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    President Obama’s proposed budget includes dividend tax rate increase to 39.6 percent

    By Alexandra Myers - The Daily Caller | The Daily Caller – Thu, Feb 23, 2012

    Buried in President Barack Obama’s 2013 budget proposal contains a whopping increase in the corporate dividend tax rate.

    The current tax paid on dividend income is 15 percent and President Obama wants to increase that tax rate to 39.6 percent. In 2003, under President George W. Bush, the dividend tax rate was cut from 20 percent to its current rate.

    This is not the first time the Obama administration has proposed a tax hike on investors. Previously, the administration proposed increasing the tax rate to more than twenty percent.

    The presidents’s proposed budget, if adopted, would make the tax paid on corporate dividends the same as the top rate paid by individuals on earned income starting in 2013 — 39.6 percent.

    A Wall Street Journal opinion piece, however, states that the real tax rate on dividends proposed by the president would be about 44.8 percent.

    “Add in the planned phase-out of deductions and exemptions, and the rate hits 41 percent. Then add the 3.8 percent investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8 percent — nearly three times today’s 15 percent rate.”

    The new dividend tax rate would apply to individuals with gross incomes of $200,000 and join fillers with incomes above $250,000.  The WSJ questions whether this burden would only fall on the “filthy rich”.

    According to IRS data, those over the age of 55 receive three out of four dividend payments, and those over 65 get more than half of all dividend payments.

    The WSJ piece makes the case with quotes from top researchers at conservative think tanks that an increase in the dividend tax rate would result in less dividends being paid to shareholders and hints that capital would be left stranded in old line manufacturing firms — an economic sector the president has been trying to help in his bid for re-election.

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    3 comments

    • hx
      hx  •  3 mths ago
      Only two comments? What have you done with the rest of the comments Yahoo? Aren't you worried that low number of comments will affect your advertisement revenue thereby profit thereby stock price? So the visitor counter serves the advertisers and censoring anti-Obama-policy posts keep profit at level that floats stock prices eh?
    • hx
      hx  •  3 mths ago
      Let see how Buffet and the likes will maneuver out of this tax rate and in a couple of years down the road still go on national media outlet to brag "my secretary pays more taxes than I do".
    • PKM
      PKM  •  Los Angeles, California  •  3 mths ago
      no estate tax lol
     Post a comment
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