'Jurassic Cliff' For Dividend Investors

Posted by D4L | Thursday, November 15, 2012 | | 0 comments »

The expiration of the Bush-era tax cuts (AKA the "Fiscal Cliff" or as we call it "Jurassic Cliff") on December 31, 2012 will increase tax rates on most ranges of ordinary income including long-term capital gains along with qualified dividends. But higher taxes won't just affect wealthy taxpayers like some people think. A report by the Tax Policy Center notes:

"Every income group would see taxes rise by more than 3.5 percent of pretax income. Upper income taxpayers would experience the largest tax increases, both in absolute terms and as a percentage of income. The top quintile would see its tax burden rise by slightly over $14,000 per tax return, almost 6 percent of pretax income. Taxpayers in the top 1 percent of the distribution would experience an average tax increase of over $120,000, slightly over 7 percent of their pretax income."

Source: NASDAQ

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