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Granddaddy
01-27-2011, 04:17 PM
I thought about the ignorance related to gun control and then thought it pales in comparison to the ignorance related to the rich paying more taxes. The ignorance about gun laws is nothing compared to the continued idea in Washington that government (& more government regulations) is the answer to any of our current problems. The only answer is less government, lower taxes, lower spending, no nat'l debt and a balanced budget mandated by law.

Everytime I here the idea that we have to stop giving tax breaks to the wealthy I cringe. Because in the next breath some politician says we have to create more jobs. The obvious question is, who creates jobs? Not the government (even for all its bailouts & stimuluses). It's the private sector and its not those who work for a wage. It's the business owners & the entrepreneurs. The top 10% of those taxed already pay 90%+ of the taxes. Asking them to pay more? The direct effect of those "fat cats" paying more taxes is jobs lost.

I'll give my personal example. I owned a successful aerospace design & manufacturing company that was started by myself & 3 others. We incorporated as a sub-Chapter S corporation. For those of you who don't know, that is a tax choice most small businesses make. It means the company pays no federal income taxes directly. Instead any income is divided/distributed among the ownership. In most cases this means, at the botton line, it will mean an approx 5% tax break versus being a C-corp like large businesses & pay corp income taxes directly. Companies can choose s-corp status if there are 100 or less stockholders. For other federal considerations a small business is defined as employment is under 500 employees and revenues under $250M.

But let's look directly at my company, we eventually grew to approx 200 employees and had revenues of $40M when we sold the company. The four owners eventually drew an annual salary of $150K each (none at first). In the last 5 yrs, we reported distributions of approximately $8-10M annually. According to Obama, that makes me one of the fat cats, the rich millionaires. But remember, I only drew a salary of $150K. And we never actually distributed the margins of the $8-10 million. Instead we put the money back into the company, into expanded employment - except what we had to pay in taxes. Unfortunately, I had to report income of not only my $150K salary but also K-1 distribution of the 1/4 of our business earnings. Meaning my taxes were over $250K per yr for several yrs., even while my salary was only $150K. So instead of being able to put that money into additional jobs we had to pay taxes. Had we been able to hire additional employees and grow faster we would have put many more tax paying employees to work to exceed what the IRS collected directly from me. But politicians (because they never ran a business) and most wage earners don't understand the effect of taxing small business owners. While small businesses such as mine employ most of the people in this country, Obama says these fat cats should be paying their fair share. The result is lower employment. Things are never as simple as the politicians want you to think. While the real fat cats are those born with a silver spoon in their mouths, collecting their income passively from stock appreciation, dividends, etc based upon wealth accumulated by an earlier generation, our politicians don't seem to be able or willing to make a distinction that would make a difference in creating a lot of jobs - stop taxing small business owners as if they are rich millionaires. If that were done, overnight we would have no employment issues. But instead its politics as usual.

And by the way, when we sold our business, under Clinton, we still had a 45% capital gains tax. So we were taxed yet again on what we invested.

duckheads
01-27-2011, 04:40 PM
Excellent post!

huntinman
01-27-2011, 06:46 PM
According to Obama, you are greedy and still haven't paid enough. Come on fork it over!

hotel4dogs
01-27-2011, 07:22 PM
great post granddaddy. Please run for president, I will vote for you.

Franco
01-27-2011, 07:41 PM
Your first paragraph says it all!

Marvin S
01-27-2011, 10:11 PM
David, Great post! Unfortunately you are in the minority - relatively few sign a paycheck, most just want to recieve one with the associated bennies. & that includes a lot of folks here. Being an owner with it's associated headaches is not where they want to go. That's why it's hard to get an in depth discussion going on this subject. Post something about investing & the usual culprits have something less than intelligent to post. But that's OK, someday they will regret that decision.

We owned a business - everything was a cash transaction to get it going. When I went to the SBA in Feb 1969 to see about a loan on the advice of the local banker they were all out of money, but they were all on the payroll. They did not appreciate my comment of "what are you doing here if you have no money to lend".

We spent the 1st 10 years plowing everything back into improvements, & though there was no profit we got dinged for B & O tax by the state to the tune of 10 more kennel runs. & when we sold, on contract, all risk was ours. But the Feds & the State shared in the sale. When the contract was paid off we got stuck for Capital Gains at that rate rather than the rate in effect on the day of the sale. Double.

