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.
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.