Most dividend income is currently taxed at 15 percent. If the Bush era tax cuts expire, dividend income would count as ordinary income and be taxed at the rate the earner is paying on other income.
While that has led to concerns for some investors, Roberton Williams of the Tax Policy Center told NPR that possible higher rates on investment income will not have a significant effect on most Americans.
Eighty percent of Americans report no income from dividends or long term capital gains, and currently more than half of the tax benefit on investment income goes to the top one-tenth of the top one percent of earners.
Jeremy Hobson joins Robin Young as co-host of Here & Now in its new 2-hour format, from WBUR and NPR.
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