Chris Hogan Defend my dividend countdown update

As we move closer to a new year, America’s investors are also moving closer to an equally significant milestone.  When we ring in 2010, only three short months from now, we also start a countdown that may very well lead to no celebration at all.

If Congress does not act, on December 31, 2010, investors from all walks of life – whether individual retirees or pension fund managers – will face markedly increased taxes on their dividend income.  In fact, the maximum dividend tax rate will jump from the current 15 percent to almost 40 percent!


I was just in Albuquerque, New Mexico, speaking to more than two hundred investors who are concerned about what the future holds for them.  This event, an annual luncheon for members of the New Mexico Utility Shareholders Alliance, brought home to me the importance of face-to-face advocacy.  I had been invited to talk about this very issue and to let everyone in the room know that someone was looking out for them.

Looking out for America’s Investors

As the leading national grassroots advocacy organization dedicated to preserving fair and reasonable dividend tax rates, Defend My Dividend (DMD) is leading the fight to protect investors who depend on their dividends to make ends meet, to plan for the future and to provide themselves with a sense of security.

DMD is actively supporting proposals by President Obama and Senate Finance Committee Chairman Max Baucus (D-MT) to make permanent the current capital gains and dividend tax rates for the majority of Americans while capping the rate at 20 percent for higher-income families. Over the summer, Chairman Baucus introduced legislation that mirrors the capital gains and dividend policies in President Obama’s fiscal year 2010 budget.  They are sensible goals that support America’s investors and promote investment in the companies and businesses that are moving this country forward.

How We Got Here

Prior to 2003, dividends were taxed as ordinary income, with a maximum rate of 35 percent. After 2003, dividends were taxed at a 15 percent rate for all taxpayers. In 2006, Congress extended that dividend provision through 2010, while also lowering the tax rate to zero for the two lowest federal brackets.  Without action by congress, the dividend tax rate will rise to a maximum of 39.6 percent – in tough economic times, that’s just wrong.

This Really Does Affect Everyone

Many Americans depend on their dividend checks to supplement household income.  But did you know that lower dividend rates also help to attract much-needed capital for local energy utilities?  That’s important, especially at a time when utilities are making major investments in power generation and delivery facilities.

This is real money and it impacts real families.  In fact, the dividend tax rate reduction benefits more than 24.5 million households – 59 percent of which have incomes less than $75,000.  24 percent of households receiving dividends had incomes below $25,000. And 72 percent of households receiving dividends had incomes below $100,000.

Even if you don’t receive dividends yourself, if you invest in a 401(k), are part of a pension plan or even have shares of a mutual fund, dividends are probably a bigger part of your life than you realize.

DMD is preparing to step up its national grassroots campaign in 2010 by drawing attention to this one-year countdown and ensuring that congress supports President Obama and Chairman Baucus.

DMD is also expanding its message to make sure that every American understands that now more than ever, the fate of the dividend tax affects everyone.

To learn more about DMD and to learn how you can make your voice heard, visit today.

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