Client News
Tallahassee Democrat: Rick Watson: Extend tax relief to boost business
Wednesday, November 21, 2012
As Associated Builders and Contractors of Florida works to protect the largest statewide network of commercial and industrial contractors, we feel it is important to openly support a federal tax issue being considered on Capitol Hill.
The dividend and capital gains tax rates are set to expire at the end of this year. The current tax rates on dividends range from 0 percent to 15 percent, depending on income level. If the tax rates are allowed to expire, our industry, along with many others, will be subject to the new dividend tax rates that will range from 15 percent to 39.6 percent, as well as a capital gains tax rate increase from 15 percent to 20 percent.
Dividend profits are already taxed twice. Raising the dividend tax rate by allowing the existing rates to expire would only intensify the problem of double taxation — an irresponsible move during a fragile economic recovery. When a company pays taxes on annual earnings at rates up to 35 percent and then provides dividends to shareholders using earnings, the monies are taxed again at an individual level.
Bills filed in Washington (S. 1647 and H.R. 3091) propose extension of the current rates for the betterment of all hard-working Americans.
Our industry’s employers, employees and their families cannot possibly afford to incur yet another tax increase during this economic slump. The fact that the contracting industry has just begun to see a light at the end of the tunnel represents the hope we share to continue on a path of growth and recovery after struggling for four long years. These measures are necessary and will ensure the protection of efforts to rebuild our economy — just as we will rebuild America’s infrastructure and foster new business.
The current tax rate extension on dividends and capital gains encourages investment that will stimulate job growth statewide. These policies may be created on Capitol Hill, but they hit home for every dedicated, hard-working family in our great nation. We are all committed to getting America back on track, and a dramatic tax increase will stifle our recovery, discouraging savings and investment and extinguishing hope.
On behalf of ABC membership and their families, we urge the U.S. Senate and House to quickly adopt this legislation and vote in favor of extending the current tax rates.
Rick Watson is legislative counsel for Associated Builders and Contractors of Florida. Contact him at rick@rwatsonandassociates.com.