Rep. Grimm Warns President’s Budget Puts Seniors’ Retirement at Risk with a 200% Tax Rate Increase on Dividends

WASHINGTON, DC – Today, Rep. Michael G. Grimm (R,C-NY) issued the following statement on the proposed dividends tax hikes in President Obama’s FY 2013 Budget Proposal:

“It’s clear from President Obama’s FY2013 Budget Proposal that he only wants to punish the American people – particularly our seniors – to continue his addiction to spending on more big government and wasting it on failed policies like Solyndra.

“If President Obama has his way, tax rates on dividends could reach 44.8% next year – that’s triple our current 15% rate.  Some of the increase comes from the phase-out of exemptions and deductions. Another comes from the 3.8% investment tax surcharge imposed on earnings to pay for Obamacare, which I am fighting to repeal with legislation I’ve introduced in the House.

“Disguised as another ‘tax the rich’ proposal, it’s our nation’s seniors who will really take a hit. Almost 75% of dividend payments are to recipients over the age of 55, and more than half go to those older than 65, according to the IRS. Historically, when tax rates on dividends go up, we see lower payouts, which means less money in everyone’s pockets and less available to inject back into our struggling economy. Higher taxes are also not a surefire way to raise revenue. We’re seeing this now in the UK, where attempts to raise revenue have failed miserably after the government imposed a 50% tax rate on Britain’s highest earners.

“When our ancestors came to this country, they came here with the hope of creating a better life and brighter future for themselves and their children. They fought for our nation, they worked hard, and they invested in their future.  Now that this generation has reached its prime, President Obama has darkened their rosy dreams of retirement.  Whether it be this proposed tax hike or the president’s refusal to address the inevitable bankruptcy of Medicare, one thing remains clear: At a time when America’s seniors need us more than ever, the Obama Administration has turned its back on them.”  

On April 14, 2011, Rep. Grimm introduced H.R. 1549 to amend the Internal Revenue Code to repeal the 3.8% Medicare contribution tax on net investment income.