gryffron wrote:Surely the issue in the US is a higher withholding tax (for most US citizens). A simple comparison of yield is meaningless. US companies deliberately pay lower dividends so their shareholders pay less tax. That doesn't mean US shares are better or worse. But it does mean that simply comparing yields between the 2 countries is meaningless.
Actually there is no withholding tax on dividends (or interest) for US citizens. Or more accurately, for US residents. Dividends are paid gross and any tax due is settled via submission of a self-assessment tax return (form 1040) using the dividends recorded on a form 1099, similar to our consolidated tax certificate.
The 30% and 15% withholding rates are for overseas residents.
The federal tax rate on dividends is 15% (possibly higher for very high earners). There may be a state income tax on top. Dividends used to be taxed at a higher rate but that changed in one of Bush Junior's tax measures (2001 and 2003).