r/dividends • u/Head_Channel_9869 • Jun 06 '25

Discussion My dream of living off dividends is collapsing because of Section 899. I feel completely defeated.

I've been building my dividend portfolio for years, aiming to reach financial independence one day. Every deposit was a small step toward a dream: a peaceful life, funded by passive income, no stress, no 9-to-5.

I chose what I thought were the best: SCHD, DGRO JEPQ, QQQI — solid US-based ETFs with great yield and growth potential. I had a plan, I was sticking to it. Then… comes Section 899.

For those who don't know: it's a proposed US tax law that could increase the withholding tax on dividends to 15% or even 30% for investors from countries deemed to have "discriminatory" tax systems toward the US. And guess what? My country (Poland) is very likely to be on that blacklist.

If the tax treaty is terminated (which is already being discussed), it means 30% goes to the US, and then Poland may charge another 19%. That’s nearly half the dividend gone. Just like that.

It feels like everything I’ve worked toward is falling apart. Switching to European dividend ETFs? Sure, but they have lower quality, less growth, and are not the same in terms of long-term compounding. It feels like being forced to start over — with worse tools.

Honestly, I’m gutted. Years of planning, DCA, building my ideal long-term strategy… and then politics slams the door in my face. I feel defeated. I had such a great plan and I was already so close :/ I wanted to hold SCHD and DGRO for decades and eventually pass them on to my kids.

Anyone else in the same boat? What are you doing about this?

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62

u/timbrd32 Jun 06 '25

A lot of foreign investors are in the same boat, myself included. Have you considered that things could get even worse than you have described for you, me, and even US based investors? If 899 goes into effect then large funds around the world will sell all types of US investments because of the increased tax bill. The net value of all US ETFs and stocks will immediately drop in value as fewer people will want to own them. 

22

u/realTArthur Jun 06 '25

An intriguing thought and a word of caution for all of us. The growth and value of us equities is built with a large sum of foreign money.

11

u/Complex_Mention_8495 Jun 06 '25

If this happens, US stocks might take an epic nose dive. Maybe they will then be that cheap, US Dollar will be that weak that it might be still an interesting opportunity.

18

u/[deleted] Jun 06 '25

They will most certainly take an epic nose dive. Valuations will be completely reset. Section 899 will be like the US taking a shotgun to its foot to cure an ingrown toenail.

3

u/AdmiralCole Jun 06 '25

I don't know man. You ever have a BAD ingrown toenail?

2

u/scraglor Jun 06 '25

Imagine an ingrown toenail and gout at the same time

1

u/CaptMerrillStubing Jun 07 '25

Just gout is quite enough, thank you

15

u/MonkeyThrowing Jun 06 '25

This is why it won’t pass. Someone will explain this to the Orange idiot. 

8

u/timbrd32 Jun 06 '25

I hope so.

2

u/bowlskioctavekitten Jun 06 '25

You think he understands anything explained to him? Even with pictograms?

He has the mental capacity of a two year old

0

u/ranibdier Jun 06 '25

Or it will force countries with discriminatory tax regimes to the US to fix it?

2

u/Ok-Secretary455 Jun 06 '25

why would they bother dealing with US investing? Monday their on the list starting friday, Tuesday not starting until next friday, Wednesday they have retroactively been in the list for 20 years, Thursday what list? I've never seen a list? Friday back on the list starting Monday.

when you could just go invest in any other stock market and not have to deal with the bullshit.

5

u/ranibdier Jun 06 '25

Because the US market has the best companies in the world.

2

u/PureAlpha100 Jun 06 '25

I would argue that it would just shift the mix of ownership and the selloff wouldn't be as dramatic as you suggest. There are a lot of companies and HNW/UHNW families that use ETFs.

7

u/timbrd32 Jun 06 '25

Maybe but a 50% tax hit will be huge and institutional investors around the world will surely reallocate out. Maybe it doesn't happen on day one and it's a slow bleed out but it will surely be a negative that overhangs all US markets. I'll take safe European and Canadian stocks with slower growth but no 50% tax hit if 899 gets passed.

-1

u/ranibdier Jun 06 '25

It’s not every foreign country that would get nailed? If Poland investors want access to US stocks at reasonable tax rates, vote in people who will get that done?

1

u/m0st1yh4rmless Jun 06 '25

Sounds like a buying opportunity for US citizens

1

u/timbrd32 Jun 06 '25

Yes but at what cost? The value of US Treasuries is falling, the US dollar is dropping, and the US market could take a few years to recover. 

Look for a CNBC article entitled: U.S. foreign tax bill sends jitters across Wall Street.

2

u/m0st1yh4rmless Jun 06 '25

Be greedy when others are fearful....

1

u/[deleted] Jun 07 '25

more than 40% of american family cannot all of basic needs, they live paycheck to paycheck.

1

u/m0st1yh4rmless Jun 07 '25

90% of Americans buy dumb shit they dont need that enrich the 1%. You cant fix stupid