We eventually made a little & just as it was rolling in somebody decided they wanted to buy & met our price. The business is still going after 41 years as they improved the ambience. I was never very good at saying something was good when it wasn't.

So I started investing. I do my level best to avoid taxation & have set it up so those dear & what's dear to me will get ALL of what's left.

wayne anderson
01-27-2011, 10:20 PM
My (small) estate planner/will writer/attorney said his ideal estate plan is when the check to the undertaker bounces!

Steve Hester
01-27-2011, 10:25 PM
The only fair tax is a flat tax, but it will never happen.

Goose
01-28-2011, 08:45 AM
Half of America doesn't pay taxes (mostly democrats) and they all think that higher taxes on the wealthiest Americans will solve their problems. There's also something like 45 million Americans on food stamps, social security is bankrupt and unemployment is probably north of 20% and they also think that higher taxes on the wealthiest Americans will solve their problems. So the democrats continue to play this class warfare game because it works with these voters. In fact, if you take away the democrats two best weapons (soak the rich and keynesian sodomy) their entire party would disappear. What good's a democrat if he can't spend someone elses money or even create it out of thin air?

Anybody watching Egypt? Seems like the 'folks' over there have figured it out and are taking action. Not a bad idea and it's coming to our shores soon enough and you can thank Obama and the Ber-nank. It would be nice to be able to follow what's happening over there more closely (and take notes) but the Egyptian government has turned off internet access, texting, etc. Obama wants one of them internet kill switches, too. Maybe he'll get it eventually but he's busy right now trying to outlaw guns. Those freaking bitter clingers.

We live in Cuba now.

sinner
01-28-2011, 09:28 AM
Lets get term limits and flat tax.
Take a look at Weld County in Colorado, not a bad model.
I see no evidence about out lawing guns just the ones like the AK 47/30 plus clips.. I have hear this from the NRA folks for years> Question: Do you still have your guns? I have mine!
Those that posted about their companies a question: How many contracts did you have with government agencies?
How were you educated, tax payer dollars or ? and how much productivity/profit did each of your emploees contribute to you business? A few years ago Bill Coors (yes I was one of those being paid by the company) asked me to read a book; "Profit without productivity". I suggest you read it at this time in our workds history.
My guess is most of you have "profited by living in the "poorly run" country!

Leddyman
01-28-2011, 10:02 AM
I haven't seen any of the usual tax n spend libs around here post up to contradict the evil greedy capitalists. Hmmm....wonder why?

Buzz
01-28-2011, 10:06 AM
I'm not going to get into the question of whether the rich should pay more taxes or not. I just wanted to ask a few questions to clear some things up in my mind.

It does not seem fair that you should pay taxes on money that you're not getting. It sounds like you were paying taxes on your $150k salary, plus your 1/4 share of the business earnings an amount somewhere between $2 and $2.5 million during the last 5 years you were in the business. It's likely that your tax bill was more than your salary.

Did your company distribute the amount necessary to pay the taxes on the retained earnings?

So you're saying that you could not reinvest all of your earnings, only earnings minus the tax?

When you reinvest retained earnings, does that increase your basis in the company?

In most of these entities you are only able to take losses up to the amount of your basis. If the company later lost money or went bankrupt could you then have deducted the amount of your increased basis as a loss?

If the company builds up enough cash at some time, can it distribute this cash to its shareholders or partners essentially tax free up to the level of their basis in the company?

When you sell your company and calculate your capital gain, can you subtract the amount of your basis in the company from your share of the sale price?

paul young
01-28-2011, 10:13 AM
Half of Ameri
ca doesn't pay taxes (mostly democrats) and they all think that higher taxes on the wealthiest Americans will solve their problems. There's also something like 45 million Americans on food stamps, social security is bankrupt and unemployment is probably north of 20% and they also think that higher taxes on the wealthiest Americans will solve their problems. So the democrats continue to play this class warfare game because it works with these voters. In fact, if you take away the democrats two best weapons (soak the rich and keynesian sodomy) their entire party would disappear. What good's a democrat if he can't spend someone elses money or even create it out of thin air?

Anybody watching Egypt? Seems like the 'folks' over there have figured it out and are taking action. Not a bad idea and it's coming to our shores soon enough and you can thank Obama and the Ber-nank. It would be nice to be able to follow what's happening over there more closely (and take notes) but the Egyptian government has turned off internet access, texting, etc. Obama wants one of them internet kill switches, too. Maybe he'll get it eventually but he's busy right now trying to outlaw guns. Those freaking bitter clingers.

