Big Gain for Rich Seen in Tax Cuts for Investments - New York Times

Big Gain for Rich Seen in Tax Cuts for Investments - New York Times

It's a good time to invest in high dividend yield stocks such as DHF and NCV. Dreyfus High Yield fund (DHF) is a closed end fund that pays dividends monthly; it's annual yield is about 10%.
Let's consider two people under the current tax laws of 15% tax on dividends and around 40% tax on income for high brackets.
Person A has five million dollars in savings and zero income. They invest all of their savings into DHF. Annualy, the stock will pay out 10% yield, giving them $500,000 annually. Under the current tax law, the tax on this $500,000 is $75,000. This leaves person A with $425,000 after taxes.
Person B has zero dollars in savings and a $500,000 in income. This person will pay 40% in income taxes and several other taxes. The tax on $500,000 would be $200,000. This person will receive $300,000 after taxes.
Person A does not work and receives $125,000 more money than Person B who works for money.