Taxes on dividends could increase more than expected

Most anyone who has been awake for the past year and half expects dividend taxes to increase from the current top rate of 15%.  But it appears rates could sky-rocket.  An editorial in the Wall Street Journal today discusses the Senate’s proposal for dividend taxes: “Last week the Senate Budget Committee passed a fiscal 2011 budget resolution that includes an increase in the top tax rate on dividends to 39.6% from the current 15%—a 164% increase. This blows past the 20% rate that President Obama proposed in his 2011 budget and which his economic advisers promised.” (“The Dividend Tax Bill Arrives: Democrats would nearly triple the top rate”, WSJ, 4/29/2010).

If you are an advisor, how are you preparing clients for the coming increases? Business owners, have you changed your distribution policies for this year in anticipation of higher taxes?

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Posted in For Advisors, For Givers, Your thoughts. Comments Off on Taxes on dividends could increase more than expected
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