Long term capital gains will be taxed at less than the tax rate for dividends, if Congress doesn't monkey with the laws. Taxing dividends at ordinary income rates may be the price you pay for receiving a present value return on your investment. Before our golden new era of stock market perfection, dividends were an important component of return on investment and most studies showing the 10% or 11% average annual return on stocks through history, include reinvested dividends. I think the irrelevance of dividends has a lot to do with stock valuations now, and may pose the question, what happens to my capital gains, without regard to the rate they are taxed, if something causes the average dividend return on stocks to increase over time, to a more normal level?
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