Posted on 09/26/2010 3:26:25 PM PDT by Jet Jaguar
As if battered investors needed more abuse, they are in for a rude awakening at the end of the year.
SNIP
The most dramatic change will be in the taxation of dividends. Who doesn't love big, stable dividend-paying companies in these uncertain times? Well, you may have to adjust your portfolio as the tax on dividends will rise from the current Bush-era maximum capital gains rate of 15% to a Clinton-era maximum income-tax rate of 39.6%. While Obama had proposed a 20% tax on dividends as an alternative, that now appears unlikely given budget rules enacted by Congress.
Speaking of capital gains, that attractive 15% maximum rate will rise to 20%, so if you have big gains, you may want to sell your high-dividend stocks this year and buy different stocks with less tax impact.
The story is the same for income tax rates. The Bush brackets of 10%, 15%, 25%, 28%, 33% and 35% will revert back to a schedule of 15%, 28%, 31%, 36% and 39.6%.
The so-called marriage penalty and the phase-outs for itemized deductions and personal exemptions for wealthy taxpayers will also return.
(Excerpt) Read more at thestreet.com ...
Boy are a lot of people in for a surprise.
I personally have modest investments for which the current dividend tax rate saves me approximately two to ten dollars. The big difference this change is going to make is that many (most?) of my employers clients get significant amounts of their income from dividends. Thus this change to tax law shows potential to adversely affect my income.
Let’s see...government employees and other wealthy government beneficiaries pay higher taxes, which taxes go to the government and back to them. ...circular genius! What a country!
Those Underpaid Government Workers
http://www.freerepublic.com/focus/f-news/2596091/posts
You left out the 0%, -10%, -20% brackets that the Obama supporters are in.
I think it is a bad idea for most people if it kicks them into the 25% bracket or higher. If they have state high state income taxes like California, it is terrible idea.
You really have to do your homework...
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