Congressman Peter Roskam

Representing the 6th District of Illinois

Roskam: Allowing Cap Gains and Dividend Tax Hike Would Stifle Job Growth and Investment

May 18, 2012
Press Release

 

WASHINGTON, D.C. – Today, Chief Deputy Whip Peter Roskam (IL-06), hosted a CFO roundtable discussion on the pending hike in capital gains and dividend taxes and the negative impact this increase would have on job growth and investment.  Roskam was joined by fellow Ways and Means Committee Members Lynn Jenkins (KS-02) and Tom Reed (NY-29) in hosting CFOs from Southern Company, Verizon, PPL, and American Water.

“These CFOs painted a vivid picture of how the pending capital gains and dividend tax hikes would stifle their ability to grow and hire new workers,” said Roskam.  “We need jobs in this country, and an increase in these tax rates would absolutely hurt the economy as a whole.  And it’s not just hiring that would take a hit—millions of seniors rely on money from investments to supplement their fixed income, and would have less each month to pay their bills.”   

“I commend Ways and Means Committee Chairman Dave Camp for laying out a plan to not only ensure taxes on American families don’t spike at the end of this year, but also to bring about meaningful tax reform to assure American competitiveness,” said Roskam.

“Billions of dollars are needed to invest in America’s future, including our energy future,” said Southern Company CFO Art Beattie.  “That requires enormous amounts of new capital, so we must adopt tax policies that promote capital formation in order to create jobs for American families.”

This morning, Roskam appeared on CNBC’s Squawk Box with Paul Farr, CFO of PPL who said, “This is a very unfortunate time for a tax issue like this to come up because our sector has the capability to be very meaningfully additive to the economic recovery.”  To watch the video, click here.

Background

  • Without action, capital gains and dividend tax rates are scheduled to increase dramatically on January 1, 2013. 
  • Both are currently set at 15 percent, but with the looming January tax hike and the addition of the 3.8 percent Medicare tax created by the President’s health care law, capital gains and dividend taxes will increase by as much as 58 percent and 189 percent respectively. 
  • The United States has the 4th highest integrated tax rates on capital gains and dividends among OECD and BRIC countries.
  • The scheduled January 2013 tax hike will push the US integrated tax rate on dividends to the world’s highest, and the integrated rate on capital gains to the world’s second highest.
  • A January 2010 Ernst & Young study found that 61 percent of the 27.1 million tax returns qualifying for the dividend tax rate reduction in 2007 were filed by taxpayers age 50 and older; 30 percent were from taxpayers age 65 and older.

 

 

 

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