Obama proposes to tax Dividends up to 64%

Melensdad · Feb 22, 2012

The media is trumpeting the Obama proposal to "lower" the corporate taxes but in fact it doesn't look like that is the truth.

In fact if you are over 55 years old then bend over because its very likely you are getting SCREWED. According to the IRS, almost 75% of all dividends are paid to people over the age of 55 and well over 50% of dividends are paid to retirees over the age of 65 years old. Yup, its the small investors who invested in dividend producing stocks for their retirement, and count on that income, who are going to get screwed. But its likely you won't hear that in the media, its just an inconvenient detail.

. . . dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1% . . .

. . . the White House wants everyone to know that this new rate would apply only to those filthy rich individuals who make $200,000 a year, or $250,000 if you're a greedy couple. We're all supposed to believe that no one would be hurt other than rich folks who can afford it.

The truth is that the plan gives new meaning to the term collateral damage, because shareholders of all incomes will share the pain. . .

. . . all American shareholders would lose. Higher dividend and capital gains taxes make stocks less valuable. A share of stock is worth the discounted present value of the future earnings stream after taxes. Stock prices would fall over time to adjust to the new after-tax rate of return. And if investors become convinced later this year that dividend and capital gains taxes are going way up on January 1, some investors are likely to sell shares ahead of paying these higher rates.

The question is how this helps anyone. According to the Investment Company Institute, about 51% of adults own stock directly or through mutual funds, which is more than 100 million shareholders. Tens of millions more own stocks through pension funds. Why would the White House endorse a policy that will make these households poorer?

Seldom has there been a clearer example of a policy that is supposed to soak the rich but will drench almost all American families.

http://online.wsj.com/article/SB100...25493025537660.html?mod=WSJ_hp_LEFTTopStories

FrancSevin · Feb 22, 2012

That will create lots of new jobs,,,NOT!
Dividens are the motivation for the creation of capital pools.

I guess they don't teach that at Havard or Columbia University.

squerly · Feb 22, 2012

What an ASSWIPE. Count on me to join the Going Galt club. I guess Obama can feed my 13 employees when they end up unemployeed. What a friggen clown.

Kane · Feb 22, 2012

Maybe Obama can learn from the Brits. Their new 50% corporate tax just proved to be a revenue enhancing bust. Called Laffer's Curve of diminishing returns. I think they study it at Harvard, but maybe Barack was out that day busy organizing a community.

Melensdad · Feb 22, 2012

Kane said:
Maybe Obama can learn from the Brits. Their new 50% corporate tax just proved to be a revenue enhancing bust. Called Laffer's Curve of diminishing returns. I think they study it at Harvard.

STORY HERE => http://www.telegraph.co.uk/finance/...9/50p-tax-rate-failing-to-boost-revenues.html

Funny you should bring that up. I'm trading emails with my family in England and they are considering moving to IRELAND because they will save $40,000 a year in taxes!

There are also telling me that the UK is considering a temporary moratorium on the VAT tax to stimulate purchasing.

tiredretired · Feb 22, 2012

After 3 years he gives us this? O'Drama does not have a plan, he has a political agenda. Jeez, I wish Mak2 was still around, I would love to hear his explanations for this. :yum:

FrancSevin · Feb 22, 2012

TiredRetired said:
After 3 years he gives us this? O'Drama does not have a plan, he has a political agenda. Jeez, I wish Mak2 was still around, I would love to hear his explanations for this.

Why?
You are suggesting perhaps,,,they would make sense now? :yum:

300 H and H · Feb 23, 2012

Gee,

I hate to bring this up, but Regan had the capital gains tax at 36%, the same as the highest rate of income tax, after he cut this top rate income tax rate to 36% as well. Since then we lowered the cap gains rate to 15%, and the Government deficits have been growing steadily ever since. Unfortunately at our current level of spending, it makes little or no difference. But it could be argued that for many years the wealthiest amoung us have not been paying enough to fund many years worth of government spending. The lower rates attracted votes for election time, but did little to fund the growing gap. Multiply this effect, poloticians giving tax breaks for re election, by 7 or 8 election cycles, and you get what we have. Tax rates that aren't high by ANY historical standards at least since WWII, and a large debit left to pay. It's just not a good time to raise taxes right now, but there is a need. Of course cutting spending is the first thing to do. But to ignor the other side of the balance sheet is not the right thing to do either, with the size of the problem we now have...

By lower Corp tax rates to the point suggested, I wonder if some money earned outside the USA may come home?? I have read that some bussiness leaders have suggested if the corp rate were low enough something like 40 billion dollars could come back to the USA and be put into the domestic economy. So I wonder if this has something to so with this?
Regards, Kirk

Kane · Feb 23, 2012

300 H and H said:
Gee,

By lower Corp tax rates to the point suggested, I wonder if some money earned outside the USA may come home?? I have read that some bussiness leaders have suggested if the corp rate were low enough something like 40 billion dollars could come back to the USA and be put into the domestic economy. So I wonder if this has something to so with this?
Regards, Kirk

That is the goal. It's called repatriation of capital. And actually, the number is probably in the trillions.

Corporate tax rates, if you think about it, should be zero, with the make-up in the personal income tax rates for the zillionaires. Because a tax imposed upon a corporation is simply passed on to the consumer as a cost of the work, or the cost of doing business. Bad for everyone, but particularly detrimental to keeping jobs in America.

Personal income taxes actually make it into the government coffers ... to be mis-spent and mis-managed by the government.
.

JEV · Feb 23, 2012

None of this tax banter will make any difference at the polls in November. The Kenyan has aided in getting up to 45% of the population on the gubmit tit in one form or another, and with the infighting in the GOP sending votes to such bizarre candidates as the Green Party, Barry is almost assured a shoo-in for a second term. I'm thinking of shutting down my business and joining the ranks of the unemployed collecting food stamps. I'll get a doctor to say I have a bad back prohibiting me from working, and start collecting social security disability like half of the inner city adults do. I've scaled back my lifestyle before, I can do it again. This working and paying taxes is shit for the birds. It's time to live the high life and let some other putz take care of ME!

300 H and H · Feb 24, 2012

Fine attitude to take, but it doesn't solve the problem at all. The problem is one of time and vote mongering. Over the years and election cycles, we have in effect been bribed by lower tax rates, in order to "buy" votes. Those poloiticians they made this work, and hid this tid bit under their hats...To be used again over and over again. Times were good, and tax revenues were high. But spending for more votes from the poor were a good thing to do for votes as well. Promises made and kept, in this case. So for many years now we have lowered taxes on the wealthy, and at the same time increased spending on the poor. All the while the middle class got nothing but the same old tax rates and bills. Lower taxes and increased spending, buying our votes along the way....Paid for by the middle class. But not minding the guages and switches of the economy. This I feel is how we got to the place we find ourselves today...

How we get out of this is the real question, that needs answering.

Regards, Kirk

Obama proposes to tax Dividends up to 64%

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator

FrancSevin

Proudly Deplorable

squerly

Supported Ben Carson

Kane

New member

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator

tiredretired

The Old Salt

FrancSevin

Proudly Deplorable

300 H and H

Bronze Member

Kane

New member

JEV

Mr. Congeniality

300 H and H

Bronze Member