Senate Plan Seeks Lower Dividend Tax

Senate Democrats split from Obama; target 23.5% top rate on dividends.

Senate Democrats are seeking to set the top tax rate on dividends at 23.8 percent, almost 20 percentage points lower than the proposal offered by President Barack Obama in his budget.

That detail, along with a top estate tax rate of 45 percent and a one-year patch to prevent the alternative minimum tax from affecting millions more families, are part of the written version of Senate Democrats’ attempt to extend expiring income tax cuts for one year. The core of the proposal would extend the George W. Bush-era cuts through 2013 for 98 percent of households while letting them expire on income above $200,000 for individuals and above $250,000 for married couples.

Raising Taxes

“Raising taxes on job creators during a jobs shortage makes about as much sense as cutting off the water supply during a drought,” Senator Rob Portman of Ohio said in the weekly Republican address.

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