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Retirees Will be Hurt Most by Dividend Tax Hike, Says AMAC

‘Even if you don’t own dividend paying stock directly, income from other supplemental investments could be sharply reduced.’ -

BOHEMIA, NY, Dec 7 – Older Americans – particularly lower income seniors – need to brace themselves for a potentially sharp drop in earnings in 2013 if President Obama has his way and hikes taxes on dividend income, according to Dan Weber, president of the Association of Mature American Citizens – the conservative alternative to AARP.

“Even if you don’t own dividend paying stock directly, income from other supplemental investments could be sharply reduced.”

Dividend taxes will rise from 15% to nearly 40% under the administration’s current proposals “under the guise of forcing the rich to fork over more of their earnings to fund the government,” Weber said.  “The only problem is that it’s the nation’s retirees who will suffer most of all.”

According to analysts, nearly half of seniors aged 65 and over receive dividend income to supplement retirement benefits.  A Federal Reserve survey of consumer finances shows that retirees earning as little as $29,000 a year depend of dividends for 11% of their earnings and those earning between $30,000 and $49,000 a year rely on dividends for as much as 14% of that income.

“So, it’s not the rich who will suffer, it is those who can least afford the new taxes.  In addition, if companies start relying on traditional solutions to higher dividend taxes, they will begin reducing their payouts.  Again, it is those living on fixed incomes who will feel the pain,” Weber pointed out.

“Investors in the higher brackets will, in fact, benefit because, by reducing and/or cutting dividend payments, the valuation of the stock they own will likely increase.  Bear in mind that rich investors can wait for the valuations to increase while the seniors who own the same stock need the quarterly dividend checks to sustain their lives,” he explained.

How far reaching will a rise in dividend taxes be?  According to a new Ernst & Young study for the Edison Electric Institute released earlier this week: “Raising taxes on dividends would harm every American who owns dividend-paying stocks, as well as anyone who has an interest in a mutual fund, 401(k) plan, pension plan, or life insurance policy that invests in those stocks.”

NOTE TO EDITORS: Dan Weber is available for telephone interviews on this issue.  Please contact John Grimaldi at 917-846-8485 or [email protected] to set up a chat.

ABOUT AMAC

The Association of Mature American Citizens [http://www.amac.us] is a vibrant, vital and conservative alternative to those organizations, such as AARP, that dominate the choices for mature Americans who want a say in the future of the nation.  Where those other organizations may boast of their power to set the agendas for their memberships, AMAC takes its marching orders from its members.  We act and speak on their behalf, protecting their interests, and offering a conservative insight on how to best solve the problems they face today.

About The Author

Daniel C. Weber founded the Association of Mature American Citizens in the summer of 2007. Dan Weber sees AMAC as a way to unite citizens to defend our American way of life. To enrich the lives of AMAC’s members, Weber has assembled a package of benefits and discounts for Americans 50+ that they can get nowhere else.

More Articles by Daniel C. Weber

Comments (72)

  1. John says:

    I’m hearing over and over on these pages, OUR ONCE GREAT COUNTRY, someone please tell us how to get back there. Not only tell us, but show us the way. Can we expect that here with-in A.M.A.C. ?

    • Jim McCraigh says:

      2014 elections! All of us over 55 MUST VOTE those clowns who would vote to tax retiree dividends out of the Congress and tie Obama’s hands! If we don’t ALL turnout well then… forget it. We all did not vote last November…

  2. John says:

    I have worked all my life and paid into S.S., Medicare, Fed, State, Local, all the req. . I saved in a 401K, and later in a IRA. I was under the impression I was building, or at least partially building my retirement. Not further funding Gov’t assistance for the next- gen. or the young wanting to live on assistance. And we get a President (term used loosely), he is not my President, that increases assistance to the young able bodied, off the backs of people like myself. I will take my IRA out this year and pay 15%
    taxes instead of a possible 25-40% next year, and stop earning dividends to which I would willingly support bad behavior of this administration. I will further explore ways to stop funding a defunct and ill run government. I’m 62 and more and more willing to quit working and stop paying taxes. Maybe see if i qualify for some of the gov’t.-assistance hand-outs, I’M THINKING I WON’T !! I’ll find that I fall just outside the GOV’T GUIDELINES for assistance. Also, I get no thank you, from the young-gen., for my lifetime of hard work to fund these programs that will carry them through their wasted lives and my wasted time and money. THANK ME, VERY MUCH.

