Question on dividends and capital gains

[Value Buy]

We have all heard of the impending government fiscal cliff and the fight over taxation of dividends and capital gains.
My question is this.

If you are not part of the taxpayers making $250,000 a year, will your capital gains and dividend taxation rates also increase, or will it remain at the lower level we currently pay?

My understanding is everyone will pay the proposed new rate.
Does anyone have any knowledge of this issue?

[Deleted]

We have been advised to the Best of Our C.P.A.'s knowledge that the proposed increases on Capital Gains and the Elimination of Qualified Dividend - is across the Board.
The Proposed new 3.8% Medicare Tax is as far as he knows though only applicable to folks making over $250,000.00 Per Annum.

Now what ends up actually being the Case is still unknown & is the subject of all the Debates, arguments and the "everyone is screwed" news articles.

Even still though IF Qualified Dividends go away and all Dividends are Taxed at Ordinary income Rates, those Taxes will be Cheaper than Capital Gains.

[Value Buy]

Thank you.
I find it very interesting that the Dems consider Dividends as a haven for the very rich, and this will affect the common people and retirees immensely.

[ModE98]

Why not just apply the dividend tax increase on the over $250,000 class as well. Indeed many in the lower income (retirees, etc.) depend in dividend income to supplement social security and other modest retirement pensions. It will reduce spending and put less discretionary money out in the economy, I believe. Regardless of all the talk of protecting the "middle class" we always are the one's getting screwed.

[mwcpa]

"I find it very interesting that the Dems consider Dividends as a haven for the very rich, and this will affect the common people and retirees immensely."

Actually, the "Dems" proposal from the President keeps the Bush era rates in effect for married couples those making under 250K (200K for a single person).... if the cliff is gone over then all pay higher taxes... and with Dems and Reps not agreeing on much these days that is a possibility....

[mwcpa]

"As pointed out in this thread, the hike on dividends will impact all."

If we go over the cliff.....and Congress seems to be wanting to work in the last 5 weeks of 2012 (the only time they will work during their 2 year stint, except to debate steroids in baseball or women's reproductive rights, and other important social issues of the day... sarcasm), so we may catch a break

to be "taxed" at the 39.6% rate ones taxable income must exceed 288K (that's what it was in 2000, but I expect when the rates are published, if we go over the cliff, the 288 will be indexed for inflation and be over 300K of taxable income)

so, MOST will not pay anywhere near 39.6%....

"The REALITY of taxing the rich is that it ALWAYS ends up biting the ass of the "little people". "
And trickle down does not work either.... giving the rich a tax gift has not created to maintained jobs since 2008.... or did taxes not have anything to do with it.... you cannot say tax decreases create jobs, except for... and then say tax increases will kill jobs.... kind of like having your cake and eating it too....

It seems to me, other than the 250K number being "rich," the President's proposal to creep rates back up a little on the "rich" is not a bad idea... but I believe as an added extra that as the economy improves a little rate creep is needed on all, so we can address the debt, build a reserve for bad times, etc. (and cut spending too, by limiting the time able bodied people can be on welfare, restructuring social security by creeping the full 'retirement age' for younger people who will live much longer than the average person when the plan was established, I do not think the powers that be ever expected most people to collect social security for 25, 30, 35+ years, etc)

[Trongersoll]

I have to scratch my head when people seem to be at a loss as what to do about the cliff. Some seem to think they should get out of the market all together. I'm not sure where they think they are going to go. When all is said and done, if you have more money after your investment or dividend than you did before, regardless of tax rate, you made money and came out ahead. Are people really considering stopping making money because they don't like the tax rate? Sure some want to worry about how to deal with the cliff to maximize there gains, but i don't see it being worth panicing about.

The Cliff will just cause a redistribution of future income. All things being equal, it will be equally bad for everyone. The money will still be spent, just by different parties on different things.

[Deleted]

Nov 20, 2012 16:57:55 GMT -5 @wxyz said:

The REALITY of taxing the rich is that it ALWAYS ends up biting the ass of the "little people". Of course, I have never seen a socialistic program or administration that is ACTUALLY a good thing for the "average man". ENJOY, elections have consequences.

just wait till the full impact of Obamacare kicks in.

good to see you wxyz

i have been saying this for awhile now

the rich will still be rich....the seniors living on dividend income in Florida and Arizona will get crushed by this

oh well.....more unintended consequences

[Deleted]

In our opinion Not Unintended Consequences.
There is no way that they would not be aware that a large majority of folks who got and continue to be screwed by Zero Bank Interest have been seeking Returns Via Dividends..
Nor is there any way that they are unaware that the Very Wealthy have other places they can look for the Returns..

Basically, they know full well that it will smack the crap out of a large number of Retirees and Mid Income folks -- They Just don't give a Shit, period.

IF, Loopholes were set to Phase out as you climbed in Income - Captial Gains Rates were bumped up - BUT Dividend Rates were left alone PERMENANTLY -- The Markets would react in a Positive Fashion, even with all the other crap that is going on....

But again, they just don't care - period..

If and when they Raise the Rates on Dividends, then Dividends will cease to be an effective Proxy for Savings Account interest (or in the current state of things a Replacement for the Zero Return on Savings).

We the Public have been Screwed by the Lack of Enforcement of The Standing Regulations, Shady - Illegal & Shadow Dealings - then again by the Actions of the FED, then Congress - and now just more of the same.

If that is the state of how things play out and all hell ensues - then bring it on. Even though we are in the Realm of making under 250K a year we already pay near top rates, because most of our gains yearly are SHORT TERM Cap Gains..
We wouldn't mind seeing a Massive Plunge across the Board, it would provide major opportuites to snap up many good things at sub basement prices - and at that point, we wouldn't give a crap about higher Capital gains taxes.

From our POV at that point paying 40% Taxes would still leave us 60% Profit - which if the Taxed Profit was 100K Gross, would still leave us $60K that we hadn't had..

But then I am a Miser to begin with - My total Monthly living costs are $1,100 including food.