Dividend Tax Cut Caught in Dilemma Over Deficit Rules
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President Barack Obama, offering a consolation prize to high-income Americans whose taxes he wants to raise next year, is proposing to scale back a scheduled tax increase on their dividends. A budget law Obama signed this year may keep the Democratic president from meeting that goal.
A cut in the dividends rate to its current 15 percent, from rates as high as 39.6 percent, was among tax measures enacted under Republican President George W. Bush. All those cuts are scheduled to expire Dec. 31, and unless Congress acts, the previous higher rates would return next year.