Dividends4Life: Obama’s Budget Proposal Effect On Dividend Stocks

Russ Koesterich: While most investors aren’t yet focusing on this fall’s US presidential election, one bit of politics has caught their attention: President Obama’s 2013 budget proposal includes a significant hike in the dividend tax rate. Under the proposal, which essentially lets the Bush tax cuts expire for the wealthy, the dividend tax rate for individuals earning $200,000 or more a year would basically triple.

The president’s budget proposal is an opening salvo in what’s likely to be a contentious negotiation. Should the Republicans hold the House of Representatives and capture the Senate next fall, very little of the president’s current budget proposal is likely to become law even if Obama is reelected. Since Obama’s proposal is unlikely to pass, I wouldn’t suggest going out now and selling dividend paying stocks.

Source: ETF Daily News

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