Citing the fragile U.S. economy and the need for tax policies to promote recovery, a group of 47 House Democrats sent a letter to House Speaker Nancy Pelosi on Sept. 24, urging Congress to extend the current preferential tax rates on capital gains and dividend income. These legislators agree with manufacturers that lower rates on capital gains and dividends encourage savings and investment and benefit businesses and individuals alike.

Unfortunately, if Congress doesn’t act, tax rates on investment income will go up on Jan. 1, 2011. These tax increases will put a wet blanket on economic recovery. With tax rates on dividends at 40 percent or higher, there will be less capital for companies and job retention and creation efforts will suffer.

The National Association of Manufacturers’ latest Capital Briefing online newsletter summarizes the major tax issues at stake as the 111th Congress comes to a close and the 2011 expiration date nears. See “Focus: Congress Must Extend Low Tax Rates to Help Manufacturers.”

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