U.S. Apple investors, beware looming expiration of Bush era tax cuts

“What’s better? Capital gains and dividend income, or just capital gains? News that Apple plans to pay out $2.65 per share per quarter starting later this year has more than a few scurrying to answer that question,” Robert Powell reports for MarketWatch. “Under current law, taxpayers in the 10% and 15% tax brackets don’t pay any taxes on long-term capital gains and qualified dividends, while those in the 25% to 35% tax brackets will pay a 15% tax on long-term capital gains and qualified dividends. In essence, having long-term capital gains and/or dividends didn’t really matter all that much. (Short-term capital gains and qualified dividends, by the way, are under current law taxed at a maximum rate of 35%.)”

Powell reports, “But come 2013, all that is scheduled to change, making the question about Apple and its dividend less academic. Yes, the so-called Bush tax cuts are scheduled to expire. And that has investment and tax professionals talking in general about the need to start harvesting gains — now.”

“Consider: In 2013, the maximum tax rate will rise to 21.2% on long-term capital gains and 40.8% for short-term capital gains. The extra 1.2% is due to the return of the 3% disallowance of itemized deductions for income earned above a threshold, according to Bernie Kent, J.D., CPA, and managing director of Telemus Wealth Advisors,” Powell reports. “In addition, beginning in 2013, the new federal health-care program imposes a 3.8% tax on the investment income, including capital gains, of high-income taxpayers. ‘These two changes would result in a combined 66 2/3% increase in the maximum federal income tax in the long-term capital gains rates on the sale of stock in 2013 compared to a sale in 2012 (a 25% rate compared to a 15% rate),’ Kent wrote in the LISI Income Tax Planning Newsletter #25. ‘Further, if President Obama’s proposed ‘Buffett Rule’ is enacted, millionaires could face a minimum tax rate of 30% on their long-term capital gains as early as 2013.'”

“What’s more, starting in 2013, the distinction between ordinary and qualified dividends will disappear, and all dividends will be subject to the ordinary tax rates, which are scheduled to change in 2013 as well. Absent any legislation, the 10% rate will be collapsed into the 15% rate for 2013; the 25% rate will become 28%; the 28% rate will become 31%; the 33% rate will become 36%; and the 35% rate will become 39.6%,” Powell reports. “And so the question of having capital gains and dividend income with Apple (or any other stock for that matter) is more than academic. Now one has to figure out what the best course of action might be. Sell this year and pay taxes at current rates? Hold and pay taxes on dividends at this and next year’s rates? Or pursue some other course of action?”

Read more in the full article here.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

Related articles:
Apple’s dividend move puts spotlight on foreign cash holdings, repatriation tax reform – March 20, 2012
Apple: Good start; and what about the overseas cash? – March 19, 2012
Apple’s foreign cash hoard piles up: $54 billion and rapidly growing – January 11, 2012
Senator John McCain eyes Apple’s $54 billion overseas cash pile – November 3, 2011
Google joins Apple in push for U.S. repatriation tax holiday – October 3, 2011
Apple lobbies Obama for tax holiday, wants to bring overseas bounty home – August 24, 2011
U.S Senate Democrat Schumer allies with Apple, other multinationals on repatriation tax talks – June 21, 2011
U.S. companies push for tax break on foreign cash – June 20, 2011
Apple, Oracle, Duke Energy, others organize lobbying blitz for tax holiday – February 17, 2011


    1. More Communist HELL from the HATERS on the left!!!!! When is enough, enough for you thieves!!!!! GET your FREAKING HANDS out of my BANK ACCOUNT!!!!!!!!! Why are liberals so EVIL!!!!

            1. NEWS FLASH:


              It’ officially over. Everyone but the tiny, minority of lemming-drones has figured it out and will be voting his lying ass out this November!!!!!!!!!!!

            2. “This is all it takes to get you people going.

              Reexamine your lives.”

              If this doesn’t get you going with extreme worry as to what is being done to the US in the name of Socialism, you need to reexamine yourself.

        1. Yeah right. That’s why you always catch the Democrats with a freezer full of cash bribes and what not. Liberals are pure, disgusting, slime, on an all out mission to make everything utterly worse for everyone.

          Conservatives want to make the standard of living better for everyone by bringing everyone up through hard work and Capitalism. That’s too complicated for you Lemmings to comprehend though. Losers.

