Stock dividends are in jeopardy on multiple fronts. This is not good news for equity income investors or the US stock market overall. Four forces are converging on and against US dividends:
Companies are cutting dividends or not raising them Tax trap in existing dividend tax rules Congress will legislate higher dividend taxes after 2008 Possible legislative mandate for TARP participants to suspend dividends.
The delicate condition of investor psychology, the simple math of dividends as part of total return, and the comparative yield opportunities in developed foreign markets, suggest that declining dividends would depress US stock prices.