ASI Statement on Fiscal Cliff Deal
For Immediate Release
WASHINGTON, D.C. - Tonight, Congress passed legislation to avoid the full impact of tax hikes set to hit under the fiscal cliff, including higher tax rates on long term capital gains and dividend income.
"While modest tax increases could slow investment in some areas, today’s action blunts the full impact of the fiscal cliff – and not a moment too soon for millions of taxpayers and businesses across America," said former U.S. Representative Jim McCrery (R-LA), Manager of the Alliance for Savings and Investment. "The compromise rightly preserves parity between capital gains and dividend tax rates, ensuring our tax code will not determine investment winners and losers. Let’s hope this action gives individuals and businesses some of the certainty they need to invest and fuel our economy."
Details of the bipartisan compromise on its way to President Obama for signature into law:
- Maintains the 15 percent tax rate for long term capital gains and dividend income for individuals making $400,000 or less and joint filers making $450,000 or less.
- Tax rates on long term capital gains will rise to 20 percent for individuals making more than $400,000 and joint filers making more than $450,000.
- Tax rates on qualified dividends will rise to 20 percent for individuals making more than $400,000 and joint filers making more than $450,000. The bill blunted the full impact of the fiscal cliff for tax rates on dividend income, which would have been taxed as ordinary income under the fiscal cliff. Under the cliff scenario, the top tax rate on dividends would have skyrocketed from 15 percent to 39.6 percent.
ASI is a diverse coalition of dividend-paying companies, investor organizations and trade associations formed in support of a common goal: to promote economic recovery, growth and job creation through policies that foster private savings and capital investment.