          1. Ahem. That was one liberal with one freezer full of cash Exaggerate much? You must work for Fox News (the GOP marketing department). And then you try to sell us on trickle-down economics to boot? Sheesh.

            1. Trickle down is what brought man kind out of the stone ages. The systems before it were complete misery. Just what you liberals wallow in.

          1. Bush Sidius, war-monger. Fake war in Iraq, come on that one is pretty clear cut. Thousands killed and 100’s of billions wasted. Who knows how many 10’s of thousands of innocent people died because of the neo-cons. Republi-sith.

            1. BushBushBush. You liberals are so predictably stupid. Focus on the nightmare of now and your Dear Leader using everything in his power to take out the US. We will vote him out this November. The masses are MAD as hell.

            2. Darth Sidius used every scum sucking Democrat tactic in Star Wars. Lies, deceit, threats, violence. You have it backwards like a true liberal liar.

        1. There are thieves everywhere. But the percentage of thieves that are libroTARDs of the group is vastly higher. You have the complete idiot Drones that actually believe Maobama and friends really care about them and their cause de jour. The rest are liberal mouth breathers that have such pathetic lives and self respect that they are just willing to go along with anything. Like a a cult member. Really sad and very pathetic…..

    2. F10T12, you have to pay for the goods and services that you want. Bush cut taxes and promised that economic growth would result in greater tax revenue and greatly reduce deficits despite higher spending. Tax cut and spend did *not* work. And classifying the expiration of ill-advised tax cuts as “tax increases” is disingenuous.

      Sure, I would like lower taxes. Who wouldn’t? And I also want lower government spending overall. However, one of the major differences between us (and they are legion) is that I advocate cutting spending first. Let’s prove that we can cut spending and demonstrate a reduced deficit. Then we can talk about reducing taxes. The current “tax cut first” approach doesn’t work because government spending buys votes for *both* political parties and borrowing is far easier than facing the difficult decisions needed to reduce spending. Besides, once a tax cut is enacted it is difficult to repeal.

      What is the ideal tax rate that you are seeking? Cutting taxes to increase government tax revenue will only work if the tax rate is high enough to significantly inhibit growth. What we need is a simplified tax structure and reasonable tax rate(s) that, when coupled with more austere government spending, eliminate the annual deficits and enable us to begin gradually reducing the accumulated debt. I don’t hear anything like that from you or your cronies. All you can say is put in a Republican and everything will magically improve. Well, it didn’t under Bush, and his administration ended with a near-Depression and two active wars in the Middle East and Southeast Asia. Forgive me if I have not forgotten the not-so-distant path and cast a highly skeptical eye on your simplistic viewpoint.

      There are no simple answers for the problems faced by this country.

      1. Hey! That’s what I was trying to say.

        Can I be an American and just want the best policies for my country? Sometimes it’s lower spending, sometimes it’s higher taxes, sometimes it’s Republican ideas, sometimes it’s a Democrat’s time. Is there something wrong with being American first?

        No one here is evil, that’s way to easy. The world is complicated, sorry about that.

        1. You’re not an American. You’re a Communist he wants to bring down the US. What you brain dead zombies want to do is collapse the US. Cloward Piven……

      1. Really? You must be a big gubmint Democrat bureaucrat.

        The real citizens, on the other hand:

        “In general, are you satisfied or dissatisfied with the way things are going in the United States at this time?”

        Dissatisfied – 72%
        Satisfied – 26%
        Unsure – 2%

        Gallup, March 8-11, 2012. N=1,024 adults nationwide. Margin of error ± 4

        1. And voters apparently felt much the same way in the 2007-2008 timeframe, as well…

          Besides, that is such a bogus and unscientific question. The aggregate response to that poll mean nothing (in general). I have general dissatisfaction about a lot of things unrelated to the performance of the federal, state, or local governments. For instance, I am generally dissatisfied with people like you who are so easily manipulated.

          1. The only thing that is bogus KingHell is Liberalism-Marxism-Socialism-Communism-Dictatorshipism.

            You are the manipulated one you lemming. Your only dissatisfaction with government is that they are not steeling more from the producers.

