Congressional Tax Writers Call For Change In Effective Date Of 15% Dividend Tax

by Mike Godfrey, Tax-News.com, Washington

30 January 2004

Congressional tax writers have stated their intention to make the new 15% dividend tax rate apply to dividends received from January 1st 2003 in a plan that aims to benefit “millions” of shareholders and mutual fund investors.

In a letter sent to Assistant Secretary for Tax Policy Pam Olson and IRS Commissioner Mark Everson on Tuesday, the Congressmen revealed that they will use a bipartisan measure known as the Tax Technical Corrections Act of 2003 to force the proposal through.

“In December, we introduced the Tax Technical Corrections Act of 2003 (H.R. 3654; S. 1984) as a bipartisan measure to clarify, among other things, various provisions in the Jobs and Growth Tax Relief and Reconciliation Act of 2003 (“JGTRRA”) relating to qualified dividend income taxable at a maximum rate of 15 percent,” stated the letter, which was signed by Sen. Chuck Grassley, chairman of the Committee on Finance, along with Sen. Max Baucus, ranking member; Rep. Bill Thomas, chairman, Ways and Means Committee; and Rep. Charles Rangel, ranking member.

“We intend to seek enactment of this legislation at the earliest opportunity during the second session of the 108th Congress,” they declared, adding:

“We advise you of our intent so that you may minimize taxpayer burden and facilitate the administration of JGTRRA by allowing taxpayers to apply section 2 of the Tax Technical Corrections Act of 2003 as if presently enacted.”

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