    • PaulE says:

      If you have any savings, you likely won’t qualify for any government assistance. Of course, the government can always elect to copy what Argentina, another bastion of socialism did, which is nationalize the IRAs and other such retirement accounts. All in the name of “fairness” of course.

    • scott meth says:

      THE AMERICAN CITIZEN HAS TO WORK THEIR WHOLE LIFE AND AFTER PAYING IN TO THE SYSTEM HOPE TO GET THERE BENEFITS AT 62 OR 66.THE ILLEGAL ALIEN OR WELFARE LEECH OR PARASITE WHATEVER YOU WANT TO CALL THEM GET BENEFITS STARTING AT AGE 18 WHEN THEY CREATE 6 KIDS WITH 5 DIFFERENT BABY DADIES OR COME TO THIS COUNTRY ILLEGALLY. FREE RENT (SEC EIGHT ) FOOD STAMPS FREE CHILD CARE UTILITIES CELL PHONE AND MONTHLY STIPEND.THEY GET THESE BENEFITS THEIR WHOLE LIFE AND THE TAXPAYER HAS TO FUND THESE LEECHES.WHAT DOES THE TAXPAYER GET FOR PAYING FOR FUNDING ALL THESE FREEBEES HIGHER TAXES AND 1 PERCENT INTEREST ON YOUR SAVINGS ACCOUNT I THINK WE WERE ALL DUPED BY OUR GOVT.

  3. Bernie S says:

    Who has caused this Great Country of ours to be in such poor financial distress? You and me. I don’t think so. It is our very leaders that we have elected. The Congress and the President of the United States are the ones who have created this mess. And how do they plan on correcting this mess. They are penalizing the good, hard, working middle class. We are the heart and soul of our Country. Destroy us and this Country will be destroyed. Most of the people who voted for Obama give nothing back to this Country. All they want to do is take from the people who work hard and are proud to be Americans. This election proves one thing. There are more voters who are freeloaders than there are working class voters. We are doomed until we can get every decent, working class American to the polls and vote the current regime out of office. God Speed The United States Of America.

    • MaryAnn says:

      “destroy us and the country will be destroyed”

      That’s what has already happened. Lower interest rates on CD savings came almost completely at the expense of local economies. Seniors who used to get that interest eat at local restaurants, go to local cultural events, spend their money on the grandkids. When that spending goes down, local businesses pay less taxes. Thus, the ‘neighborhood” becomes less interesting, less safe, and less able to attract the spending money they still have. So, the money that’s still left for spending is more likely to be spent on cruises and casinos instead. Multiply that effect by these “tax the rich” schemes….that money will come directly from local spending.

      And we have no control over it. The “Republican-conservates” in the HOR are useless. How else can you you explain Boehner still being in a position to negotiate? As far as I’m concerned, Boehner’s caving on the debt ceiling along with Roberts crazy cave on ObamaCare are a bigger problem than is Obama. Obama did what we expected; our pretend conservatives continually let us down.

      • T Charles says:

        MaryAnn,

        Bravo! Way too many RINOs. We’ve been dumped by the democrats and the would-be democrats a/k/a republicans, and have no stalwart conservative representation except, perhaps, the Tea Party. A pity!

    • Gary says:

      I am sorry but you will not be able to vote them out as long as George Soros is counting the votes. Electronic voting will cause the demise of our great Republic for it gives the elites a way to rig every election, and how can you prove it isn’t so. Promote paper ballots at least.

  4. Granny says:

    I voted , but why?? He was elected before my vote was even counted.

  5. David D, RN says:

    Carol Durand says:
    12/08/2012 at 11:05 am

    “What are the Obama followers going to say when we are ALL overtaxed and ALL are affected by the schemes to turn our America into a completely socialist country?”

    Carol, the answer to your question is, they will say that the conservatives are the reason that things are going badly because the conservatives treated The Prescious badly and didn’t give Him the support that He deserved because conservatives are all racists and the ONLY reason ANYONE would not humbly obey The Precious is the color of His skin. And the faithful will beleave this because they know that all conservatives are full of hate and only care about the rich and privileged 1%.

    Do you think that I am exaggerating? I am not; I am being dead serious. How do I know? Is it because I can predict the future? No, it is because I remember the past. The Precious’ excuse for His miserable incompetence has been that all of His problems are Bush’s fault (“I inherited the worst economy since the Great Depression caused by the failed policies of George Bush and blah, blah, blah, blah. . . “) He will probably not blame Bush quite as frequently as He has in the past, but no worries. He will have the Republicans to blame. And that will keep The Faithful content.