We live in Cuba now.

ahhh, the old "half of america doesn't pay taxes" claim. please cite a source for this revelation.

social security is nowhere near bankrupt, and you know it. do you know anyone who has not received the benefit check that they were eligible for?

you are now advocating a coup and civil war?

you don't live in Cuba- you live in your own LITTLE world.......-Paul

Doc E
01-28-2011, 10:31 AM
Extra taxation for success.................Stupid, stupid, stupid.



.

luvmylabs23139
01-28-2011, 11:20 AM
There are many sources that state at least 47% pay no federal income taxes. Those are 2009 numbers.
Even you can find that info with a simple google search.

hotel4dogs
01-28-2011, 11:27 AM
I want to know the names of the 4 people I am supporting by paying so much in taxes so that I can at least claim them as dependents.

TxHillHunter
01-28-2011, 11:35 AM
I want to know the names of the 4 people I am supporting by paying so much in taxes so that I can at least claim them as dependents.

:lol:

Now THERE is an idea!

Excellent post from the originator describing the perils of building a small company and trying to grow it....and employ more good folks.

Buzz
01-28-2011, 11:39 AM
There are many sources that state at least 47% pay no federal income taxes. Those are 2009 numbers.
Even you can find that info with a simple google search.


I wonder if our tax system has anything to do with this?


Wednesday's Congressional Budget Office estimates indicate the government will have to borrow 40 cents for every dollar it spends this fiscal year, which ends Sept. 30. Tax revenues are projected to drop to their lowest levels since 1950, when measured against the size of the economy.

duckheads
01-28-2011, 11:57 AM
[quote=paul young;740304]
social security is nowhere near bankrupt, and you know it. do you know anyone who has not received the benefit check that they were eligible for?quote]

you do realize ss is now paying out more than it is collecting? Where will this lead to?

luvmylabs23139
01-28-2011, 12:11 PM
I wonder if our tax system has anything to do with this?


Sure and it is done by both sides of the aisle.
DINKS get slammed by the left and right.
Wish I could claim "my kids" as dependents! and get that nice per dependent under a certain age credit to boot.
4 four legged kids times 1000 credit would be nice.
Instead I pay to support someone elses human kids.
I pay insane property taxes because I have land for the dogs yet I use very little public services. NO schools etc.
The person down the street pays 1/5 my property taxes yet uses much more public services. They have 6 kids in school.

paul young
01-28-2011, 01:26 PM
[quote=paul young;740304]
social security is nowhere near bankrupt, and you know it. do you know anyone who has not received the benefit check that they were eligible for?quote]

you do realize ss is now paying out more than it is collecting? Where will this lead to?

a higher rate of FICA tax, i hope. that's the responsible way to handle it. if you're lucky enough to work for 40 years or so at a good paying job, you'll qualify for the maximum benefit. right now that's just shy of $21,000 per year, which is around 35% of what it takes for a husband and wife to maintain a decent standard of living, assuming they don't have a lot of debt. it's not a lavish benefit. think about how far that would go if you didn't have Medicare.

you're all a bunch of whiners. i have paid taxes all my adult life and will until i'm dead. that's the way it is. that's the way it's always been. do you think they invented taxation 10 years ago just to piss you off? my parents, their parents and their parents parents paid taxes. if you think we can lower taxes and pay of the debt, you're just dreaming.

where do you think the funding comes from for the national parks, the interstate highway system, national defense, veteran's hospitals, the border patrol, NASA, NOAA, etc. and yes, SS and Medicare. if you don't think you NEED SS and Medicare you are either planning on death at an early age or that you can amass a nest egg of at least $2,000,000 to sustain yourself for the 20 or so years at the end of your life when you are no longer working.

you act like you get no value for your contribution. that is definitely not the case.-Paul

road kill
01-28-2011, 01:32 PM
[QUOTE=duckheads;740374]

a higher rate of FICA tax, i hope. that's the responsible way to handle it. if you're lucky enough to work for 40 years or so at a good paying job, you'll qualify for the maximum benefit. right now that's just shy of $21,000 per year, which is around 35% of what it takes for a husband and wife to maintain a decent standard of living, assuming they don't have a lot of debt. it's not a lavish benefit. think about how far that would go if you didn't have Medicare.