        2. You all are idiots that listen to fox news. Nobody loves Obama but the Obama protectors, besides everything he did was because of the Republicans. Obama is a push over!! The real evil in your country is all of the politicians! Not just one group! They are ALL bought by banks and companies wanting to make a quick buck. You guys need to realize that the real evil is your system. Politicians being bought is ruining your country! When will the people of the USA realize this? You all are a bunch of brainwashed idiots, the true heroes in your country are fighting to stop this. Occupy is where you ALL should be if you want your country to survive. Another ressecion is coming and your all to dumb to realize it. Almost all of the world leaders know that it is coming!

          1. You are such a jack ass. Maobama an you drones blame everyone else for your pathetic, sorry, lives, and your mistakes, which you only know how to make.

            Keep watching PMSNBC, Lemming-Mouth-Breather!

    1. I don’t suppose that you have seen a graph of the annual U.S. deficit from 2000-2011 showing the consistently high deficits under the Bush administration ramping up towards $1T just as he left office with a busted economy, a corrupt and failing financial system, job losses of 750,000 per month, two active wars, and an expensive drug card program pandering to big pharma?

      Or the turnaround to a still large, but decreasing deficit in 2011 despite the fact that economic growth is hard to find when interest rates were already near zero.

      All it takes is one little factoid to comfort you and strengthen your feeling of being “right.” How about considering ways in which the country can pull together to make intelligent choices and compromises to achieve progress?

      1. All is takes is a minority of LIb-Row-Tards to get elected King Hell, to destroy the US. You’re BS isn’t fooling a single, normal person here. The drones eat it up like the mouth breathers they are. Now quick, get back to Rachel Madcow.

    1. No, it means that you can’t do the math. See my post below. Obama is playing you for a fool. It’s all just political class warfare bullshit.

      Great Presidents don’t turn citizens against each other for political gain.

      1. Obama tries to provide health care to save your lives. Invests in our collective future and fix all the Bush recklessness.

        Republicans defend the wealthy and give money to corporations and call it capitalism. If you don’t compete for it it’s called cronyism. Bush sends your sons to die in a fruitless war and you cheer? Obama tries to balance spending towards giving everyone a chance and you crucify him. What kind of thinking is this?

        1. Maobama tries to shove MaobamaSCARE down the US population’s throats against their wishes to gain more power over the population. If you think Obamination gives a flying crap about our health you are as brain dead as your posts make you out to be. Anyway it’s unconstitutional you Lemming.

          1. Would you rather live in Sweden? high taxes, universal health care, minimal war spending, democratic, low inequality

            or live in Pakistan? very low taxes, no health care, lots of military spending, high inequality

            Are all countries that provide health care for their people bad? All of our allies do it (REAL allies, not Pakistan)

            1. No I would never want to live in Freakville Sweden.

              You should move to Pak-e-staaaaan though. Try to preach your liberal nonsense to that population and see how far it gets your sorry Lemming ASS!

          1. ecrabb,

            they actually know you’re right but they are lemmings and can’t help themselves. they will keep regurgitating Democrat talking points over and over again. they’ve been brain washed and need government assistance fast. quick let raise taxes again……

            Liberals double suck!!!!!!

      1. That kind of attitude is why you’ll always be working for someone else. Republicans don’t care about you if you’re not rich or a corporate donor. Why vote against your own best interests as a middle-class person or below?

        1. A middle-class person’s, or below’s, best interest would be to get the spending under control, get the ObamaCare bomb defused, and get the country working again.

          That’s why I’m voting for Romney.

          1. The Affordable Care Act puts people’s lives ahead of money and STILL reduces the deficit. Bush took a budget surplus and turned it to a big deficit and there was no bomb to be defused. It’s not a party thing. This just makes no sense

      1. There aren’t enough rich people. When will you lemmings learn. You want to ruin the entire nation because you are brain dead, Ignoramuses. Pathetic. Everyone does better under lower taxes, and a humming along economy. You morons are being played by the liberal power that be and you’re too stupid to realize it. Pathetic.

        1. So what you want to punish the middle and lower taxes for lower taxes for the rich? They will raise your taxes to helP people that give them money! When will you realize this? Actually listen to the republicans talk their imbisles! Maybe you should form an opinion that is best for you not the rich you brainwashed scum!