    I am being a little whimsical in my language, but I am serious about what his tactic will be. It will be the same tactic that he has always used. And those groveling clowns who call themselves journalists will repeat it and the people will beleave it, just as they have for the past four years.

    Someone please tell me that I am writing. I want to be wrong! But I’m not.

    • Raymond says:

      I believe if hard working Americans stop paying their taxes. I mean just adjust your W4 to show more dependents we will be paying less withholding and give the gov’t less cash flow. We can then tell them that we are not willing to pay outrages taxes to support the non workers. then file for tax filing extensions until the following October. The cash flow will dry up. What can they do but adjust spending down to the level of income like the families have to do. The only way we can protest is to cut off their income. Even the 16000 new IRS agents won’t be able to keep up collections.
      Next we need a massive protest march in DC to tell them shape up or you will be taken out in the primary next election. We the people have to begin to take matters into our hands or we are all doomed.
      Start to protest to the advertisers that run on the main stream media such as ABC, NBC, CBS, CNN and MSNBC. Right now the only way to defeat them is by money ours that we won’t spend on their products.
      I have never believed in boycotts but now its for our survival.

      • PaulE says:

        What you’re describing by fudging your number of dependents won’t work. It’s called tax fraud and the IRS always wins. First the IRS will either slap you with a fine or seize your property for back taxes. So the IRS will get the money owed one way or the other. Remember the way the IRS works is you’re guilty until you can prove you’re innocent. One of the many wonderful things about how the IRS was structured.

        The second point is that by 2014, if Obama moves as fast as I expect he will, elections will be largely symbolic events. Just like in many other socialistic countries. Everyone knows the leader and his minions will win re-election. The only issue is how big the “landslide” will be. By 2014, Obama will have instituted so many regulations and done so many end runs around Congress, that he will have made himself essentially an unaccountable ruler. Just look at all the executive orders and appointments he’s done in the last four years. Do we really have any idea what those 32 czars he appointed are busy doing every day. The EPA, HHS, NLRB and other federal agencies were holding back on literally thousands of new regulations until after the election. They admitted to such before Congress. All those new regulations are slated to start rolling out starting January 21.

        As for “telling them in Washington to shape up”, who are you referring to? The Democrats are happy as hell right now, so there is no incentive for them to change. Their voter base are the people who cast votes based on who hands them a free Obama phone or additional food stamps. As for the GOP leadership, they are busy purging any conservative who doesn’t agree to tow the party line of being “more moderate” (Democrat-lite) in their voting pattern. So who are you hoping to influence in Washington these days? I get that you’re rightfully concerned about where the nation is going, but we need something a lot more powerful than what you’re suggesting. I just don’t know what that is at this point. Maybe some from AMAC can suggest a more prudent course of action we can take.

      • Milt Meisner says:

        Sounds like a great idea, however, the flaw is that the libs govt. will BORROW MORE MONEY, instead of cutting back.

      • T Charles says:

        Raymond,

        Right on! We need a list of advertisers to boycott NOW! Then, let’s see if the “takers” can support the main stream media and its financial supporters. The sooner, the better.

  6. Edward Parker, Jr., MD says:

    Howard Dean, former governor and presidential aspirant, admitted recently that everyone’s taxes need to be raised. He is the only public Democrat figure to tell the truth about what the Democrats really want to do. I fear many Republicans in Congress have become used to big government and, like Democrats, cannot imagine reducing the size of any programs let alone eliminating any government programs.

    • PaulE says:

      Yes, I’m sure Howard dean received a less than friendly phone call from Axelrod after his appearances on CNN, CNBC and MSNBC letting the truth out of the bag before the White House is prepared. Dean was even smiling about it, when he was mentioning raising taxes on everyone.

  7. Tenorgirl says:

    It is very disheartening to know that our representatives in congress know how we feel but don’t care. They only care about getting re-elected so they can continue to collect their ballooned salaries. I was listening to CNN this week and they talked about the reductions that will have to be made by those collecting Social Security but never once mentioned the people on welfare having to take a cut in their benefits or paying taxes on the money they get. These people have never paid into the system but believe they are ENTITLED to more money than most people who are working. There is really only one way out of the mess our legislators have gotten us into and that is to stop giving our resources away and start running our country like all households -

  8. Leonard Uecker says:

    The election was lost through the “dumbing down” of the electorate. Two groups elected Obama, the freeloaders and the fools.

