Yesterday, my colleague Elliott Gue penned an alert to Personal Finance and Energy Strategist subscribers titled “Tax Deal is Bullish for Stocks.” In my view, that’s also true for income investors. That’s despite the past couple days’ jump in the yield on the 10-year Treasury note, which in the past has been a benchmark for all income investments.

For yield seekers, the most bullish item in the compromise between the White House and Republican leadership is a two-year extension of the top 15 percent rate on dividend income. That should head off any possibility of even a temporary selloff in dividend-paying stocks come January, as many had feared.

My view has always been that tax rates have never had much real impact on dividend-paying stocks’ valuations. Rather, for the first time in decades, tax-advantaged stock yields have been well above tax-disadvantaged bond yields, indicating the economy is what’s setting relative prices, not tax rates.

Near-term market moves, however, are all about sentiment. And with several Wall Street firms forecasting a selloff in the absence of lower rates, we could indeed have seen selling.

A two-year extension of the top 15 percent dividend tax rate–as well as the rest of the Bush-era rates–ensures the tax issue will be decided in the 2012 election cycle. That makes it possible we’ll eventually see them made permanent. In the meantime, investors can enjoy the lower rate for the next two years, even as companies ramp up their dividend growth.

I think it’s wise to be skeptical when politicians promise their actions will spur economic growth. To the extent this compromise does that by cutting taxes, however, it will further enhance our favorite companies’ cash flows–and their ability to boost dividends.

As I’ve also pointed out, dividend-paying stocks have been largely decoupled from benchmark interest rates over the past few years. Rather than following rate trends, they’ve tracked the economy’s prospects, moving higher when the news is good, lower when it’s soured.

The 10-year Treasury note yield has risen from a low of less than 2.4 percent in early October to a high of 3.7 percent today, following the news of this compromise and the stimulus/higher deficits it will bring in the near term. Averages of dividend-paying stocks like those comprising the Dow Jones Utility Average, however, have basically moved higher over that time, mirroring action in the broad market averages.

That’s pretty clear evidence they’re still following the economy’s prospects for growth. My view is that will be the case until we really do see some inflation pressure in the US economy, which, in turn, won’t be possible as long as so much capacity is lying idle and unemployment is near 10 percent.

It’s also worth nothing that yields on corporate bonds–while rising in the face of the compromise–are still near the lowest levels in decades. Companies that borrow from here on may have to pay somewhat more than they have recently. But they’ll still pay less than they have for decades, despite the Treasury yield spike. For bond buyers I still favor only maturities of five years or less, which is reflected in the Conservative Holdings in the Utility Forecaster Income Portfolio and in the Personal Finance Income Portfolio bond holdings.

The upshot: High-quality dividend-paying stocks are still the place to be for income investors. That also goes for master limited partnerships (MLP), which would have gained even more value as tax havens had the 15 percent top rate not been extended.

MLPs are still advantaged, as return of capital isn’t taxed in the year received but only as a capital gain when MLP units are sold. Further, our favorites’ real appeal is that they’re dividend growth machines that will only run faster as the economy picks up steam.

As Elliott wrote yesterday, there’s still a chance this compromise will be blocked or significantly altered, as it appears to be opposed by at least some Democrats. As former President Clinton proved by passing NAFTA in 1993, however, it’s often a lot easier for presidents to get controversial things done by crossing the aisle than with party loyalty alone.

I therefore share Elliott’s view that this will pass. But I also strongly urge anyone yet to visit www.DefendMyDividend.org to do so now and sign the petition to extend low dividend tax rates, and contact your congressman, too.