          1. Since you asked… Depends on who you tax and how you spend it. We have disproportionately low taxes for the wealthiest Amercians (Capital A dammit!) and relatively high spending on nonproductive items like the military ($700B+ annually) The current abnormally low tax rate for the top, let’s say 0.5%, creates a class of people that can overly influence political outcomes to sustain their wealth, influence media and thoughts as you see from many of these posts and decrease income mobility which has been unfortunate the past 2 or 3 decades. The effect is less democratic outcomes, certainly NOT 1 person 1 vote and a tilting of laws and regulations to impede competition which is NOT very capitalistic. Much more but you get the idea.

            Looking at history and other societies our current pace does not lead to a more democratic and competitive society. This is just a pattern that has repeated itself many times. Our heyday of dominance was during the 50’s and 60’s when tax rates were as high as 70% (56% average after deduction and such) and we had high growth, low inflation and enviable equality which helped us culturally. Economics dept. clue: those 3 things tend to go together.

            1. I realize an MDN comment thread isn’t conducive to an articulate exchange of ideas, and I don’t have time to go into great detail, anyway.

              But, I have two points in response to your post:
              1) Yes, the wealthy have disproportionate political influence, but they’re also extremely insignificant in terms of numbers. For every wealthy person, there are 50 who pay almost no income tax.

              The political influence by the wealthy is spread across the political spectrum just as it is in the general masses. Just as with the middle class, the extremely wealthy are both liberal and conservative, and both Republican and Democrat.

              2) The 50’s and 60’s were massively different in many, many other ways than just tax rates. Correlation does not imply causality, and those three things you mentioned only went together at that one point in history. Speaking of economics, what principle mechanism explains how huge top marginal tax rates on the wealthy spurs growth or reduces inflation.

              Take a look at what else was going on in the 50’s and 60’s and you’ll realize it wasn’t the magic of taxing the wealthy that made the economy work. It was post-war rebuilding and the US as a world manufacturing production leader, and it drover our economic massively. There are a whole host of other reasons the 50’s and 60’s were great economically, but they were that way in spite of taxation, not because of it.

              The times have changed. The good times then and the (relatively) bad times now were not and are not directly caused by high or low taxes.

            2. Above, where I was talking about political influence, I meant to say that “For every wealthy person with a certain political influence, there are another 50 who pay no income tax, but who vote in elections.” My point was there is that rich or not, there power in numbers.

          2. A+ to you just for not throwing out random insults and asking a question.

            You are exactly right tax rates don’t make the good or bad times at any given point but they do influence equality and long-term that does improve the economy for everyone, more customers, steadier growth and more skills across the board. Taxing the rich won’t make jobs go away and they never have, just a scare tactic. Don’t guess look at history and other examples.

            No matter what political stripe the rich are, why should they get more of a vote than you or me? That’s the point not whether I agree with them or not.

          3. You do realize that majority of the US Population make 60,000 or less a year. Almost not enough to live on. And you are asking them to pay more taxes?!? You are brainwashed scum just like people that watch fox news. It is so sad to see your country deteriourating like this!

            1. Flea Par Itch,

              That’s enough to live on depending on where you live. That’s what is great about the US. There are many options. If you lemmings would make your dear leader enforce the illegal alien laws and lock down the border you would have more jobs. But no you cluelessly meander along spouting LiberalTARD-Drone talking points. Man have you been had!!!!!

              Keep watching Rachel Madcow and Ed Shultz over at PMSNBC, Lemming-Boy!

            1. No the employment rate was low, the economy was great, gas prices were low. You were still in your mommy’s basement, clueless as usual…..

            2. Citizen ZERO loves it when the hard working, responsible part of the population spoon feeds him like the infant mind that he is.

              You reside in your own little Democrat, Lemming, fantasy world.

            3. nelle,

              I see your husband your cousin let you at the computer again. Spare me the righteous indignation. You do not know me nor will your feeble mind even understand me if I crapped on your face.

              Get a life.

            4. Imagine for a minute actually living in that hell of a brain that CitizenCommie resides in…. Pure hell to be it. Mad at the world. Unable to make it on it’s own. Having to beg from conservatives for scraps instead of getting off it’s ass and making it on it’s own. What a complete and utter LOSER!!!!!! No wonder it votes DEMO-TARD!!!!

