Client News
Sun Senintel: Thomas C. Feeney, III: Maintaining current tax rates on dividends, capital gain
Monday, December 10, 2012
As the Associated Industries of Florida continues to support and protect the business community, we want to offer a perspective on an issue that is critical to business, investors, workers and retirees throughout the state of Florida.
Current federal legislation, S 1647 and H.R. 3091, has been filed to extend current dividend and capital gains tax rates, which are set to expire on Dec. 31. Depending on income level, the current 2012 tax rates for dividends range from zero to 15 percent. If the current tax rates are allowed to expire, the new dividend tax rates will range from 15 to 39.6 percent, while the tax rate on capital gains would increase from 15 to 20 percent.
This drastic increase in tax rates would discourage investment in dividend-paying stocks, increase market volatility and thus threaten the nation’s already uncertain economic recovery.
Additionally, if Congress fails to act before the current rates expire, widely differing tax rates on dividends and capital gains could lower the stock prices of dividend-paying companies, thereby inhibiting their ability to attract capital and grow their business, while also hurting the retirees who depend on dividend payments for income.
Since 1920, AIF has represented the principles of prosperity and free enterprise before the state government and believes in working to keep Florida on a positive track to recovery. Congressional initiative to maintain the current tax rates on both dividends and capital gains would be good for our nation’s ailing economy, recession-weary consumers, cash-strapped retirees, businesses of all sizes and other investors.
AIF encourages Congress to quickly adopt this legislation to extend our current tax rate on dividends and capital gains.
Thomas C. Feeney, III, is president and CEO of Associated Industries of Florida.