This is a good example of why we should discuss this now. The professor did not reference Obama's plan. But Obama is not for the extension of the 2001, '03 changes - he would allow them to expire. The professor wants them changed before they expire.
This is what the 2001 & 2003 changes did:
Tax Cut Pays Big Dividends
Lower taxes on dividends and capital gains
- The long-term capital gains rate is now 15 percent for sales on or after May 6, 2003. The old rate was 20 percent.
- Dividends are now taxed at the new long-term capital gain rates instead of at your ordinary income tax rate, retroactive to Jan. 1, 2003.
- For people in or below the 15 percent ordinary income tax bracket, the new long-term capital gains rate is 5 percent and goes to zero after 2007.
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As you can see by eliminating these changes, the poor (15%) are hurt - I would be hurt.