Taxes on Dividend Too High in USA

March 13, 2014 Taxation in USA

WASHINGTON D.C. – Dividends are taxed too heavily in the USA, and the excessive burden places a heavy strain on businesses, investors, and the entire country.

On March 11th the independent US based think tank the Tax Foundation released the results of new study analyzing the burden of federal- and state-level taxes faced by individuals receiving dividends, showing that the combined average tax obligation faced in the USA is now 28.6 percent, one of the highest in the developed world.

According to the report the top marginal federal tax rate on dividends is 23.8 percent, while at state level the highest tax burdens on dividend incomes are in California and Hawaii, at 13.3 percent and 11 percent respectively, and the lowest rate is in North Dakota with a tax of 3.1 percent.

Subsequently, the researchers concluded that the highest overall rate on dividends in the USA is faced by Californians, at 33 percent, although taxpayers in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming paid the lowest rate in the country of 25 percent.

Summarizing the overall effect that these type of taxes have on the US economy, the authors of the report indicated that the high level of taxation directly “…creates a bias against saving and investment leading to lower living standards for all.”

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