you're all a bunch of whiners. i have paid taxes all my adult life and will until i'm dead. that's the way it is. that's the way it's always been. do you think they invented taxation 10 years ago just to piss you off? my parents, their parents and their parents parents paid taxes. if you think we can lower taxes and pay of the debt, you're just dreaming.

where do you think the funding comes from for the national parks, the interstate highway system, national defense, veteran's hospitals, the border patrol, NASA, NOAA, etc. and yes, SS and Medicare. if you don't think you NEED SS and Medicare you are either planning on death at an early age or that you can amass a nest egg of at least $2,000,000 to sustain yourself for the 20 or so years at the end of your life when you are no longer working.

you act like you get no value for your contribution. that is definitely not the case.-Paul


The key is to retire debt free, or else you are screwed!!!




RK

Granddaddy
01-28-2011, 01:41 PM
I'm not going to get into the question of whether the rich should pay more taxes or not. I just wanted to ask a few questions to clear some things up in my mind.

It does not seem fair that you should pay taxes on money that you're not getting. It sounds like you were paying taxes on your $150k salary, plus your 1/4 share of the business earnings an amount somewhere between $2 and $2.5 million during the last 5 years you were in the business. It's likely that your tax bill was more than your salary.

Did your company distribute the amount necessary to pay the taxes on the retained earnings?

So you're saying that you could not reinvest all of your earnings, only earnings minus the tax?

When you reinvest retained earnings, does that increase your basis in the company?

In most of these entities you are only able to take losses up to the amount of your basis. If the company later lost money or went bankrupt could you then have deducted the amount of your increased basis as a loss?

If the company builds up enough cash at some time, can it distribute this cash to its shareholders or partners essentially tax free up to the level of their basis in the company?

When you sell your company and calculate your capital gain, can you subtract the amount of your basis in the company from your share of the sale price?

I'll answer in order of the questions asked:

Yes, in two of those 5 yrs I paid over $1M in personal income taxes each year but had an actual take home income of $150K.

By definition all profit is distributed to the stockholders of a s-corp via a IRS form K-1. Whether the money is actually distributed or not, the K-1 total must be reported as income. Of course profit is never as simple as having that amount of cash available because the cash is routinely reinvested to some extent in the company as inventory, equipment (i.e., profit doesn't equal available cash). A growing company will normally reinvest a larger percentage than a mature company in order to fund the growth (as opposed to borrowing the money). However the IRS doesn't care, the K-1 distribution is just as much income to them as a salary. So as a company we had to hold back so much cash as necessary to cover the taxes. Which created another problem the year, because I had to report more income than actual salary received because I received the income (via K-1 distribution) to pay the taxes.

Any reinvestment in the company falls generally into one of two categories, capital assets (which should increase the basis) and expenses, which are used to reduce income (employee salaries & wages and consumed inventory are major categories). But again it is not that simple/straight forward. Excess positive cash flow is required to increase expenses without incurring debt.

Basis has nothing to do with income (directly). It only comes into play when a company is sold. And taxes don't increase basis.

Taxes were a major deterrent to hiring. In two of the 5 yrs where we were growing & extremely profitable, we paid over $4M annually in income taxes among the stockholders (4). This $4M would have been plowed directly back into growing the company & would have hired an additional 20-30 engineers ($100K jobs) to further development work. Each of those engineers would have been in the 39% tax bracket. And more importantly would have further increased the growth of our company.

Again, retained earnings are retained (not distributed) & used for capital expenditures which then should increase basis of the useful life of the capital assets purchased. And the rub regarding capital assets is that they can only be expensed (depreciated) over their useful life not as the investment is made (creating severe cash flow issues). K-1 distributions are income (income statement, revenues less expenses), not retained earnings (balance sheet, basis related). All income not otherwise expensed is by definition distributed - remember a s-corp pays no income taxes so any & all revenue not consumed by expenses will be taxed as stockholder income via the K-1 distributions whether actually paid to the stockholder or not.

"In most of these entities you are only able to take losses up to the amount of your basis. If the company later lost money or went bankrupt could you then have deducted the amount of your increased basis as a loss?" I brought this statement down specifically because it is a generalization that is not accurate. Basis only comes into play when a company is sold. I.e., over the entire life of the company certain investments are made that will increase a stockholder's basis. This basis can also be reduced during that same period by reporting depreciation of the investments as they wear out or are used up. Income is never offset by the basis a stockholder/owner accumulates. When a stockholder sells his interest in a compnay he can offset the capital gains received by his basis but not income.

