Create new account | My Profile | My Journal | My Account | My Inbox | Help | Log in

Google search

Advanced search

HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » Latest Breaking News (Forum) » Senate Democrats Split Fr...

Sat Jul 14, 2012, 04:02 PM

Star Member Judi Lynn (77,615 posts)

Senate Democrats Split From Obama on Taxing Dividends

Source: Bloomberg

Senate Democrats Split From Obama on Taxing Dividends
By Richard Rubin - Jul 14, 2012 1:31 PM CT

Senate Democrats are seeking to set the top tax rate on dividends at 23.8 percent, almost 20 percentage points lower than the proposal offered by President Barack Obama in his budget.

That detail, along with a top estate tax rate of 45 percent and a one-year patch to prevent the alternative minimum tax from affecting millions more families, are part of the written version of Senate Democrats’ attempt to extend expiring income tax cuts for one year. The core of the proposal would extend the George W. Bush-era cuts through 2013 for 98 percent of households while letting them expire on income above $200,000 for individuals and above $250,000 for married couples.

A Senate Democratic aide, who spoke on condition of anonymity, confirmed the details. Senate Majority Leader Harry Reid, a Nevada Democrat, said this week that the Senate will vote before the August recess.

Obama has made his push for a tax-cut extension for all but the highest-income families a central theme in his presidential campaign this week. He has been asking Congress to send him the plan for his signature as soon as possible.


Read more: http://www.bloomberg.com/news/2012-07-14/senate-democrats-split-from-obama-on-taxing-dividends.html

29 replies, 4002 views

Thread informationRemove bookmarkTrash this thread

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 29 replies Author Time Post
Reply Senate Democrats Split From Obama on Taxing Dividends (Original post)
 Judi Lynn Jul 2012 OP
LineReply ....
 DJ13 Jul 2012 #1
LineLineReply IMO Bloomberg's headline is false. How is the Senate bill a "split"
 ProgressiveEconomist Jul 2012 #16
LineLineLineReply I think the "split" is on taxation of the top earners
 progree Jul 2012 #19
LineLineLineLineNew Reply But the President clearly said, Leave taxation on the top 2 percent (and implicitly on
 ProgressiveEconomist Jul 2012 #22
LineLineLineLineLineNew Reply I'm just going by what the article said and what I've seen and heard in the news over and over
 progree Jul 2012 #23
LineReply Again, here's why a public option was NEVER going to happen!
 Liberal_Stalwart71 Jul 2012 #2
LineReply Thinking as someone who's nearing retirement, I have to disagree with our President.
 DCKit Jul 2012 #3
LineLineReply Me too, I disagree. Maybe dividends for the big players, like Romney, should be taxed at 40%
 xtraxritical Jul 2012 #5
LineLineLineReply The current rate...
 ensemble Jul 2012 #12
LineLineLineLineNew Reply 70 K$ taxable income = 89 K$ adjusted gross income
 progree Jul 2012 #20
LineLineLineNew Reply You know I used the word dividends when I really meant capital gains, sorry for the confusion.
 xtraxritical Jul 2012 #21
LineLineLineLineNew Reply Both the qualified dividend rate and the LT capital gains rate remain where they are for bottom 98%
 progree Jul 2012 #24
LineReply As Dick Durbin said
 pscot Jul 2012 #4
LineLineReply ...and "Dick The Dick", should know.
 russspeakeasy Jul 2012 #10
LineReply Simplify things. All income regardless of source taxed at the rate for that income level.
 on point Jul 2012 #6
LineLineReply I believe....
 ensemble Jul 2012 #11
LineReply Where the strange number (23.8%) comes from
 progree Jul 2012 #7
LineReply How many wealthy Senators....
 Capt.Rocky300 Jul 2012 #8
LineLineReply exactly
 heaven05 Jul 2012 #18
LineReply Dividends are earned income and should be taxed as such....
 WCGreen Jul 2012 #9
LineLineReply Seems more like unearned income to me.
 eallen Jul 2012 #17
LineReply One thing I've noticed...
 ensemble Jul 2012 #13
LineLineNew Reply Exactly
 brutus smith Jul 2012 #27
LineReply The DINOs strike again
 DonCoquixote Jul 2012 #14
LineReply On that 3.8% surtax to help pay for health care and the high dividend rates - that's on top earners
 progree Jul 2012 #15
LineNew Reply Taxes must go up
 rks306 Jul 2012 #25
LineNew Reply I see the RW talking point about Obama controlling the Senate is still valid ...
 zbdent Jul 2012 #26
LineNew Reply Tax the hell out of it... I'll never have to worry about dividends... nt
 Comrade_McKenzie Jul 2012 #28
LineNew Reply Politicians tend to over-complicate dividends. Just exempt the 1st $50,000 and tax he rest as
 24601 Jul 2012 #29

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:06 PM

DJ13 (21,344 posts)

1. ....

