corporate INCOME taxed twice by the federal government
The Dividend and Capital Gains Taxes are Examples of Double Taxation. The Government Taxes the Same Income Twice: Once at the Corporate Level and Once at the Individual Level.
Today, the Combined Top Tax Rate on Dividends is 43%. Now, Some Want to Raise It to 60%! That’s Unfair and It Will Hurt Seniors and Middle-Income Americans.
Some companies that earn profits will at times share a portion of those profits with their stockholders through cash payments called dividends.
Dividend paying stocks are primarily held by older, middle-income Americans.
Dividend payments to shareholders are subject to a dividend tax.
The dividend tax is a “double tax” because the government taxes the same income twice. The income is taxed first at the corporate level when a company pays taxes on its corporate profits. The income is taxed again at the individual level when a shareholder reports dividend income on their personal tax return.
Due to double taxation, the top tax rate dividends approaches 43%.
There is a similar story with capital gains. The federal government taxes corporate profits through the corporate income tax, and it taxes an investor through the capital gains tax.
Now, some have proposed raising tax rates even higher. They have plans to increase both the corporate tax rate and the rates on capital gains and dividends. Some of these combined tax hikes will raise the highest combined rates to 60%!
Double taxation is unfair. Even worse, raising taxes on dividends will hurt seniors and middle-class families who have built their savings around dividend paying stocks.
Tell Congress to leave taxes on investments alone.