The James Madison Institute (JMI) has worked for many years to keep Floridians informed about their state and federal governments.

As a Florida-based research and educational organization, it is important we raise public awareness about federal legislation being considered on Capitol Hill that significantly affects taxpayers in our state.

Congressional bills currently proposed, S. 1647 and H.R. 3091, will extend the dividend and capital gains tax rates. This extension will provide relief to hard-working families across our state and nation. Otherwise Florida employers, employees and retirees will see tax rates skyrocket in 2013, more than doubling what they currently pay in some cases.
 
The current dividend tax rates range from 0 percent to 15 percent  depending on income level. If this legislation does not pass by Monday night, the current rates will expire, meaning an increase ranging from 15 percent to 39.6 percent. In addition, the tax rate on capital gains would increase to 20 percent.

As our state’s families and businesses join with the nation to begin another year of economic recovery, lawmakers should not increase the burdens they face but work together to alleviate financial pressure and reduce spending.
 
JMI believes in shaping policy that will impact our state’s future through the advancement of practical free-market ideas on public issues. Federal tax policy should not create winners and losers in the marketplace.

This increase poses a potential threat to Floridians and the U.S. economic recovery as a whole. Dividend income is already taxed twice, once by a business and again at the individual level. Raising the dividend tax rate by allowing the existing rates to expire would only magnify the burden of double taxation.
 
The existing dividend tax rate preserves an incentive for all Americans to save and invest in their futures.

Millions of families – from all income levels and age groups – own stocks that pay dividends. In fact, senior citizens are most likely to own dividend-paying stocks and many retirees rely on dividend payments as a steady source of income.

As America works toward economic recovery, we cannot afford an additional tax of any kind, let alone nearly doubling a current rate for hard-working citizens.
 
Thomas Perrin is the Director of Public Affairs at the James Madison Institute. He can be contacted at [email protected]@jamesmadison.org

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