Reply to this post

Back to top Alert abuse Link here Permalink

Response to DJ13 (Reply #1)

Sat Jul 14, 2012, 05:24 PM

ProgressiveEconomist (5,077 posts)

16. IMO Bloomberg's headline is false. How is the Senate bill a "split"

from what President Obama has proposed for a 1-year extension of Bush tax cuts for the 98 percent? The Senate bill caps current income tax rates at $250k for couples, exactly what the President proposed last week.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to ProgressiveEconomist (Reply #16)

Sat Jul 14, 2012, 05:35 PM

Star Member progree (847 posts)

19. I think the "split" is on taxation of the top earners

On the top earners ($200,000 individuals, $250,000 married filing jointly):
Obama wants to tax at 43.4% rate (39.6% + 3.8% ACA surtax for high earners)
Senate Dems want to tax at 23.8% rate (20.0% + 3.8% ACA surtax for high earners)

ACA being the Affordable Care Act - that 3.8% surtax on high earners is in the original law (its not something new).

As you indicate, the Senate Dems (and Obama) are keeping the Bush tax rates for us low-lifers in the bottom 98%.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to progree (Reply #19)

Sat Jul 14, 2012, 07:54 PM

ProgressiveEconomist (5,077 posts)

22. But the President clearly said, Leave taxation on the top 2 percent (and implicitly on

dividends and capital gains) for another day; "Let's agree on what we agree on". 24.8 percent is good enough for now, and let's talk about the "Buffett Rule" later.

You and Bloomberg are jumping ahead from the President's CURRENT tax agenda, on which there's NO Democratic Party "split".

Republicans WISH the Democratic Party would split the way Republicans are splitting on disclosing their candidate's tax returns. IMO Democrats are going to come out of thier convention united and ready for victory, unlike the way Republicans are heading.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to ProgressiveEconomist (Reply #22)

Sat Jul 14, 2012, 11:38 PM

Star Member progree (847 posts)

23. I'm just going by what the article said and what I've seen and heard in the news over and over

But the President clearly said, Leave taxation on the top 2 percent (and implicitly on dividends and capital gains) for another day; "Let's agree on what we agree on". 24.8 percent is good enough for now, and let's talk about the "Buffett Rule" later.

You and Bloomberg are jumping ahead from the President's CURRENT tax agenda, on which there's NO Democratic Party "split".


Obama's 2013 budget calls for taxing dividends on the upper earners at the ordinary tax rate (the same as wage and salary "earned" income). Which, with letting the marginal rates on the top two brackets return to the Clinton rates means 39.6% on the top bracket. Plus 3.8% ACA surcharge = 43.4%

The Senate Democratic bill calls for taxing the dividends of upper earners at 20.0% + 3.8% ACA = 23.8%.

That sounds like a split to me.

I don't know where you got an Obama quote about leaving taxation on the top 2% for another day. Obama has clearly and consistently all along wanted the Bush tax cuts on the top 2% to expire, except he has apparently been for having a maximum of 20% maximum rate on dividends until his 2013 budget (which with the 3.8% ACA surcharge would be 23.8%).

I don't know what you mean about the CURRENT tax agenda and some future tax agenda? I guess I'm just not following at all.

http://www.bloomberg.com/news/2012-07-14/senate-democrats-split-from-obama-on-taxing-dividends.html :


The proposed bill would set the basic top rate at 20 percent for both capital gains and dividends. The 2010 health care law included an additional 3.8 percent tax, yielding the 23.8 percent rate. In his 2013 budget, Obama called for taxing dividends as ordinary income, subjecting them to a top rate of 39.6 percent and the 3.8 percent surcharge for a 43.4 percent total.

