Thursday, April 1, 2010

Investors on Edge: Taxes Could Soon Skyrocket

Investors and their advisers can only scratch their heads as they face an uncertain future for U.S. income-tax policy, including one scenario that could send levies on dividends soaring.

During the presidency of George W. Bush, long-term dividend and capital-gains taxes were reduced to 15 percent.

President Barack Obama, backed by many congressional Democrats, wants to raise both rates to 20 percent for married couples earning more than $250,000 a year.

Further clouding the situation, if Congress fails to take any action, the old policy expires and dividends will again be treated as ordinary income and taxed at a rate of up to nearly 40 percent. Capital-gains taxes would go up to 20 percent. (more)

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