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National Support Letter for Extension of the 15% Capital Gains & Dividends Tax Rate
TO THE MEMBERS OF THE UNITED STATES CONGRESS:
The undersigned companies and trade associations strongly urge Congress to prevent a massive tax increase that will have detrimental impacts on investment and jobs in the United States. Congress should move quickly to enact legislation that would keep the capital gains and dividends tax rates at 15 percent.
Unless Congress acts, the tax rate for capital gains will increase by 33 percent and the tax rate for dividends will increase by as much as 164 percent, resulting in one of the largest tax increases in U.S. history. Increasing taxes on capital gains and dividends could derail America's fragile economic recovery.
The effects of such a tax increase are significant and numerous and include deterring the use of capital in ways that will grow the economy and hence maintain and create jobs, incentivizing companies to use excessive debt financing, and discouraging businesses from paying dividends. That in turn will hurt Americans at all income levels, especially seniors, many of whom rely on investment income as a supplement to their retirement.
These adverse economic impacts will be exacerbated when the 3.8 percent tax on investment income from the recently enacted health care bill takes effect in 2013. The increased cost of capital caused by these tax increases will hamper economic growth and job creation for years to come.
We urge Congress to remove the uncertainty over this looming tax increase and maintain the 15 percent tax rate on capital gains and dividends. Now is not the time to discourage investment but to work together to keep the economy on the road to recovery.