On Wednesday, the nonpartisan Congressional Budget Office (CBO) issued a dire warning that the nation’s economy would be plunged into a significant recession next year unless President Obama and Congress take action to avert tax hikes set to take effect in January—including a steep tax hike on dividends.
The Edison Electric Institute’s (EEI’s) Senior Vice President Brian Wolff made clear that the new nonpartisan report echoes what has been said by tens of thousands of seniors and other hardworking Americans who have called on Congress — through the Defend My Dividend campaign — to stop a dividend tax hike for all Americans.
“Today’s nonpartisan CBO report spells out in grim detail what’s at stake,” Wolff said. “If Congress and the President don’t act soon, the tax rates on dividends will spike by nearly 190 percent—from a top rate of 15 percent today to roughly 43 percent next year. This alarming increase would squeeze the already tight budgets of millions of seniors and hardworking Americans, and would slow job creation, hindering our nation’s economic recovery.
“With so much economic uncertainty and concern right now, lawmakers should act quickly to extend the current dividend tax rates for everyone for one year and enact comprehensive tax reform next year.”
The Defend My Dividend campaign Web site—www.DefendMyDividend.org— enables Americans to join the fight to stop a dividend tax hike now.
- According to an analysis of 2009 IRS data by Ernst & Young, 63 percent of all tax returns with qualified dividends were filed by taxpayers age 50 and older, and 32 percent were filed by taxpayers 65 or older.
- Raising dividend tax rates for one year—without any sense of what will happen to rates in the future—will shake investor confidence and discourage capital formation and long-term investments in projects that create jobs.