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Dear Integrys Shareholders:
Thank you for your continued investment in Integrys Energy Group. We value the trust you've placed in us and understand the great responsibility we have in maintaining that trust.
As a company, Integrys is ever watchful for the interest of our shareholders. And that is why I wanted to take this opportunity to talk about the current tax treatment associated with your dividend payments. In 2003, the federal tax rate on corporate dividends paid to individual taxpayers was reduced to a maximum rate of 15%. This reduction is effective through December 31, 2010.
As I'm sure you are aware, dividends are taxed twice — once at the corporate level and again at the individual taxpayer level. Dividend-paying companies and their shareholders are, therefore, penalized in relation to many other types of investments. Reducing the tax on dividends was intended in part to address this inequitable double taxation.
If the reduced dividend tax expires in 2010 as currently scheduled, shareholders receiving dividend payments will likely be subject to higher tax rates, negatively impacting their investment returns. Our company is actively working with the American Gas Association and Edison Electric Institute to support the extension of the lower tax rate on dividends.
I encourage you to become engaged in this issue now, either by individually contacting your elected federal officials or by joining other shareholders or shareholder associations. Let your members of Congress know that the double taxation of dividends is unfair and that they should support the current 15% tax rate. Or visit the website integrys.defendmydividend.com, where you will find the latest news on the issue and ways to show your support quickly and easily.
Join the effort to stop the impending tax increase. We'll do our part by continuing to advocate for a permanent reduction in the dividend tax rate and keeping you informed on progress as it is made.
Thank you, again, for your investment in Integrys Energy Group.
Best regards,
Charles A. Schrock
Chairman, President & CEO
