By Jessica Wohl
(Reuters) - Wal-Mart Stores Inc on Monday became the biggest corporation yet to move its planned dividend into late December from early January to help shareholders avoid a looming jump in the tax rate due to the so-called fiscal cliff.
The shift by the world's largest retailer will give shareholders, including the family of founder Sam Walton, roughly $1.34 billion in total dividend payments taxed at the current rate.
Fiscal years for retailers typically end in late January, so their dividend payments often are timed differently from those of other types of companies. Exxon Mobil Corp, for instance, had already planned for payouts in December.
"There are complex fiscal and federal tax rate issues that may not be resolved in the next few weeks, despite the ongoing good faith negotiations between the administration and Congress to resolve details related to the fiscal cliff," Wal-Mart said in a statement.
"In light of this uncertainty, the board determined that moving our dividend payment up by a few days to 2012 was in the best interests of our shareholders."
Teen apparel chains Hot Topic Inc and The Buckle Inc already said they would move dividends typically paid in January into December to allow shareholders to benefit from the lower tax rate set to expire this year.
Adding to what has become a clamor for the White House and legislators on Capitol Hill to compromise, the Fitch ratings agency said on Monday that the "fiscal cliff" could trigger a recession and push the unemployment rate above 10 percent.
Fitch said it did not expect the tax hikes and spending cuts to occur. The investment firm Morgan Stanley Smith Barney also said in a market commentary on Monday that it thought Washington would "act to mitigate and delay" the cliff.
Robert Greifeld, chief executive of NASDAQ, the second-largest stock exchange, called on Democrats and Republicans to rediscover the ability to compromise and commit to a long-term plan to reduce the national debt.
Republicans must budge on tax increases and Democrats must give ground on spending cuts, Greifeld said in a Monday speech at the Brookings Institution, a Washington think-tank.
SPOTLIGHT ON DIVIDEND TAXES
Without action from Congress, the dividend tax rate will rise to the ordinary income tax rates, as high as 39.6 percent for top earners. Dividends are now taxed at 15 percent for the top four brackets and zero at the bottom.
In 2003, President George W. Bush and Congress cut taxes on capital gains and dividends, which mostly affect high-income taxpayers. These cuts are set to expire at the end of 2012.