July 18, 2012 Leave a comment
Oddly enough, I own a good number of shares of Dominion Power stock (short version: I inherited them). I was intrigued to receive a letter last week telling me to contact my member of Congress to make sure my taxes on dividends do not go up. Of course, I do think those taxes should go up, but I didn’t actually know anything about it. Via Wonkblog:
The Democratic leadership on Capitol Hill rushed to unite behind President Obama’s proposal to pass a one-year tax cut extension for household incomes below $250,000. Rep. Nancy Pelosi and Sen. Chuck Schumer quickly dropped their call for a $1 million threshold for tax cuts, and Senate Democrats are now pushing for a one-year tax cut extension with a $250,000 cut off that could come up for a vote as soon as next week.
But there is one key difference between the Senate Democrats’ plan and Obama’s: Senate Dems want a tax of 20 percent on dividend income for 2013, according to details of the plan provided by a Senate Democratic aide. That’s higher than the current rate of 15 percent under the Bush tax cuts, but it’s lower than what would happen if the Bush tax cuts simply expired. Obama, by contrast, allows the Bush tax break on dividends to expire entirely: In his 2013 budget, investment income would be taxed as ordinary income, which means the tax rate could rise as high as 39.6 percent.
Of course, my marginal rate isn’t getting anywhere near 39.6 anytime soon so I’m just fine with America’s wealthiest paying their fair share on their tax dividends and I suppose I’ll owe a fairly modest amount more.