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 ...
When you find out where they’re putting their cash, let me know.
Expect to see a heck of a lot of money transferred into tax free municipal bonds soon. Especially when those bond funds exclude blue states.
Just curious, how often do utility companies issue new stock? If they don't issue new stock, then I think your point is moot. The only people affected will be current owners of stock - that value of each share would go down a bit. But the dividend payout should remain unaffected by the changed tax rate, no?
The simple way to look at it is this: If nothing happens, dividends become ordinary income. So just look up your income bracket, including dividends, and that rate is what you would get.
Yep - and they still claim that the Bush tax cuts did nothing for the little guy, even as they point out that stopping them will hurt the little guy...
What the author of the article did not take into account was the number of people making that much money historically.
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