Retired seniors could be among the hardest hit by the failure to extend Bush-era tax cuts on Jan. 1 since they rely most on investments and savings
Lawmakers have been warning for months about the income-tax consequences for working families, including penalties on marriage and a reduction in child tax credits.
But those living off investment income would see not only their 401(k) and savings accounts taxed at higher income rates, but also dividends and capital gains skimmed deeper and deeper by the federal government.
Studies of IRS data put out by The Tax Foundation show seniors over 65 earn more from dividends and capital gains than any other age group -- more than $77 billion in dividends and more than $150 billion in capital gains in 2008.That means for retired workers, every penny is that much more valuable. Investment income typically supplements Social Security, or vice versa, and tax analysts say that if the Bush tax cuts expire, it could mean thousands of dollars less every golden year
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Pete Sepp, executive vice president at the National Taxpayers Union, called it a "serious tax squeeze" for retirees."A lot of them still have money in things like traditional mutual funds," he said.
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3 comments:
As a group they hold more wealth than anyone and are the least affected by this recession. Let them pay more.
How is it the wealthy who make a large percentage of income from capital gains are only taxed 15- 20%???
1:49-70% of Americans are effected by an increase in Cap Gains and Dividend taxes. The "Rich" already pay 80% of federal income revenues, the bottom 47% pay 0%. How much more of the burden should they shoulder?
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