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‘Tax the rich’ just rhetoric

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The Bush tax policy (referred to as cuts) expires at the end of 2012 and all current income tax rates will rise to pre-2001 levels: the lowest rate will jump from 10 percent to 15 percent and the highest from 35 percent to 39.6 percent. The expiration of Bush tax policy will dramatically increase taxes on capital gains and dividends. Bush tax policy taxed capital gains and dividends at a flat rate of 15 percent. When the policy expires, capital gains and dividends will be taxed as regular income, meaning that everyone in a rate higher than 15 percent pays more taxes. Plus, the health care law imposes a new and additional 3.8 percent tax on passive income, including dividends and interest. So the dividend tax will increase for everyone. This administration tries to justify the change in tax policy by arguing that it will only affect the wealthy. Basic economic analysis reveals that almost every taxpayer, not just the wealthy, will be harmed by this tax hike. Everyone who currently holds dividend-paying stocks — everyone with 401(k)s to union pension funds to non-profit foundations — will see the value of their investments decline substantially. Hiking taxes on dividends will be disastrous for retirees: according to the IRS, more than half of dividend payments go to Americans over age 65. Don’t be fooled by the “Tax the Rich” rhetoric! Willard F. Schmehl, Cool