If cash has been reported as a K-1 distribution, it is taxed just like salary - its income to the IRS.

When the company was sold, the stockholder basis is calculated. At that time (1999) the capital gains were then taxed at a 45% rate.

Again small businesses more than pay their share of income taxes, because ALL income is reported via K-1 equal to each stockholder's share & taxes are paid at the rate of the total of salary and K-1 distributions combined. Jobs in the US are driven by small businesses which employ approx 80% of all wage earners in the US. 98% of all small businesses are s-corps, LLCs, partnerships or sole proprietorships and are taxed just like my company was (except that the capital gains rate is substantially lower now). So when politicians want those with incomes over $250K indiscriminately to pay more taxes they are creating the biggest deterrent to jobs grow possible. Instead there should be a distinction between small business owners & those who have inherited wealth. Those who have PASSIVE income from stocks, bonds etc and have income over $250K, OK tax them (they don't create jobs). But don't add more taxes to the very people who create the jobs.

Granddaddy
01-28-2011, 01:45 PM
BTW, to the comments about being a beneficiary of gov paid education etc, I paid every dollar of my college education out of my pocket. No gov loans, grants, no parents to pay. It was soley on me. My dad died while I was a child, my mom was a school teacher, no wealth accumulation there.

And my company won every contract based upon competitive bids.;)

Granddaddy
01-28-2011, 02:05 PM
Half of Ameri

ahhh, the old "half of america doesn't pay taxes" claim. please cite a source for this revelation.

social security is nowhere near bankrupt, and you know it. do you know anyone who has not received the benefit check that they were eligible for?

you are now advocating a coup and civil war?

you don't live in Cuba- you live in your own LITTLE world.......-Paul


Here you go Paul, take note (according to the IRS):

The top 1% earn 20% of the income & pay 38.2% of all income taxes
The next 4% earn 14.73% of the income & pay 20%
So the top 5% pay 58.2% of all taxes
The next 5% earn 11.03% of the income & pay 11.73% of the taxes
The next 15% earn 21.62% of the income & pay 16.43% of the taxes
So the top 25% pay 86.34% of all taxes
Top 50% pay 97.30% of all taxes

Bottom 50% pay 2.7% of all taxes


If you want all the dirty details, here's the info direct from the IRS:

http://www.taxfoundation.org/news/show/250.html

And the COB (Congressional Budget Office) announced yesterday that the social security trust fund is as of yesterday paying out more than it is taking in (technical definition of bankrupt) & would be completely out of money in 2037.

luvmylabs23139
01-28-2011, 02:15 PM
[quote=duckheads;740374]


you act like you get no value for your contribution. that is definitely not the case.-Paul

In all honesty if I had been allowed to invest that money as I chose I would be much better off. Don't bother quoting the dow because that is not where the money would be.
Doing every well right now on my investment rental properties. I would love to have had that gov't taken money in addition invested that way.

paul young
01-28-2011, 02:21 PM
poor Duckheads is taking the heat for my post. i don't know how that happened. that post was in response to Duckheads.-Paul

Goose
01-28-2011, 02:30 PM
Half of Ameri

ahhh, the old "half of america doesn't pay taxes" claim. please cite a source for this revelation.

social security is nowhere near bankrupt, and you know it. do you know anyone who has not received the benefit check that they were eligible for?

you are now advocating a coup and civil war?

you don't live in Cuba- you live in your own LITTLE world.......-Paul

If you think for a minute that social security is anything but a gigantic ponzi scheme you're delusional. There's nothing in the "Trust" fund but a big, fat IOU from the Treasury and in case you haven't noticed we're $14 trillion in debt already. None of the "Trust" fund assets are marketable. They're WORTHLESS! Absolutely worthless. These assets cannot be sold to anybody so our government either has to print more money to cover the social security checks they have to write or borrow money from some moron stupid enough to loan us money. Social Security is flat-ass bankrupt and will not survive for long with 20% unemployment. Bernie Madoff would be proud. Wake up, son!

