dividend investors in November.
In fact, an Obama victory could hit income investors with something of a double whammy.
You see, for dividend investors it isn't simply just a matter of higher tax rates, the changes President Obama has in mind may result in fewer dividends paid altogether.
You can chalk it up to the law of unintended consequences.
Let me explain.
Thanks to the Bush tax cuts of 2003, dividends are currently taxed at 15% to individual investors.
The rationale for the change was that dividends are paid from income that has already been taxed once at the corporate level. It means the total top federal tax rate on dividends, including the 35% corporate tax, is currently 45% (the net received is 85% of 65%).
Even with the tax break, that's still higher than the top 35% rate of personal income tax.
That's bad enough, but even if the Bush tax cuts are renewed before the "fiscal cliff" strikes at the end the year, investment income will suffer an additional 3.8% tax starting on January 1 to pay for Obamacare.
That means the total tax on dividends could jump to a whopping 47.2%.