Yet Another Front in the Fiscal Cliff Negotiations
Posted at 10:15 a.m. on Dec. 5, 2012
The Financial Times reports on yet another source of contention as President Obama and House Republicans negotiate a solution to the “fiscal cliff”: ”Republicans in the House of Representatives are fighting tax increases on capital gains and dividends, ruling out investment income as an acceptable source of additional revenues.”
“A compromise between the two sides on investment income could conceivably lead to a modest hike in capital gains and dividend taxes. But if no deal is reached at all, the impact could be much greater, with tax rates on capital gains rising to 23.8 per cent and those on dividends increasing to 43.4 per cent.”
“House Republicans argue that higher tax rates on capital gains and dividends, unless offset by lower tax elsewhere, could be just as damaging to the economy as increasing tax on ordinary income.”
