Extension of Favorable Tax Rates on Capital Gains and Dividends

In December 2010, ICI applauded the enactment of a tax bill that maintains and extends the current tax rates on capital gains and dividends for two years. The two-year extension prevents tax increases on investments by Americans saving for retirement, a home, higher education, or other financial goals.

Without enactment of this legislation, the tax rates on investment income were scheduled to increase on January 1, 2011. The top tax rate for capital gains would have increased from 15 percent to 20 percent. Dividends would have been taxed as ordinary income, rather than capital gains, and would have been subject to a top tax rate of 39.6 percent.    

This page provides information on ICI’s efforts to help persuade Congress to extend the capital gains and dividends tax rates.