Politicians seeking sources of revenue with which to reduce the deficit will find that some of the sheep did not wait for the shearing

Markets move even when politicians don't. Investors and consumers aren't waiting for America's politicians to decide whether and, if so, how to put our fiscal house in order. They are acting, now.

Many corporations, especially those in which founders hold large positions, have decided to declare special dividends, or to bring forward dividend distributions to avoid swingeing tax increases next year.

If the Bush tax cuts are allowed to expire, tax rates on dividend income will rise from 15% to 43.4% when the 3.8% Obamacare tax on the investment income of higher earners is included. Such hefty increases might be avoided, but some non-trivial increases there will be.

Markit, the data-gatherer, reckons that by year-end, some 120 companies will have taken steps to avoid next year's higher taxes - four times the average. Wal-Mart, 48% owned by the Walton family, moved its dividend-payment date from January 2, 2013, to December 27 this year, and Las Vegas Sands, in which Sheldon Adelson and his wife own roughly half the shares, declared a special dividend in excess of $2bn (£1.25bn).

The effects of these moves are not confined to the recipients of the payouts. For one thing, companies declaring special dividends will enter 2013 with less cash with which to make acquisitions. For another, there will be more share buy-backs next year as companies seek to find a way to get cash to shareholders without paying dividends. "Dividends were the big thing . . . the new focus will be on stock buyback programmes," portfolio manager Peter Andersen told the press.

David Fuller's view Successful companies will generally do what is in their best interests, including those of their shareholders.

While the fiscal cliff is the USA's current preoccupation, many of us are more concerned by the longer-term problem sometimes referred to as the 'Fiscal Abyss'. In other words, the USA has an accelerating national deficit which commenced in George Bush's two terms with the military response to attacks on 9/11, but has greatly accelerated during the last four years. Aggravated by a soft global and also domestic economy, the US has been spending far more money than the Treasury is receiving from taxes and any other sources of revenue.

I preferred Mitt Romney's economic policies, albeit with some reservations. Now that President Obama has been re-elected, I very much hope that he can rise to the challenge of unifying most of the country with economic programmes which need to be generally regarded as both fair and fiscally responsible.

This did not happen during the four years of his now expiring first term, in my opinion. He has a second chance and I wish him well, but we are still waiting.

I conclude with this opening comment from November 30th:


If this standoff is allowed to go down to the fiscal cliff wire, it will further undermine confidence in US political leadership. That would be unfortunate.