            5. Thank doG you can read my mind, you small minded idiot. As far as making it in the world you do not know me. You were not with me when I met Gates, Job and Osborne while managing the Byte Shop and creating the greatest computer retail organization bar none and that includes the Apple stores that are pretty much a copy of what we set up in the early 80’s. Were you that salesperson that sold over a million dollars of computers to schools in 1983? Were you the one in this TV show. http://web.me.com/citizenx1/WeBeMacnNow/Movie.html .

              I didn’t think so. I was selling computers before you were born punk. I was the state of the industry before you farther wasted his seed on you.

              You don’t know me punk.

  1. Sell it this year in December @ $700 a share then invest again in January. I’ll be on the AAPL train til it reaches $1000 a share.

    This is a generational wealth building opportunity. Don’t let taxes scare you away.

  2. The entire Buffett Rule is false. Obama thinks the U.S. voter is stupid (and, judging by the White House’s current occupant, they are – exceedingly so).

    It would bring in just just $31 billion over the next 11 years. That figure would be a drop in the bucket of the over $7 trillion in federal budget deficits projected during that period. It is also minuscule compared to the many hundreds of billions it would cost to repeal the alternative minimum tax, which Obama’s budget last month said he would replace with the Buffett rule tax.

    The “Buffett Rule” really is “Omaha Hokum.”

    “President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.” – The Associated Press

        1. Says the person who’s an effing lemming communist. Bush is light years better than the Kenyan-illegal-allien-friend to terrorists and America Haters, in chief!

          Bush didn’t hide his college records or birth certificate and had a real social security number. You piece of trash!

          1. So I’m guessing you’re not a big follower of Martin Luther King or Gandhi? We can use our brains for much better than a comment like this.

            Bush didn’t get Osama by the way, he took his eye off the ball and chased ghosts in Iraq. A plutocracy is a government for the rich who go to fancy schools and use their family connections. I like a person who gets there on their intelligence and hard work… just feels more democratic that way

            1. The only reason MaobamaTARD got Bin Ladin was because of the ground work GWB laid down despite the opposition from the DemoTARDS and Holder, the terrorist Lawyer…….

              And then he took credit for it and barely thanked the seal team! Incredible!!!!!

              Unbelievable. You can’t make this stuff up. Liberals are EVIL!

            2. Maobama and Comrades sure aren’t followers of Martin Luther King. Maobama and Comrades are all about class warfare. The effing idiot never had a real job in his life let alone real birth certificate, college records, and social security number.

              Liberals ARE RACISTS!!!!!!!

            1. Look in the mirror Lemming. You’re going to get a reality check on what a majority is this November when your Marxist Utopian dream world comes apart at the voting booths. LOSER!!!!!

    1. Get rid of the military. All they do is kill innocent people and end up causing more hate towards the US. It will save all the money we need, but we will have a lot of republicans on welfare afterwards or we just get rid of welfare too and have no worries.

      1. That wins the one of the most ridiculous lemming posts awards.

        And then what happens after you get rid of the military Genius?? We get attacked, that’s what. You are cluelessssssss!!!!!

  3. I agree, cut taxes to zero for capital gains. Cut them to zero for corporations. And cancel medicare, medicaid and social security. People should have been smart enough to insure they can retire and pay for their own medical bills. I am tired of paying taxes to pay for someones hip replacement on medicare. If we just got rid of medicare, medicaid and social security we could balance the budget. And cut out all federal subsidies to states and cities. Close the EPA, FDC, FBI too. Just take in enough to pay for defense. Let the states take care of themselves. Let us get rid of the presidency, the do nothing good congress and the entire federal judicial system. Let the states worry about who marries who and who has to let who set at the lunch counter. The liberals could congregate on the east and west coast, the real white americans could keep the rest. Then we would have utopia for all.

    1. Ah, the old overstate the argument to ridiculous levels in an attempt to draw attention away from the fact that liberal policies have failed yet again.

      The Ryan Budget Proposal, if you actually read it, demonstrates that real progress can be made on deficits – but only if you have grown ups in charge.

      We’ll fix this in November.

      1. And every other myriad of assault on business, capitalism, the economy, freedom, the constitution, happiness, religion, on so on. Fines, fees, red tape, barriers to doing business. It’s all being done on purpose people to take down the US.

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