Jonathan Burton's Life Savings: 'Fiscal cliff' tax hike won't kill dividend income
But a broader perspective is in order: Dividend-paying stocks have outperformed nondividend shares even when taxes were much higher.
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#1 Sep 4, 2012
The full tax on dividends will hurt those who took lump sums or retired early. The tax the rich crowd will leave collateral damage for those with lower incomes. Many have had to retire early over the last several decade or so and/or have to use their savings and investments to pay bills. This will not only burden more people with tax bills but will hurt incentive to save and invest.
Many who had to retire early will now be forced into and already stressed economy/job market. That's extra competition for those already looking for a job. In a robust economy this would'nt be so bad.
The tax the rich crowd fails to realize that just possessing dividend paying stocks does not make a person rich or able to 'pay more'. Why should someone be penalized for investing to get 7 percent interest instead of a 2 percent cd or bank account. Investment in dividend paying stocks, funds and/or bonds is investing/money to use on the economy for a government or company.
The same tax the so called rich crowd who thinks they are getting payback are also boxing themselves into a rigged banking/savings system that barely pays interest on their deposits. This is a case of class envy I'm afraid.
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