Obama’s previous budgets had included the 20 percent rate on dividends.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:07 PM

Star Member Liberal_Stalwart71 (13,853 posts)

2. Again, here's why a public option was NEVER going to happen!

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:12 PM

DCKit (18,300 posts)

3. Thinking as someone who's nearing retirement, I have to disagree with our President.

Unless, of course, they will be treated as "earned income" for tax purposes. Only then does it make sense.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to DCKit (Reply #3)

Sat Jul 14, 2012, 04:21 PM

Star Member xtraxritical (2,978 posts)

5. Me too, I disagree. Maybe dividends for the big players, like Romney, should be taxed at 40%

but for small time people with low incomes, like retirees, the current rate is imminently fair. There is nowhere to earn interest on small amounts of money so people are forced into high risk stock market investments to try and keep up with inflation. It's just another example of bank fraud, they charge over 20% on their credit cards but barley pay .25% (1/4 of one percent) on savings accounts. The President should think about this more.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to xtraxritical (Reply #5)

Sat Jul 14, 2012, 04:39 PM

ensemble (112 posts)

12. The current rate...

for a married couple earning under about $70K adjusted income is 0%.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to ensemble (Reply #12)

Sat Jul 14, 2012, 05:45 PM

Star Member progree (847 posts)

20. 70 K$ taxable income = 89 K$ adjusted gross income

for a couple taking the standard deduction and 2 exemptions.

Neither Obama nor the Senate Dems are proposing to change the Bush tax rates on dividends or anything else for the bottom 98% ($200,000 individual / $250,000 married filing jointly). So couples with an adjusted gross income of below 89 K$ (and in cases where they itemize deductions or have dependents its even more than 89 K$) will continue to pay a 0% rate on "qualified" dividends

Reply to this post

Back to top Alert abuse Link here Permalink

Response to xtraxritical (Reply #5)

Sat Jul 14, 2012, 07:13 PM

Star Member xtraxritical (2,978 posts)

21. You know I used the word dividends when I really meant capital gains, sorry for the confusion.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to xtraxritical (Reply #21)

Sun Jul 15, 2012, 12:35 AM

Star Member progree (847 posts)

24. Both the qualified dividend rate and the LT capital gains rate remain where they are for bottom 98%

under both Obama and Senate Democrat proposals:

The "lower peasants" -- those in the 15% income tax bracket or below -- pay a 0% rate on both dividends and long term capital gains. For singles in 2012 that is up to a $35,350 taxable income, which corresponds to a $45,100 adjusted gross income (AGI) for a single taking the standard deduction and one exemption (him/her self). For singles who itemize deductions and/or have children, the AGI threshold is higher. For married couples filing jointly in 2012 that is up to a $70,700 taxable income, which corresponds to a $90,200 adjusted gross income (AGI) if they take the standard deduction and two exemptions (one for each person in the couple). For marrieds who itemize deductions, and/or have children the AGI threshold is higher.

The "upper peasants" -- those above the 15% income tax bracket but with income below $200,000 individual / $250,000 married -- pay a 15% rate on both dividends and long term capital gains.

Just to clarify for anyone in the bottom 98% (the "peasants" in the above) who might be worrying about a dividend or long term capital gains increase -- there won't be under Obama's proposals or Senate Democrat proposals, or for that matter, Mitt RobMe's.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:18 PM

Star Member pscot (13,921 posts)

4. As Dick Durbin said

The banks own that place.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to pscot (Reply #4)

Sat Jul 14, 2012, 04:37 PM

Star Member russspeakeasy (5,734 posts)

10. ...and "Dick The Dick", should know.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:24 PM

on point (997 posts)

6. Simplify things. All income regardless of source taxed at the rate for that income level.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to on point (Reply #6)

Sat Jul 14, 2012, 04:37 PM

ensemble (112 posts)

11. I believe....

Last edited Sat Jul 14, 2012, 04:39 PM USA/ET - Edit history (1)

that is what the President is more or less proposing, although there will be an additional tax of 3-4% on dividends to help pay for the new healthcare law.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:29 PM

Star Member progree (847 posts)

7. Where the strange number (23.8%) comes from

"The proposed bill would set the basic top rate at 20 percent for both capital gains and dividends. The 2010 health care law included an additional 3.8 percent tax, yielding the 23.8 percent rate. In his 2013 budget, Obama called for taxing dividends as ordinary income, subjecting them to a top rate of 39.6 percent and the 3.8 percent surcharge for a 43.4 percent total. "


(Currently, "thanks" to the Bush tax cuts, both capital gains and "qualified" dividends are taxed at a maximum 15% rate, while the top marginal rate on ordinary income is 35%. Prior to Bush tax cuts: top marginal: 39.6%. I will have to look up dividends and capital gains, a 20 minute search didn't find it, but I think the maximum capital gains rate was 20% and the dividends rate was the same as for ordinary income.)

