Skip to comments.Great News, Rich Americans, Looks Like Obama's Caving On Dividend Taxes!
Posted on 12/19/2012 8:18:52 AM PST by SeekAndFind
Capital gains taxes will also revert to Clinton-era levels, rising from 15% to 20%, with a 3.8% Obamacare surcharge to be tacked on top. That's also a meaningful increase, but not a life- or behavior-changing one. And the 23.8% rate will also still be historically low. Much less noted--and much more meaningful for many high-earning Americans--is the scheduled increase in dividend taxes.
Thanks to Obamacare, dividend taxes will already have the extra 3.8% surcharge tacked on top of them regardless of what happens with the Fiscal Cliff deal.
More importantly, dividend taxes for the highest earning Americans are set to rise from the Bush-era 15% all the way back to the Clinton-era 39.6%. In other words, they're set to be taxed as ordinary income again.
Adding in the Obamacare surcharge, therefore, if current law is enacted, this will result in an astounding tax hike on qualified dividends from 15% to 43.4%. What this means is that well-off Americans who are collecting, say, $100,000 a year in gross dividend income will keep about $57,000 next year versus $85,000 this year, a drop of 33%.
Unlike the change in income taxes and capital-gains taxes, that change is big enough to create a strong incentive for changes in behavior.
But now there's good news for folks who get a lot of income in dividends!
Obama appears to be caving on the idea of raising dividend taxes all the way back to Clinton-era rates.
The current plan, according to a report from Huffpo's Ryan Grim, is to tax dividends and capital gains at the same rate--20%. And this rate will only kick in at a relatively high income level: The White House wants $250,000 and the Republicans are pushing for $1 million.
(Excerpt) Read more at businessinsider.com ...
Warren Buffet will be pleased.
That “free” healthcare is costing the economy a fortune.
The communist is not caving on $%#*.
He will use any kind of workaround to find a way to separate smart investors and hard workers from their money.
lord and savior is going after the investing class because he wants to dry up equity and cripple capitalism. He will then continue to declare capitalism a failure and impose total communism and the people will love his and sing his praises...
peace be upon him
Will the first $34K in dividends still be tax-free?
Dividends make up a large portion of my Mothers retirement income. I am sure there are many other senior citizens that rely on dividends from investments to supplement their social security and pensions.
Don't count on it. Why should 0bama cave when he knows the Weeper of the House has a spine the consistency of a wet noodle.
Precisely. My Dad, 86 yr. old WW2 vet, joined at Army Air Force at 17 in 1943 with letter from his parents, served 3, then went to work in family business 6 days a week till Alzheimers took him down at 79.
Lives in a care home, paid for by Soc. Sec. and dividend income. It breaks even, but we know what is coming under the DEMS. Lived modestly, saved, served country, folks this is the reward.
Palin was right, in the future we will sit around the kitchen table talking about how good life used to be.
Progressives will urge euthanizing to save money for their vote buying giveaways.