Yet another troubling policy proposal from the fiscally irresponsible Obama administration that would slam shareholders of ALL incomes. As mentioned in the article, this would especially affect near-retirees and retirees, as 3/4 of dividend payments go to those over the age of 55. Why own equities? Time to roll heavy w/ municipal bonds... until Obama decides it's in the best interest of the ever-powerful government to place a crippling tax on those, as well. http://online.wsj.com/article/SB100...25493025537660.html?mod=WSJ_hp_LEFTTopStories
Wait, what? You seem to think tax cuts and fiscal responsibility are the same. This is kind of a fatal mistake, insofar as it makes you look like a buffoon who doesn't understand a single thing he's talking about and should be taken outside, beaten with a stupid stick, while somebody disconnects your computer for the internet. First, the dividend tax is set to automatically go up dramatically anyway after 2012 as part of the extension & subsequent expiration of the ol' Bush tax cuts (which was the only way you could get it past the CBO for fiscal reasons back in the day)..so...wait, why is it fiscally irresponsible to keep holding dividend taxes artificially low by historical standards? It's in fact the opposite of it, by any intutive measure, and by empirical measures there appears to be a correlation between short run deficits and ri-joke-ulous tax cuts of the 00's, of which the dividend tax cut was one. Second, this garbage you posted below seems to be bemoaning that, since it's mostly rich people (sorry, job creators) who take home the lion's share of them, it's basically a tax up on errrybody, since they create jobs. Honestly, logic fail so huge I don't even know what to do here, other than to mail you a complete DVD set of "The Apprentice" so that you can while away your remaining days doing as little harm as possible.
is 45% a reasonable rate historically? do you think this will hinder any of the major dividend players (40-50yrs of dividend increase) from keeping the streak alive? even with the beneficial Bush rate, some of the dividend increases were pretty marginal... I have been formulating my long term dividend strategy, so am only asking for my own selfish needs as a novice to this...
It's not simply 45%; it is your personal income tax rate, which is progressive. Only people with a high income would actually pay the 45% on dividends. Honestly, I'd rather have capital gains taxed at that rate and keep the taxes on dividends lower. BUt, it's not a big issue for me.
You mean, the administration that wants to reduce the deficit? How is reducing the deficit "fiscally irresponsible?" Except that it wouldn't. It would treat dividend income the same way as earned income, so high income individuals would pay up to 39% while everyone else would pay at their own income tax rate, whatever that is for the individual. Except that retirees and near retirees will have structured their income so as not to hit income levels that would subject them to drastic taxation. If someone is making over $375,000 in dividends every year, they can afford to pay the higher tax rate, n'est pas? The tax rates weren't "crippling" under Reagan, Bush the Elder, or Clinton, people were still able to get rich even though taxes were higher. Your claims are inaccurate and hyperbolic.
My big problem with the 15% rate, is why does the person in the 25% bracket and the guy in the 35% bracket pay the same 15% rate? Personally, I think dividends should be lower for closely held businesses, especially small businesses. Take a small personal service corporation. They are taxed at 35%, and then the shareholders are taxed at 15% for the dividends received. That is a 50% tax on them, and doesn't even include state taxes which would generally bring the tax rate over 60%. That is ridiculous. Of course that can be mitigated by electing to be treated as an S-Corp, but S-Corps are being attacked in Washington.
I don't mean to get off topic, but MourningWood, is your user name intended to let us all know you've got erectile dysfunction? Granted, it seems like an odd theme in choosing a username, but every time I see it, I try to think of another reason to be in mourning for "wood". I can't.
Wow - the initial post is full of an incredible amount of fail. I don't know if MW simply has no understanding of the subject or thought that everyone else here was stupid and would accept his ignorance as fact?
Have you heard of an IRA or Roth IRA? Anyhow, all cap gains, div income, and muni bond income should be taxed at regular income tax rate.
Not to be a math nazi (oh noes, I throwed nazi as an analogy!), but the 15% tax is on the net amount, not the gross amount, meaning it isn't 50%. Still mid 40's though.
If we want to get technical, you could distribute more than the after tax profits... But yes, that would hold true in the long run, of course discounting for non-deductibles and expiration of carryforwards.
