Jon Link’s letter of Dec. 7 commenting on the Costco dividend to be paid prior to any 2013 tax rate increase deserves a response. The increase is not “coming to you courtesy of the Obama administration,” but rather as a result of the Budget Control Act of 2011 passed by a Republican-controlled U.S. House of Representatives, including a “yea” vote by Paul Ryan.
The assertion that “the recipients will keep an extra $852 million that would go to the government after Jan. 1, 2013” is false because Costco was not going to pay the dividend under the higher rate in 2013. If the rates were to stay the same, there’s no certainty that Costco would ever pay another dividend — they could go broke.
As it is, the taxpayers get 15 percent of $3 billion and some much needed help in “paying for America.” But more importantly, a $3 billion transaction of any sort is great news for the recovering economy (coming to you courtesy of the Obama administration). All that wealth being redistributed from the lenders, to Costco, to the shareholders and on to all of us is terrific.
The Costco board of directors are not being hypocritical. If they too allowed their personal opinions about tax rates or anything else to interfere with their fiduciary obligation to the shareholders they would be remiss. It is true “that ‘rich people’ didn’t get rich because they are stupid.” Some of them were smart enough to pick Sam Walton as a daddy.
K.M. REID
Johnson City
