Business fights higher capital gains, dividends rates
Business Courier of Cincinnati – by Kent Hoover Washington Bureau Chief

Americans will invest less in U.S. businesses unless Congress prevents a scheduled tax increase on capital gains and dividends.

That’s the argument business groups are making as the calendar creeps closer to Jan. 1, when the tax rate on most capital gains is scheduled to increase from 15 percent to 20 percent. The tax rate on qualified dividends will increase from 15 percent to the tax rate in effect for each taxpayer’s ordinary income, which could range up to 39.6 percent next year.

In a letter to Congress, 453 businesses and trade associations urged Congress to maintain the current 15 percent tax rate on capital gains and dividends.

Increasing these taxes “could derail America’s fragile economic recovery,” the letter stated. The effects of such a tax hike “include deterring the use of capital in ways that will grow the economy and hence maintain and create jobs, incentivizing companies to use excessive debt financing, and discouraging businesses from paying dividends.”

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