Need to contact your reps if proposed - change dividend/cap taxes

[dex]

Currently all my taxable income is dividends or capital gains as I am sure it is for many who are retired.
If this is proposed by Obama we will need to call our representatives to defeat it. If there was an income level where it wouldn't affect me I would be OK with the change.

That it is being talked about worries me.

Bloomberg.com: Worldwide

"Stiglitz said Obama, who's argued against cutting taxes for upper-income Americans, should also consider rolling back outgoing President George W. Bush's 2001 to 2003 tax cuts as well as taxing dividends and capital gains as ordinary income."

(this is a tax issue; not a political issue - that is why I didn't put it in the soapbox)

[haha]

Quote:

Originally Posted by dex Currently all my taxable income is dividends or capital gains as I am sure it is for many who are retired. If this is proposed by Obama we will need to call our representatives to defeat it. If there was an income level where it wouldn't affect me I would be OK with the change. That it is being talked about worries me. Bloomberg.com: Worldwide "Stiglitz said Obama, who's argued against cutting taxes for upper-income Americans, should also consider rolling back outgoing President George W. Bush's 2001 to 2003 tax cuts as well as taxing dividends and capital gains as ordinary income." (this is a tax issue; not a political issue - that is why I didn't put it in the soapbox)

Bend over folks and get Obamified. Not that you weren't warned.

Yeehaw!

Ha

[ls99]

Quote:

Originally Posted by haha Bend over folks and get Obamified. Not that you weren't warned. Yeehaw! Ha

What magnificent understatement of what we are about to receive..................... via tax policy.

[dex]

This is a tax issue not a political issue.
Over the years, due to the change from company provided pensions to 401K and the reliance on savings more people are relying upon dividends and capital gains income for to meet their expenses. Hitting them with an increase in taxing them along with the stock market decline would be a double punch to the stomach.

In my opinion this is something that must be stopped if it is proposed - that is the time to call your representative to tell them you are against it.

[HFWR]

401k withdrawals are taxed as ordinary income anyway.

As for bending over, pick one:

1. Wealth diminished via higher taxes
2. Wealth diminished via inflation
3. Both

[FIREd]

I am unaware that an increase in the dividend tax has been discussed during the campaign. The long term capital gain tax is supposed to be increased only for people with an annual income above $200K for singles and $250K for married couples. At least that's my understanding.

[haha]

Quote:

Originally Posted by HFWR 401k withdrawals are taxed as ordinary income anyway. As for bending over, pick one: Wealth diminished via higher taxes Wealth diminished via inflation Both

I'll take inflation. Though that automatically increases real tax rates.

Ha

[Zathras]

Quote:

Originally Posted by dex In my opinion this is something that must be stopped if it is proposed - that is the time to call your representative to tell them you are against it.

Why even mention it since it hasn't even been mentioned by the incoming administration much less proposed?
That is like saying 'we must call our reps in congress to defeat any proposal to tax everyone at 80% flat tax, if such a thing is proposed'

[FIRE'd@51]

Quote:

Originally Posted by FIREdreamer I am unaware that an increase in the dividend tax has been discussed during the campaign.

How can you be unaware of this? The Bush tax cuts included preferential rates for dividends as well as LT cap gains, so eliminating those tax cuts will automatically raise taxes on dividends since they would become ordinary income once again.

Quote:

Originally Posted by FIREdreamer The long term capital gain tax is supposed to be increased only for people with an annual income above $200K for singles and $250K for married couples. At least that's my understanding.

That was my understanding, as well (at least that's what Obama told us). And he also said the tax rates on dividends would remain the same as they are today for folks with incomes below the limits you posted.

[bubba]

Now I can't remember where I read this, but one day last week I read that the idea of increased tax on dividends was being considered as part of the tax reform package. In fact, I believe the rate thrown out was 30-40% and Charlie Rangel was involved in this discussion. Since I can't even remember where I read this, I certainly can't tell you if it was a reliable source. Honestly, I am expecting increased taxes on virtually all income. I will be calling my congressman to object to every tax increase I hear about unless it comes with a corresponding spending cut (or at minimum a freeze).