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:34 PM

Capt.Rocky300 (146 posts)

8. How many wealthy Senators....

....get much of their outside income in the form of dividends and capital gains? Not to mention stabbing the leader of their party, Pres. Obama, in the back. Scumbags.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Capt.Rocky300 (Reply #8)

Sat Jul 14, 2012, 05:30 PM

heaven05 (2,372 posts)

18. exactly

exactly what I was thinking.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:36 PM

Star Member WCGreen (44,936 posts)

9. Dividends are earned income and should be taxed as such....

No capping at a favored rate.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to WCGreen (Reply #9)

Sat Jul 14, 2012, 05:30 PM

eallen (2,722 posts)

17. Seems more like unearned income to me.

Work is hard. I know when I've worked for money, and when all I had to do was let other people work for it.

I much prefer the unearned variety.

Sort of hard, though, to justify taxing that at a lower rate. The problem is that we want to encourage companies to pay dividends. Or to put it another way, we don't want dividends too much penalized vis-a-vis capital gains. The current set-up has the company pay taxes on the money earned before it is dispersed as dividend, then gives the dividend favored rates on the shareholder's income. It might make more sense to treat the dividend as straight earned income to the shareholder, but not require the corporation to pay tax on earnings it disburses as dividends.


Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 04:45 PM

ensemble (112 posts)

13. One thing I've noticed...

in all this hysteria about a potential tax increase, the press only seems to be concerned about the top marginal rate, and act like poor widows scrapping by are now going to be paying 43% tax.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to ensemble (Reply #13)

Sun Jul 15, 2012, 11:31 AM

brutus smith (22 posts)

27. Exactly

So many people think they are going to be part of that top 1%. Time to stop worrying about the rich, Repubs have that market cornered.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 05:01 PM

DonCoquixote (5,630 posts)

14. The DINOs strike again

How soon till Bill Clinton starts saying Obama was wrong for this? I hear him in 3....2...

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sat Jul 14, 2012, 05:11 PM

Star Member progree (847 posts)

15. On that 3.8% surtax to help pay for health care and the high dividend rates - that's on top earners

Last edited Sat Jul 14, 2012, 05:24 PM USA/ET - Edit history (2)

The 3.8% surtax to help pay for Obama care is just on those earning $200,000 (individuals) and $250,000 married filing jointly. Per the book, "Landmark, The Inside Story of America's New Health Care Law..." by the staff of the Washington Post, 2010

So don't panic that everyone is going to get hit with a 3.8% income tax surcharge.

As for Obama proposing in his 2013 budget that dividends being taxed at the same rate as ordinary income -- that's only for the upper brackets (probably again the $200,000 / $250,000 income and above).

http://www.bloomberg.com/news/2012-07-12/senate-democrats-still-filling-blanks-in-obama-tax-plan.html

Obama’s budget this year calls for taxing dividends as ordinary income for high earners at rates of up to 39.6 percent, compared with 15 percent now. His previous budgets had called for the top tax rate on dividends to be 20 percent, matching the proposed capital gains rates.


Obama has always said he will keep the Bush tax cuts in place for those earning less than $200,000 / $250,000, which is:

Long-term capital gains and "qualified dividends" -
0% rate for those in the 15% tax bracket and below
15% rate for those above the 15% tax bracket (but below the $200,000 / $250,000)

Short term capital gains and unqualified dividends: taxed as ordinary income (just like now)

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sun Jul 15, 2012, 11:15 AM

rks306 (112 posts)

25. Taxes must go up

These people do not make things. Use money to make more money. So they want tax cuts which will add to the deficit.

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sun Jul 15, 2012, 11:24 AM

zbdent (34,522 posts)

26. I see the RW talking point about Obama controlling the Senate is still valid ...

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sun Jul 15, 2012, 11:38 AM

Star Member Comrade_McKenzie (2,526 posts)

28. Tax the hell out of it... I'll never have to worry about dividends... nt

 

Reply to this post

Back to top Alert abuse Link here Permalink

Response to Judi Lynn (Original post)

Sun Jul 15, 2012, 11:47 AM

24601 (2,490 posts)

29. Politicians tend to over-complicate dividends. Just exempt the 1st $50,000 and tax he rest as

ordinary income. That will protect a moderate income that relies soly on dividends and subject the rest to existing tax tables. You can even limit that 1st $50K by limiting the exemption via the AMT for higher incomes.

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread

Latest Breaking News (Forum)
DU Home | Latest Threads | Greatest Threads | Forums & Groups | My Subscriptions | My Posts

About | Copyright | Privacy | Terms of service | Contact

Advertise on DU

© 2001 - 2013 Democratic Underground, LLC. Thank you for visiting.