Skip to comments.In 6 Weeks, A New Dividend Tax Will Smack Rich People Upside The Head
Posted on 11/17/2012 11:54:57 AM PST by SeekAndFind
Unless Congress intervenes, taxes are set to rise significantly on January 1st, when we hit the "fiscal cliff."
Most of the focus of this tax increase has been on income taxes.
Income taxes for incomes over ~$388,351, for example, are set to revert back to the Clinton-era 39.6% from the current 35%.
That's a relatively modest increase, and a 39.6% tax for the top bracket is still historically low. Capital gains taxes are also set to rise, from 15% to 20%. That's a bigger percentage increase, but the resulting capital-gains rate will still be historically low.
Screams about how these top-bracket income tax and capital-gains tax increases will ruin the economy by hammering spending and eliminating the incentive to work can be seen for what they are: The whining of people who don't want their taxes to go up.
The change in one tax rate on January 1, however, will be startlingly large: The change in dividend taxes.
On January 1, dividend taxes for those in the top tax bracket will jump from the current 15% back to the Clinton-era 39.6%. And then a new 3.8% surcharge to pay for Obamacare will be added on top, for a total top tax rate on dividends of 43.4%.
In short, unless Congress compromises, the top bracket for federal dividend taxes will nearly triple on January 1, from 15% to 43.4%.
(Excerpt) Read more at businessinsider.com ...
Look for a move away from dividend stocks and into other investments.
Little guys will get hurt as the value of their 401ks get gutted.
How will this affect those who rely on dividends to fund their pensions?
Or are pension funds exempt?
Rich people? The rich people will be hit with the new high tax, of course, but they (being rich) won’t be hurt as much by it as the rest of us who are NOT rich, but will still be forced to pay the new higher tax(es).
I am tired of headlines talking abut the rich people.
They exist, but they are a small number and BHusseinO is trying to raise all sorts of taxes even higher on millions of working people and small businesses.
Let’s talk about US, not just the few rich people all the time, ok?
And watch the “Markets” tumble even more as they “cash out” and move their money elsewhere or hunker down in their bunkers.
To the folks who passed that tax think about it this way ~ if I were driving down the street and the light was green, and you stepped out in front of my 18 wheeler, I probably won't stop ~ but if it's yellow, I probably won't stop either, and if it's red, you better believe I won't stop. Same goes for your heirs.
Frankly, people who threaten to kill me with a tax are scum and themselves lead lives not worth living.
This is all silliness; there really can be no doubt at this point what Premier Hussein intends - he intends to usher in an establishment of American socialism, in which The State lays claim to all assets of any sort whatever, and the national slogan becomes “From each according to his ability, to each according to his needs.”
It was a favorite of Marx, Engels, Trotsky, and Lenin, and drove Russia - as well as China and countless other nations - to its knees.
Hussein, fundamentally an America hater, fully intends the destruction of America, and nothing less will do.
What was the bracket levels for this dividend 15 to 43% increase at? Anyone receiving 50K plus on Divs will be hit? 100K? 250k? My app. if it was there and I missed it.
I always remember when 0boober was running in 2008 and a reporter actually asked him, "It's been shown that raising capital gains tax rates actually leads to a net drop in revenues as people stop trading, in light of this why would you propose doubling the capital gains tax rate?"
Of course 0boober fumbled for an answer (TOTUS still wasn't feeding him his lines 24/7). After a few ahhhs and uhhhms his answer was "It's a matter of fairness."
and there it was....
The economic health of the country and its citizens be damned.... it was all to satisfy the soon-to-be first black president's notion of "FAIRNESS".
And this is the mentality that we reelected and that governs us right over the fiscal cliff.
This is why the “rich”, anyone not an Obama Voter, have been dumping stocks before the first of the year.
RE: as they cash out and move their money elsewhere
I wonder where “elsewhere” is. There seems to be little to no safe haven anywhere.
It will also hurt the companies that pay the dividends such as utilities to get investors as they don’t usually have much on the capital gains side. But they require a certain level of capital investment versus borrowed.
I remember back in late 1992, Michael Eisner, then-CEO of Disney, sold off a kazillion of his shares in anticipation of the inauguration of Slick Willie whom Eisner had worked so hard to get elected.
I am assuming that since stock dividends are not taxed; only as capital gains when the shares are sold. Companies may be opting for stock dividends instead cash then?
Clinton-era taxes didn’t cause a cure wall street was in a big bubble mode.
I wonder where elsewhere is. There seems to be little to no safe haven anywhere.
Silly Willy, Obama will take care of that for you by confiscating your 401K and putting your money into nice and safe T Bills.
He's looking out for you. Doesn't that make you feel secure?
As far as I can tell, it applies to ALL dividends.
Seriously? That's a 13.14% increase. Not my idea of modest. Maybe 1.4%...
Dividends will be taxed at a taypayer’s income tax rate.
Not to mention Henry Blodget. Is he on our side? I don't believe so.
I think Obama's tax increase is a dumb idea and, like Obamacare, will ultimately screw the people who voted for Obama the most. The Republicans shouldn't roll over because if Obama has his way, the guy living in the cardboard box over the heat vent will be "rich". But, well, when it comes to Hollywood and Blodget and his friends -- screw 'em. THEY voted for it!