[2B]

All you selfish people should be ashamed of yourself. Did you think that wealth could be redistributed without higher taxes on those of us who were foolish enough to try to save for our future?

[unclemick]

Quote:

Originally Posted by 2B All you selfish people should be ashamed of yourself. Did you think that wealth could be redistributed without higher taxes on those of us who were foolish enough to try to save for our future?

Especially married people - us single guys are really getting screwed. Think about it!



heh heh heh - and I am now getting hosed on SS being taxed. Get those rich people - especially those catagories that DO NOT include me.

[Bikerdude]

I think you have to understand how Obama and the democrats think. Someone with a $24,000 per year pension is poor. Someone with $600,000 and no pension is rich. Savers beware, their coming to get you.

[2B]

Quote:

Originally Posted by Bikerdude I think you have to understand how Obama and the democrats think. Someone with a $24,000 per year pension is poor. Someone with $600,000 and no pension is rich. Savers beware, their coming to get you.

Is it annuity time?

I'm only half serious but way back when our tax code was so onerous that it made sense to have an annuity. It's a shame when bad tax code drives people towards bad investment decisions. Does anyone remember the great limited partnership collapse? They only existed to avoid taxes. After that was removed, the poor investment that most were came quickly to light.

[dex]

Quote:

Originally Posted by Zathras That is like saying 'we must call our reps in congress to defeat any proposal to tax everyone at 80% flat tax, if such a thing is proposed'

It is like saying if a Nobel Prize-winning, Columbia University Professor, writes about it in the Washington Post we should educate ourselves about it and be prepared to act if necessary. If we wait until it is in a tax bill to understand how it could negatively affect economically struggling people; it might be too late.

[Gone4Good]

Quote:

Originally Posted by dex This is a tax issue not a political issue.

It's hard to talk about taxes without talking politics because the two are almost inexorably linked.

Having said that, it is not completely clear to me why we should have a tax code that favors capital over labor, as ours currently does. It seems to me the best tax policy would be the one that creates the least amount of economic distortion. If that were your objective, you'd want all sources of income to be treated the same.

[FIREd]

Quote:

Originally Posted by FIRE'd@51 How can you be unaware of this? The Bush tax cuts included preferential rates for dividends as well as LT cap gains, so eliminating those tax cuts will automatically raise taxes on dividends since they would become ordinary income once again. That was my understanding, as well (at least that's what Obama told us). And he also said the tax rates on dividends would remain the same as they are today for folks with incomes below the limits you posted.

So in other words, he would roll back the Bush tax cuts only for those folks making $200K+ for singles and $250K+ for married couples, If I understand correctly. People making less should see their taxes stay the same or go down according to this:

Barack Obama and Joe Biden: The Change We Need | Taxes

How many of you FIREes make above the $200K/$250K a year

[Notmuchlonger]

Quote:

Originally Posted by 2B All you selfish people should be ashamed of yourself. Did you think that wealth could be redistributed without higher taxes on those of us who were foolish enough to try to save for our future?

Sorry what was I thinking. I slapped myself 20 times as penance. Im pondering rolling over all the retirement accounts to annuities...

[Gone4Good]

Quote:

Originally Posted by unclemick Especially married people - us single guys are really getting screwed. Think about it! heh heh heh - and I am now getting hosed on SS being taxed. Get those rich people - especially those catagories that DO NOT include me.

Yup. You're doubly screwed if you don't have kids. Not only do you get to pay extra income taxes to subsidize all those child care & dependent deductions, but you also get to pay school taxes even though you don't have any kids in school. What a bunch of socialists all those parents are.

[Gone4Good]

Quote:

Originally Posted by FIREdreamer So in other words, he would roll back the Bush tax cuts only for those folks making $200K+ for singles and $250K+ for married couples, If I understand correctly. People making less should see their taxes stay the same or go down according to this:

Yup, this is what he said. Higher dividend & cap rates wouldn't apply to those lower income earners. That was his plan. But remember, he was elected president, not anointed King. There is a House & a Senate that will have some say in whatever policy is ultimately passed.