Many federal employees are nearing retirement age, and any American in the workforce, whether working for the federal government or in the private sector, presumably plans to retire someday. Once a person retires, he then has to rely on other sources of income which often come in the form of capital gains and dividends from investments. A higher tax on this form of income would presumably be a burden on retirees who rely on it to pay their bills.
Senator Mike Crapo (R-ID) believes it would be better for retirees if the capital gains tax rate were held at a lower rate. He recently introduced legislation along with Representative Peter Roskam (R-IL) in the House to permanently cap the dividend and capital gains tax rate at the current 15% level.
According to information released from Senator Crapo, the expiration of the current tax rates from the last decade (set to expire at the end of 2012) along with proposed new taxes from the recently enacted healthcare law would potentially amount to a 58% higher tax rate on capital gains and as much as a 189% higher tax on dividend income.
Speaking on the proposed legislation, Rep. Roskam said, “If we don’t act, Americans who rely heavily on these current rates – from seniors to businesses to investors of all kinds – will be severely negatively impacted. Instead of adding more barriers to private-sector job creation, let’s choose to foster a culture that encourages investment, capital formation, and economic growth.”