We live in Cuba now.

paul young
01-28-2011, 02:53 PM
If you think for a minute that social security is anything but a gigantic ponzi scheme you're delusional. There's nothing in the "Trust" fund but a big, fat IOU from the Treasury and in case you haven't noticed we're $14 trillion in debt already. None of the "Trust" fund assets are marketable. They're WORTHLESS! Absolutely worthless. These assets cannot be sold to anybody so our government either has to print more money to cover the social security checks they have to write or borrow money from some moron stupid enough to loan us money. Social Security is flat-ass bankrupt and will not survive for long with 20% unemployment. Bernie Madoff would be proud. Wake up, son!

We live in Cuba now.

2 QUESTIONS, "SON".....

how old are you?

do you plan to or are you now refusing social security benefits?

paul young
01-28-2011, 03:40 PM
Here you go Paul, take note (according to the IRS):

The top 1% earn 20% of the income & pay 38.2% of all income taxes
The next 4% earn 14.73% of the income & pay 20%
So the top 5% pay 58.2% of all taxes
The next 5% earn 11.03% of the income & pay 11.73% of the taxes
The next 15% earn 21.62% of the income & pay 16.43% of the taxes
So the top 25% pay 86.34% of all taxes
Top 50% pay 97.30% of all taxes

Bottom 50% pay 2.7% of all taxes


If you want all the dirty details, here's the info direct from the IRS:

http://www.taxfoundation.org/news/show/250.html

And the COB (Congressional Budget Office) announced yesterday that the social security trust fund is as of yesterday paying out more than it is taking in (technical definition of bankrupt) & would be completely out of money in 2037.

well, according to them, i'm at the top of the bottom 50%. funny thing is, 20% of my wages doesn't feel QUITE like im paying no federal taxes. i don't know ANYBODY who doesn't pay federal taxes. even the people on unemployment pay some federal tax.

addressing your second point: it's clear to me that the rate of taxation for FICA needs to be increased.-Paul

T. Mac
01-28-2011, 03:45 PM
addressing your second point: it's clear to me that the rate of taxation for FICA needs to be increased.-Paul


15% is not enough?????

luvmylabs23139
01-28-2011, 03:48 PM
Paul. let's try federal INCOME taxes. Almost 50% pay nothing. How is that fair to those of us that pay federal income taxes?

paul young
01-28-2011, 03:53 PM
15% is not enough?????

apparently not, if you believe what's being printed. you gonna tell me to my face, after contributing for almost 40 years "thanks for the donation"? if you do, prepare to get your nose bloody........-Paul

paul young
01-28-2011, 03:56 PM
Paul. let's try federal INCOME taxes. Almost 50% pay nothing. How is that fair to those of us that pay federal income taxes?

that's exactly what i was talking about. i actually have 25% witheld weekly. when i file my return, i get about 5-6% back.

who do you personally know who pays nothing?-Paul

dnf777
01-28-2011, 04:08 PM
If you think for a minute that social security is anything but a gigantic ponzi scheme you're delusional. There's nothing in the "Trust" fund but a big, fat IOU from the Treasury and in case you haven't noticed we're $14 trillion in debt already. None of the "Trust" fund assets are marketable. They're WORTHLESS! Absolutely worthless. These assets cannot be sold to anybody so our government either has to print more money to cover the social security checks they have to write or borrow money from some moron stupid enough to loan us money. Social Security is flat-ass bankrupt and will not survive for long with 20% unemployment. Bernie Madoff would be proud. Wake up, son!

We live in Cuba now.


Tell that to the millions of senior citizens who have subsisted on SS, and lived their retirement years with dignity.

Your simpleton comments are totally heartless, and very snobbish and elitist. Of all the BS corporate donations our tax dollars go to, like Haliburton execs, I'm glad to see some of it going to helping fellow Americans...especially the ones who handed us the greatest nation in history.

Why DON'T you go live in Cuba??

Uncle Bill
01-28-2011, 05:32 PM
well, according to them, i'm at the top of the bottom 50%. funny thing is, 20% of my wages doesn't feel QUITE like im paying no federal taxes. i don't know ANYBODY who doesn't pay federal taxes. even the people on unemployment pay some federal tax.

addressing your second point: it's clear to me that the rate of taxation for FICA needs to be increased.-Paul


Another lib (you and the Oracle of Omaha) calling for more taxation. Lasttime I checked, the Feds would welcome a donation by you two, and the rest of you liberals. But neither of you want to help out, you only want to see EVERYBODY pay in so it's always equal suffering. It's part of your philosophy. It's like if a conservative doesn't like to listen to Olberdork, we turn him off. But if a liberal doesn't like to listen to Rush, you want to make a law to remove him from the air.

