What Experts Are Saying

What the Market is Saying

“The chilling effect on the economy will start to be felt immediately, {if the tax cuts are allowed to expire}. In 2013 the high-income threshold for the higher rates — $200,000 for singles and $250,000 for couples — will become more of a middle-class problem because it isn't adjusted for inflation.”

Donald Luskin, chief investment officer of Trend Macrolytics LLC

Investor’s Business Daily • March 23, 2010

“I have lots of clients that have said maybe we ought to move our selling plans ahead [because of the investment tax hike].”

Hugh Johnson, chief investment officer at Johnson Illington Advisors”

Investor’s Business Daily • March 23, 2010

“It's a big hike, It's really wild."

Gregg Wind, Wind & Stern

USA TODAY • March 24, 2010

“You don't get wealthy people to invest in other people's businesses if they think they will end up paying a lot of tax. Higher rates of capital gains tax destroys the market for buying and selling businesses – entrepreneurs will only sell if the price they are likely to get is so high that it is worth them letting go of a company they created and have nurtured. If they see a lot of it going in tax they won't sell. And if these businesses are not bought by others like private equity or major companies, then they won't grow and become the big businesses of tomorrow. So you strangle the whole economy just as growth offers the only way out of the current crisis.”

Andrew Shaw, national tax managing partner at restructuring and advisory group Begbies Traynor”

Thisismoney.co.uk • May 3, 2010

“Investors and their advisers should be planning their moves now — not waiting until the last moment. One big movement could be out of dividend-paying stocks because the double taxation of dividends, greatly reduced by the Bush administration's tax cuts of 2003, will return in force next year.”

InvestmentNews.com Editorial

InvestmentNews.com • May 9, 2010

“On a fundamental and absolute basis, the group {utilities stocks} would be about 10 percent overvalued if the taxation of dividends were to revert to the ordinary income rate.”

Daniel Ford, Barclays Capital

April 26, 2010

“With the expiration of the 2003 tax cuts, dividends again will be taxed at a taxpayer's ordinary tax rate. For the wealthy, this could be as high as 39.6 percent and could rise as high as 43.5 percent when the tax imposed on couples who earn more than $250,000 a year to pay for health care reform goes into effect in 2013. This once again will give the United States one of the highest dividend tax rates in the industrialized world.”

InvestmentNews.com Editorial

InvestmentNews.com • May 9, 2010

“There could be some trouble in dividend paradise thanks to the U.S. government… At some point this year, investors, including the big boys, are going to start selling these stocks ahead of the tax changes.”

Jim Cramer

CNBC • May 18, 2010

“Wall Street’s concerns and uncertainty over these taxes are already affecting the markets, as they are a major reason for the market correction since the April 26 highs.”

Jeff Saut, chief investment strategist at Raymond James

May 21, 2010