WASHINGTON, March 20, 2012 /PRNewswire-USNewswire/ --EEI President Tom Kuhn today commended House Budget Committee Chairman Paul Ryan (R-Wis.) for emphasizing the need to keep tax rates on dividends low.
The chairman's blueprint assumes that Congress will not allow massive, across-the-board tax increases to hit the economy in 2013. Unless Congress takes action by December 31, the current tax rates on dividend income will skyrocket, in some cases to almost 44 percent – a nearly 190 percent increase. Unfortunately, the Obama administration's budget proposal did little to protect this important driver of economic growth by calling for higher dividend taxes on those making more than $200,000.
"A sharp increase in the federal tax rates on dividend income on any taxpayer would ultimately hurt all taxpayers and also increase the cost of capital utilities must raise to modernize the electricity grid," Kuhn said.
Kuhn also lauded Chairman Ryan for acknowledging that taxing dividends and capital gains at higher rates could, as his budget states, lead to a "flight of capital away from job-creating businesses," which would be extremely harmful to the nation's still-fragile economy.
"EEI looks forward to working with Chairman Ryan as well as Ways and Means Committee Chairman Dave Camp (R-Mich.) and other lawmakers on a tax reform plan that keeps dividend tax rates low and maintains parity with the capital gains rate."
The Edison Electric Institute (EEI) is the association of U.S. shareholder-owned electric companies. Our members serve 95 percent of the ultimate customers in the shareholder-owned segment of the industry, and represent approximately 70 percent of the U.S. electric power industry. We also have more than 65 International electric companies as Affiliate members, and more than 170 industry suppliers and related organizations as Associate members.
SOURCE Edison Electric Institute