTC)

[wbmw]

If the changes to the dividend tax goes into effect, how do you think that will affect Warren Buffett's exposure to INTC?

Remember, this guy allocates his capital for maximum ROI just like anyone else. That includes tax-free muni bonds and investment in industries that will likely gain huge benefits from tax and public policy changes.

The system is complex, and with any change there are winners and losers. If you didn't come out ahead at the end of the day, you wouldn't make the change - but at the same time, making your point based on a single downside is no reason to say the change is a bad idea.

One potential upside of lowering the corporate rate (as I showed in my last post) is that it would lower Intel's tax burden by at least a percentage point, if not a few percentage points. That translates into higher EPS, while at the same time the dividend looks less attractive.

So what's the net-net of that? Positive or negative? What if Intel instead puts those dividend dollars into stock buyback? That would also return value to the stockholder, no?

Like I said, the system is complex. Even outside of Intel, the result of some corporations paying their fair share means more revenues, and a chance of closing the deficit gap. If there wasn't a positive revenue story, I also doubt we'd see Obama proposing it.