AARP POSITION ON UTILITY ISSUES PROVES DISAPPOINTING ONCE AGAIN

AARP, the American Association of Retired Persons, has been missing in action in the fight to keep dividend taxes from rising. Now they’re attacking electric utilities which must raise rates because of higher fuel costs. People who rely on a lifetime of investment to finance their own retirement must consider two things:

 Allowable Return on Investment – The private companies in which they invest must have a fighting chance to make a profit in order to pay a dividend and maintain a healthy stock price. A company must make money to pay out money in dividends. That’s why WUI works to ensure fairness in Wisconsin utility rate setting.

 Fair Taxes on Dividend Income – Most retirement dollars are invested for the long term to produce the kind of dividend that can pay the rent during retirement. That invested money was already taxed when it came home in a paycheck. Taxing the portion of income needed to keep up with inflation over those years as income a second time is doubly unfair.

So when WUI and others were telling Congress how raising the dividend tax from 15 percent to as much as 39.6 percent would hurt retired investors, how much help did they get from AARP? The answer is none. Now AARP has started a blanket campaign against “unfair” utility rate increases. Rather than examine each proposal to determine whether the company is merely recovering costs caused by more expensive fuel and environmental compliance, they are calling for general opposition. An organization that claims to represent retired persons needs to care enough about retirement income to be up front about who will pay for higher energy costs. If energy users don’t bear the cost of the energy they use, the shareholders will. That means lower dividends. And lower dividends mean lower incomes for many retired persons. Seventy one percent of WUI members are retired people who rely on the dividends that can only come from companies allowed to make a fair profit. We will continue fighting to maintain the incomes our members have saved for and rely upon. We would welcome AARP to help us represent these retired persons as well.

by Robert Seitz, Executive Director, Wisconsin Utilities Investors

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