Tags: CEOs | dividends | capital | gains | taxes

CEOs to Geithner: Don’t Raise Dividend, Capital Gains Taxes

By    |   Thursday, 10 May 2012 07:46 AM

A group of 18 CEOs have sent an open letter to Treasury Secretary Tim Geithner urging the continuation of favorable tax treatment for dividends and capital gains.

The CEOs come from blue-chip companies such as Verizon and Duke Energy. They posted the letter on Politico.

Long-term capital gains and most stock dividends are currently taxed at a 15 percent rate.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

But if no action is taken by Congress before next year, dividends will be taxed as ordinary income. That could push the rate as high as 39.6 percent for the wealthiest taxpayers. The long-term capital gains tax would increase to 15 percent.

The Obama administration opposes maintaining current rates.

Dividend and capital gains tax hikes would hurt the economy and job creation, the CEOs say.

“Equity capital is the lifeblood of investment and job creation for U.S. companies,” they write.

“We believe the administration’s proposal will limit corporations’ ability to raise new capital.”

With bond yields near record lows, many investors have turned to blue-chip dividend stocks as sources of income.

“Higher taxes on dividends would hurt economic security for taxpayers at every income level — particularly seniors, who rely heavily on investment income to make ends meet,” the CEOs write.

The other companies whose CEOs signed the letter are Altria, American Water, Aqua America, Black Hills, CenterPoint Energy, CenturyLink, Dominion Resources, DTE Energy, Edison International, Frontier Communications, Southern Co., Spectra, UPS, Windstream, Wisconsin Energy, and Xcel Energy.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

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