Income Tax Rate 2011

[meierlde]

Based upon the Senate Budget committee plan the rate on dividends and cap gains will only increase if your total income is over 200/250k.

[clifp]

As I feared the intentions of keeping the dividend rate the same as capital gains, and the budget are conflicting.

From todays WSJ

The important quote.

Quote:

Washington's perverse revenue estimation rules also increase the policy bias toward higher rates. The dividend increase to 39.6% (from 15%) is built into current law as the Bush tax rates expire, and so the current budget baseline assumes that revenue increase of roughly $200 billion. This means that any rate increase lower than 39.6% "costs" the government money under budget rules, and thus Democrats must come up with some offsetting tax increases or spending cuts to make up for the lost revenue. So under this Beltway math, even a dividend tax rate increase to 20%, or 28%, counts as a revenue loser. All of this increases the likelihood that the Senate budget resolution dividend tax rate of 39.6% will become law next year. The millions of Americans who receive dividend income—most of them not rich— need to begin adjusting their investment strategy accordingly. And don't forget those Obama campaign promises from 2008. ]

[RonBoyd]

Quote:

Originally Posted by Zarathu the feds actually owed me $455.

Your taxes for the year was a negative amount? Cool.

[kaneohe]

Quote:

Originally Posted by clifp As I feared the intentions of keeping the dividend rate the same as capital gains, and the budget are conflicting. From todays WSJ The important quote.

I didn't read the wsj article (didn't want to register) so I couldn't tell if this quote was confusing or misleading. I have the feeling from clifp's opening statement and the following quote from an accompanying wsj? article that it is misleading since it omits (I think) the use of the word "maximum" when accompanying "dividend rate". ...... so dividends will simply be taxed as ordinary income at your (whatever it is) tax rate, not necessarily at 39.6%.
Perhaps the original wsj article did include that word so the quote above is just out of context.

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If Congress doesn't act, this reclassification will lapse at the end of 2010, and next year the top dividend rate would automatically revert to 39.6%
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