  9. Dan Brintnall says:

    Obama doesw need to go but Im afraid we are stuck with him and his liberal ways Our country is no longer the the same U S A I grew up in. Remember in the last election half of the voters did not want obama so if I was him I would not feel to good about 50% of the people not behind him All this liberal thinking only want to take away our rights given to us by the constitution and make us slaves to a socialist government Ask any high school student if he or she is studying the constitution and you will be surprized with the answer. Our future will be full of a generation of people who will not know when the government has taken away all their rights and freedom. All their thinking will be done for them.The future will be spelled out for them. Im on social security and barely get by now they want to reduce it so they can have more to spend and put more into their and friends pockets with their pet probjects I have worked since 1966 and contributed my fair share to help support social security so I DEMAND that they leave us retired workers alone I earnedthis money and it is my right to collect my share a fair share untill I die We need to take back control of our government and once again have a government BY the PEOPLE ,and FOR the PEOPLE …………

  10. Darold Bouche' says:

    At the end of the day yours and my kids probably re-elected the government leaders for the next 4 years. Stop whining and just bend over.

  11. Shirley Warren says:

    Please help us fight Obama on taxing our dividends any more than they are. That’s what we depend on to carry us over with our Social Security.
    Obama just needs to quit spending and quit going on vacations that cost the taxpayers. He needs to get rid of 2/3 of his Cjars as well as Michelle learning how to do a few things on her own. She’s the only Presidents wife that has had to have so many people waiting on her…..this includes her two daughters on the payroll.We truly need to get Obama out of the W H before the inauguration. It’s the middle class that gets the slaughtering and we can’t afford to keep everyone going when most of us are lagging ourselves financially. This guy has got to go before we have just the rich and the poor.

    • PaulE says:

      Sorry Shirley, but we’re stuck with Obama for the next four years and all the negative consequences that entails. The American people had a chance to end this nightmare on November 6th, but instead opted to give him another four years to finish trashing the country. Unfortunately, there are more idiots out there that believe in his hope and change nonsense, that is merely thinly veiled class warfare and envy politics, than there are people who realize what is necessary for this country to get back on the right track and put 23 million people back to work. Now we just have to live with the consequences as best as we can. It won’t be easy, but there is no other option. No one is going to swoop in and save us from Obama at this point. Just do the best you can.

  12. David D, RN says:

    Carol, in her post (above) asked, “Is an “Obama-phone” and a free ride worth forfeiting the America we once were proud of?” The bulk of our fellow citizens have given their answer; “yes! America? Who cares, just shut up and give my phone!”

    Thomas Jefferson once commented that no law or document can preserve a peoples’ library, not even our magnificent constitution. The only thing that can preserve liberty, he said, is a population of free citizens who are prepared to fight for their freedom at any cost. That generation is passing into memory and being replaced by a generation of Americans for whom the hard and uncertain path of liberty is just too much trouble. After all, free men and women must work hard and steward their resources wisely so that they can handle life’s inevitable trials, like the need to plan how to pay for medical care when a family member became ill. It’s unfair to expect me to have to do that.

    No, no; that is hard. All generations before us did it, but for me to do it will be hard, and won’t let me pursue my every whim and self-serving desire. Besides, anything that I need or want automatically becomes “a right,” and it’s just not fair to expect me to actually exert myself to enjoy my rights. Others should lay all I need in my lap. Just be sure to bring them to me quickly and lay them in my lap gently, lest you violate my newly contrived “right” to be free of any burden or responsibility.

    • PaulE says:

      Very well said!

    • getitright112 says:

      You have said it well. Funny thing tho, I have some family on SSI and mixed racial that would not vote for Obama on a bet. Some people just did not vote for Romney after his remarks about everyone who gets a government check being (to paraphrase) leeches. They sort of felt after 40-50 years of hard work paying into soc. sec. that it was not just an entitlement. It upset me but I voted against Obama so i voted for Romney. I think he might have been good for this country even if he seems to have no clue about the blue collar crowd or even white collar that is not in his pay bracket. Obama is slick & managed to recover from his mistakes in the campaign by what ever means it took. And those who care were out voted by those without a clue.

  13. Old Papa says:

    SOCIALISM ! It works great for the very rich and the very poor. It eventually turns the middle class poor. Then the government runs out of other peoples money. “Revolution” Repeat.

    God……. Please bless America and help us survive Obama.

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