Tuesday, July 10, 2012

Obama's Tax Platform Putting Retirees At Risk?

The current low level of CD and bond interest rates has resulted in retirees allocating more of their investment dollars to higher yielding equity and lower quality bond investments. President Obama's pledge to increase taxes on the rich ($250,000 and above in income) will likely have a negative impact on retiree incomes after 2012.
  • The 2013 top marginal rate for qualified dividends increases from 15% to 44.6%.
  • The tax on interest, rents, royalties, etc., increases from 35% to 44.6%.
  • Long term capital gain tax increases form 15% to 25%.
These tax increases, with no commensurate proposal to reign in government spending, will have a detrimental impact on economic growth in the U.S. said Josh Brown, vice president of Fusion Analytics and author of The Reformed Broker blog.

A detailed summary of the tax implications of the Affordable Care Act can be found on the Association For Advanced Life Underwriting website.

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