Larry Dighera wrote:

On Sun, 04 May 2008 17:37:04 GMT, Jay Maynard
wrote in
:

On 2008-05-04, Larry Dighera wrote:
As a percentage of your total income how much is derived from
dividends?

0.

How is this relevant?

Here's a quote from an unbiased source:

http://www.smartmoney.com/taxmatters...story=20030527
Qualified Dividends Now Taxed at 15% or Less
As you know, dividends have always been taxed as "ordinary
income." That meant you paid your regular tax rate, which could be
as high as 35% (formerly 38.6%).

That was then. Effective for all of 2003 through the end of 2008,
qualified dividends from domestic corporations and qualified
foreign corporations will be taxed at the same low rates as
long-term capital gains. And those rates have been reduced, too
(see below). Bottom line: The maximum rate on qualified dividends
is now only 15%. And if you're in the 10% or 15% rate bracket (see
the table above), your dividends will be taxed at only 5%. (For
2008, the rate will be 0%, but just for that one year.)

Thank you for posting this description of the tax rates, which anyone who
just completed Schedule B this spring is probably well familiar with
already. The new "qualified" dividend rate was a good idea and was a
response to accounting frauds in the late 1990s. It was also designed to
generate investment in American companies. Lowering dividend rates (which
is double taxation to begin with) increases incentives of corporations to
pay dividends, (it is much harder to fake real cash paid) and it has been
successful, while decreasing double taxation.

...

One more thing: The new low rates don't apply to dividends
received in tax-deferred retirement accounts (traditional IRAs,
401(k) accounts, SEP and Keogh accounts, and the like). Dividends
accumulated in these accounts will still be taxed at your regular
rate (up to 35%) when withdrawn as cash distributions.

Well, obviously.