Case 1
Assume a person makes $150,000 and get $25,000 in a stock dividend payment. Total under $200,000 so does that me the $25,000 would not be taxed?
Case 2
Assume a person makes $150,000 and gets $75,000 in stock dividend payment. Would that be taxed or only the amount over $200,000?
This would be fleshed out more with time, of course, but from what I gather, in your scenario #1, the individual would pay no tax on the $25,000 (not from the dividend he received, not from the interest it generated, or from liquidifying it by taking it off the market).
In your scenario #2, I’m not sure. On face value, it would appear that the usual capital gains tax would be enforced.
Could play an interesting effect on moving investment away from dividents and more towards growth for those close to the $200K mark.