The Withholding Tax

After the reduction of savings and the increase in sales tax exemptions now comes a new hammer to the German savers. The flat rate withholding tax takes in all of 2009 generated income from investment income. The withholding tax rate is 25% plus solidarity surcharge and church tax (added up 28%). Particularly affected are investors to achieve the gains from the purchase and sale of securities or fund units. These were previously exempt, if the holding period was at least 1 years. The withholding tax for equities will also contribute to the eventual dividends. These have been taxed according to the half income. Advantages arise only in fixed income securities, or fixed-income investments. This previously had to be taxed at the personal tax rate. If this above 28%, this means a saving, since no investment is required for these capital gains. Makes it particularly hard savers on low incomes who save for retirement conscious. Fund savings plansabout 20 or 30 years were previously exempt. In future, the expected profit decreases by almost one third. This is in clear contradiction to the statements about the need for private pensions. Effective exactly those to be punished, which today have deliberately decided not to use to generate an acceptable income in old age. A tragic side effect of the withholding tax will be the increased inflow into tax efficient products. This is often not very transparent and cost deals typically generate low returns anyway. A proverb says, like the German dispensed to 20% return, when he reaches 10% tax benefit. How true is this phrase that shows the number of life insurance contracts in Germany, this is higher than the population. The problem of poverty in old age is reached in the coming years, new dimensions, there are ways out for the vulnerable little. Taxation point of the lowest forms of investment remains generally reserved for those who already own property

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