Dividend Stocks And Taxes

I recently shared an important piece of news with readers of my High-Yield Investing newsletter that I think every dividend investor should know about. Last month, President Barack Obama tabled his $3.8 trillion budget for the 2013 fiscal year starting this October 1. The budget proposes $1.7 trillion in new revenue over the next 10 years, in part by ending Bush-era tax cuts for "wealthy" individuals making more than $200,000 in income and households earning more than $250,000 a year.

What is new, however, is that for the first time Obama is proposing a dividend tax rate of up to 39.6% on the wealthy. Originally, the administration had said it would raise the top tax rate on qualified dividends from 15%, where they are today, to 20% for the wealthy. The administration says the dividend tax increase would pump $206 billion into federal coffers in the next decade. It's still a long way off from coming into law, at least before the election. Right now, it's more a campaign platform than a legislative bill.

Source: Jutia Group

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