Obama-friendly retailer issues special dividend to avoid Obama tax increase

As Twitchy reported on Thursday, Vice President Joe Biden attended a Costco grand opening. He noshed on free samples, checked out some kiddie books (reading is hard), and went looking for pie. Good times.

Why Costco and not, say, Sam’s Club? It might be because Costco co-founder, former CEO, and current Board member Jim Sinegal is a supporter of President Barack Obama. Here he is at the Democratic National Convention in Charlotte talking about how awesome Obama is:

Late last week, Sinegal and the rest of the Costco Board of Directors voted to pay shareholders a special $7 per share dividend to avoid higher dividend taxes that are scheduled to go into effect on January 1, 2013. As the Wall Street Journal notes,

That’s a $3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15%, rather than next year’s rate of up to 43.4% — an increase to 39.6% as the Bush-era rates expire plus another 3.8% from the new ObamaCare surcharge. More striking is that Costco also announced that it will borrow $3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they’re taking on debt to do so.

That’s a shrewd business decision, no question. But some Twitter users felt it was hypocritical:

  • Linda Ponzo

    Pretty smart move from a business standpoint. How long, though, before a boycott Costco movement starts against the greedy corporation and their rich, white stockholders? How dare they deny Obama those tax dollars.

  • orringtonmom (D)

    i’m sure the obama voting shareholders are refusing the savings and sending it to the IRS with a note “sorry we tried to get out of paying more”. i’m just sure of it. what, no?

    • http://twitter.com/thetugboatphil TugboatPhil

      Obama shareholders?? Does CostCo accept EBT?

  • waltermitty2012

    Dozens of other companies are doing the same as Costco and why wouldn’t they. It’s good for their business and stockholders.

    • http://twitter.com/thetugboatphil TugboatPhil

      The question is, did those other companies speak out publicly IN FAVOR of higher taxes? It’s great for corporations to make the most money that they can, but if that is their practice, they should not be in favor of making others pay higher taxes.

  • dwsmokin

    I’m going to do my patriotic duty the same way a Democrat would-I’ll be shopping at Sams Club and not Costco. Nothing against the dividend-it was the smart thing to do. Just can’t support a retailer that supports this President. Between Sams, Target, Chick Filet, etc,, should be able to manage just fine.

  • Frank Julian

    Good for Cosco, that’s what capitalism is all about!!!!!!

  • stuckinIL4now

    Wonder if Costco board members will decide to raise membership rates to pay the interest on that loan. And what happens when they start cutting hours or laying off or increasing health insurance employee contributions or, horrors, cancelling employee health insurance altogether?

  • http://twitter.com/lanelle17 LANELLE

    Smart business move. Sorta like Romney’s off shore accounts & outsourcing jobs. But hey, he belonged to the wrong party. tsk tsk Ok for Dems to make smart moves, not Rep.

    • Guest

      I know logic is not your strong suit…but….You do realize that they are trying to avoid a law/tax that the Democrats put into play themselves right???

    • http://twitter.com/thetugboatphil TugboatPhil

      No, Sinegal is taking advantage of existing tax laws to keep from losing money to the government.

      Where he is a hypocritical, throne-sniffing, rumpswab of Obama is that he spoke out in favor of higher taxes at the Democrat National Convention.

      Although you might not have seen that with your cranio-rectal impaction.

    • http://twitter.com/TheAngieNC2 Angie (D)

      Um, Romney wasn’t the one in charge of the tax code & Romney wasn’t the one saying RAISE taxes. And “outsourcing” doesn’t mean what you think it does — AT ALL — I mean, you’re not even a little bit right on that one having ANYTHING to do with paying income taxes. And what’s with you thinking payment of PROFITS to investors is a smart business move — I mean, besides the fact that anyone who doesn’t know what “outsourcing” means wouldn’t know a “smart business move” if it jumped up & slapped you in the face – I thought you freeloaders were against “evil profits.” Oh, I forgot –it’s OK for 1%ers who are Obama cronies to make profits– just not everyone else.

      FFS — you Obama supporters can’t help proving exactly how completely ignorant of the law, economics & business you have to be to vote for Obama.

      eta: PS — Romney’s paid more than $60 million in federal income taxes over the last 20 years — that’s a lot of FREE STUFF for parasites like you for which he’s footing the bill. (And that’s not even counting the millions he’s given to charity).

  • June Richardson

    I know I will never shop at Costco again!

  • CombatDiver

    Typical hypocrites

  • Peyton


  • Peyton

    If Liberalism is a disease, when are these people gonna start kicking the can? Can’t be too long.

    • TexSizzle

      Fortunately for them, it’s not a fatal disease.

      • Peyton

        I think you mean unfortunately for us.

  • digitalPimple

    After I saw this years DEM convention I cut up my Cos business card. LOL

  • jerry

    Two words: BOYCOTT COSTCO!!!

  • OldmanRick

    The hypocrisy of the obamanites(Marxists) is incredible.

  • Junie3

    Costco sells meat that has been sacrificed to Allah, some of the stores carries Halel meats, mostly Lamb. Be careful to look for the Halal stamp. It’s food sacrificed to idols.


  • Steve

    It is exactly this type of duplicity that destroys any credibility that the Liberals have. Warren Buffet says he does not pay enough taxes, but takes no personal effort to just go ahead and pay the tax rate he feels he owes. And his business fights the IRS on what the IRS says they owe. With the Liberals it’s pretty much forcing others to do as they wish (or pay the taxes they wish), but not doing such themselves.

  • Penmar

    I am not surprised by this, libs/dems live by the do as I say not as I do rule.

  • equal_rights_for_all1

    What’s a Costco?