Investment Income Tax?

Question

Currently the tax on Dividends is at 15%, if the Gov raise it to 28% does the mean someone in the 15% tax brakect would have to pay 28% on it?

Answer 1

The tax rate on ordinary dividends is not 15%. Ordinary dividends -- by far the most common type -- are taxed at your marginal rate. That could be anything from 0% to 35% depending upon your total income. Qualified Dividends are taxed at the long term capital gains rate, usually 15% unless your marginal rate is 15% or lower where it is 5%.

Answer 2

1. No. Dividends are not taxed at a higher rate than your bracket.
2. Currently, for qualified dividends, it is 15% for persons in brackets above 15% and either 0% or 5% for persons in the 10% bracket and maybe even the 15% bracket.
3. Dividends that are not qualified are taxed at the regular rate (whatever bracket the person is).