Tax Foundation says lower income seniors will be particularly hard hit –
BOHEMIA, NY, Aug 3 – Federal taxes on dividends will rise drastically on January 1 unless Congress and President Obama act soon. The Tax Foundation says that lower income seniors will be particularly hard hit if dividend taxes soar in 2012, as expected, according to Dan Weber, president of the Association of Mature American Citizens.
“Absent decisive and quick bipartisan action in Washington, the top tax rate on dividends will go from 15% to more than 43% at the beginning of the year as part of the tax-the-rich mentality rampant in DC these days. But, the fact is that it will devastate many not-so-rich older Americans who are on fixed incomes and who depend on dividends to supplement their existence,” Weber said.
He urged members of the Association of Mature American Citizens to “bombard their legislators by snail mail, email and phone calls. Be sure to cc President Obama, while you are at it, and to tell them that they need to put politics aside for the sake of this important, at-risk segment of the population.”
Weber pointed to a Tax Foundation analysis that shows seniors with incomes under $29,000 a year receive more than 11% of their earnings from dividends. Those earning $30,000 to $50,000 a year rely on dividends for nearly 14% of their incomes.
“These are not rich people. Depending on where they live in the U.S., they are struggling to make ends meet as it is. Imagine hitting them with the kind of tax hikes that will become reality in just five months’ time.”
There’s another unintended consequence of higher dividend taxes, Weber noted. “The really rich will shift their investments away from dividend paying equities in order to focus on investments that are not taxed as high. In turn, this could force companies to cut their dividends, reducing significantly dividend income for all recipients, most especially senior citizens. It would be a one-two punch for seniors who’d be hit with a simultaneous dividend income cut and a dividend tax hike.”
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 traditional 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.
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i actually do go along with anyone! Bankruptcy http://blog.disbudparkediri.com/?page_id=2
All I can say is, I’m on fix income, and my husband (who works) and I are filling joint tax return. Our combine income is less than 35G. We live frugaly and only shop for food and “necessity” such us medications and some OTC meds. We also do not have health Insurance but we pay out of pocket when we go to those small Clinics when it is absolutely necessary to see a Health Care person.
We have a very little investment, and if our dividend tax will go up, our investment will be spent only on tax instead of supplementing our income .I am praying that this hike will not happen.
If only the Senators, Congressmen,Congresswomen, cut their income by 2%, and if they all give up their Cadillac health insurance to the next lower level that will also help.
And if the use of Airplanes by the Government officials will be limitted, that would help tremendously.If some useless Govt.supported organizations be removed that will even be better.
Furthermore, there are so many things that you see advertise on TV, from Hub Around, Catheters, Blood sugar Testers, to aphrodiiac that they say “it wont cost you a penny, and we will deliver it to your door step free, we will do all the necessary paper works.” My guess is the Tax payers pay for all these. Some of this kind of freeby stuff can be limitted.
I could suggest several more implementable ideas but I know greed will not be easily curtailed.That’s very rampant from the highest government officials to the lowest.
Thank you very much. I am sure I am speaking for others like me.
Who do they think they are talking about when the say…” seniors do not make much on dividends” my guess is that many seiors may have as much as 30% to 40% of their income from dividends. Parted company with AARP many years ago!!!!
You said many years ago.NOW is different. You are out of touch.
hi
Senator Mikulski replied to my letter on policy by saying “We have inherited a terrible mess, our economy is teetering, and we need to work together to get out of it. I think it is important that we work together to address these problems. ”
Blah, Blah, Blah…
I replied and reminded her that she has been in Washington for 31 years and therefore I felt it was not logical for her to state that she inherited anything. She has been part of problem she and many of our senior Senators are responsible for the “mess” this country is in.
You want to send a message……………….Vote the Democratic Senators out.
Then let’s talk term limits.
Wanda, I could not agree with you more, and believe me they will be voted out of their comfort zone!.
you know the old adage…..BURY IT IN YOUR BACK YARD!!!!
Dividend taxation is double taxation in that the corporation paying the dividends have already paid corporate taxes. (together up to 55%)
Seniors no longer can rely on interest income to supplement their income so dividends are essential and 15% should be the tax maximum for us.
The Obama move to tax the wealthy by increasing dividend taxes (among other things) will not only affect the millionaires taxes but will increase the tax burden on all of us who have saved for our retirement.
Wayne