Tax (Photo credit: 401K)
Buried within President Barack Obama’s 2013 budget is a proposal to triple the tax rate on corporate dividends which now stands at 15 percent, a move that would have a severe effect on retirees, The Wall Street Journal notes in an editorial.
Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6 percent, according to the Journal. The rate jumps to 41 percent with the planned phase-out of deductions and exemptions and then hits 44.8 percent with the 3.8 percent investment tax surcharge in Obamacare.
“Of course, the White House wants everyone to know that this new rate would apply only to those filthy rich individuals who make $200,000 a year, or $250,000 if you’re a greedy couple. We’re all supposed to believe that no one would be hurt other than rich folks who can afford it,” the Journal wrote.
“The truth is that the plan gives new meaning to the term collateral damage, because shareholders of all incomes will share the pain. Here’s why. Historical experience indicates that corporate dividend payouts are highly sensitive to the dividend tax. Dividends fell out of favor in the 1990s when the dividend tax rate was roughly twice the rate of capital gains.”
via Obama Dividend Tax Would Devastate Retirees.
The Obama White House says it hates tax “loopholes,” and the American people abhor them with good reason. They’re the ultimate in unfairness, allowing those in the know to wiggle their way out of playing by the same rules that apply to the rest of us. That’s why, at first glance, the Obama Administration’s latest “framework” to cut the corporate tax rate while closing corporate tax loopholes might sound like a good twofer.
Before you give the President a gold star for good governance, take a step back, turn up the lights, look around the room, and you’ll see that President Obama has replaced some of those tax loopholes with a giant trap door that’s just the right size for all of his political cronies to slip through.
Here are the details of Obama’s latest crony capitalist ploy. Yesterday, the President proposed reducing the corporate tax rate from 35 percent to 28 percent. That’s certainly a landmark moment – a liberal President calling for a lower corporate tax rate is a Nixon goes to China moment. It’s also long overdue, considering that the U.S. corporate tax rate is the second highest in the world, making it nearly impossible for American companies to compete in the global economy. But here’s where the trouble begins. read more
The Internal Revenue Service would gain sweeping new powers under President Obama’s healthcare reform proposals, in what Republicans on the House Ways and Means Committee are calling a “dangerous expansion” of IRS powers.That’s according to a nine-page Republican report from the Committee on Ways and Means on Thursday. It’s titled “The Wrong Prescription” Democrats’ Health Overhaul Dangerously Expands IRS Authority.”Among the new powers the IRS would assume, the report says: The authority to confiscate tax refunds, to impose fines of over $2,200 per taxpayer, and to verify whether taxpayers’ health insurance coverage is “acceptable.”
via Newsmax – Obamacare Grants IRS Perilous Power, GOP Says – Mozilla Firefox.
A report released Thursday by Congress‘ Government Accountability Office shows why owners of the nation’s four million S corporations might be a tempting target for politicians hunting for more revenue.
The report features new estimates of S corp finagling–estimates based on special in-depth “National Research Program” audits the Internal Revenue Service conducted on 2003 and 2004 S corp tax returns. Over those two years, the GAO estimates, 68% of S corps misreported their net income, understating their combined net profits by $85 billion.
via Could S Corp Owners Be A Tax Target? – Forbes.com – Mozilla Firefox.