Category Archives: Policy

Puerto Rico debt

In the news …

The Supreme Court has struck down a Puerto Rican law that would have allowed the U.S. territory’s public utilities to restructure their debt. The 5-2 ruling leaves management of the island’s fiscal crisis to Congress.

UK Tax Policy

British Treasury chief George Osborne on Wednesday confirmed the government will accelerate a cut in the corporate tax rate in April, while dropping the top, marginal personal tax rate of 50% to 45% in April 2013.

Obama 2013 Budget Proposal

With momentum shifting back in favor of an Obama re-election, we revisit and move the proposed dividend tax policy to the forefront.

In late February, the Wall Street Journal wrote …

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today’s 15% rate.

Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.

US Fed

WASHINGTON (MarketWatch) — The Federal Reserve is considering a new kind of bond-buying program that would simultaneously try to limit inflation, according to a report in the Wall Street Journal. The Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates.