I found out what the difference between a royalty tax and dividend tax would be from my accountant. And at least in the state I'm in it's based on your Tax bracket, though I don't think it would differ from other states.

So basically you make a lot of money you're going to get taxed pretty heavy compared to a regular dividend tax, if you're in the lower brackets, then you pretty much pay darn near close to the regular Div tax, though we know Obama wants to raise this tax, not sure how it'll effect royalties if at all, but Div taxes will go up.