Concerning your first paragraph, you must not have read the URL you quoted. Let me copy some of it and present it here for your edification.


The IRS data below include all of the 139.96 million tax returns filed in 2008 that had a positive AGI, not just the returns from people who earned enough to owe taxes. These figures exclude those tax returns filing a return merely to receive a stimulus check.
From other IRS data, we can see that in 2008, around 52 million tax returns were filed with either positive or negative AGI that used exemptions, deductions and tax credits to completely wipe out their federal income tax liability. Not only did they get back every dollar that the federal government withheld from their paychecks during 2008, but some even received more back from the IRS. This is a result of refundable tax credits like the earned income tax credit (EITC), the refundable portion of which is not included in the aggregate percentile data here. (For a detailed paper on the distribution of the entire U.S. fiscal system, including all federal, state and local taxes, read "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991 - 2004. (http://www.retrievertraining.net/files/wp1.pdf)")

So, regardless of what you see getting withheld from paychecks, it doesn't mean that person paid ANY Federal income tax. 52,000,000,000 out of around 140 million returns fell into that category, BUT they DID NOT include those filing just to get a stimulus check. Wonder how many of those we might locate???

Here's a novel idea. I would bet a bundle that if you found all those that filed in that manner, they would all be from your party, and voted for Obama.

Now here's another novel idea. Wouldn't it be fun to contact all of them, and present your plan to increase the FICA on their paychecks? Bet they would all be elated to "give back" so the infrastructure would be re-built; or their schools that gave them that incredible education could afford more of those erudite teachers; or we'd have more in the 'kitty' for those unfortunate unemployed, that are going to be 'cut-off' after only 3 years of not working; and the major reason for pumping up the government coffers is so all the unions can pay those exorbitant salaries and pension fees that allow you to retire in the lap of luxury.

What's clear to me, Paul, is you liberals have no clue how this nation is run. Your views that big government, unionization, class envy that espouses the same old mantra of "tax the rich", and attempting to keep this present oligarchy in power, are about to be put on display for what they really are.

"We the People" are eventually taking back this nation, because left to those you are blinded by, Paul, this nation can't last another generation, regardless of how much FICA gets increased, OR how generous your donation to the cause is.

UB

luvmylabs23139
01-28-2011, 05:36 PM
For 2010 A family of 4 with a gross income of 50,000 would have zero federal tax liability and actually get a check from the taxpayers for $38.00
This calculation was done using the standard deduction.

luvmylabs23139
01-28-2011, 05:52 PM
same thing but 4 kids rather than 2. ZERO federal tax liability and a very nice redistribution of wealth check of $3130.00 from the actual federal income taxpayers.

Now lets looks at the DINKS . They would have a federal tax liability of $3058.00
Total redistribution of wealth.

dnf777
01-28-2011, 06:10 PM
same thing but 4 kids rather than 2. ZERO federal tax liability and a very nice redistribution of wealth check of $3130.00 from the actual federal income taxpayers.

Now lets looks at the DINKS . They would have a federal tax liability of $3058.00
Total redistribution of wealth.

Pretty screwed up, I agree. I hope you've written your congressmen urging them to change the tax code.

paul young
01-28-2011, 10:27 PM
i ask again, who do you personally know who pays NO federal income tax? anyone? i know a lot of people in that income range with 2 dependant children, and they're all paying federal income tax. they're not exactly living large, either.-Paul

depittydawg
01-28-2011, 11:08 PM
that's exactly what i was talking about. i actually have 25% witheld weekly. when i file my return, i get about 5-6% back.

who do you personally know who pays nothing?-Paul

I believe Exxon Mobil, IBM and General Electric all had zero federal taxes for the last several years. In fact, most of these global giants have net gains in the billions from the Federal coffers. And all have made significant profits over the same period.

BonMallari
01-28-2011, 11:38 PM
I believe Exxon Mobil, IBM and General Electric all had zero federal taxes for the last several years. In fact, most of these global giants have net gains in the billions from the Federal coffers. And all have made significant profits over the same period.


where do you come up with a ludicrous statement like that. as a former IBM stock holder that is totally false. I am fairly sure the other companies can all show they paid Federal taxes too...the ONLY part of your statement that may be true is that the global giants made billions...Here is IBM's 2008 annual report which was obtained with an elementary Google search

http://www.ibm.com/annualreport/2008/note_p.shtml

Ron in Portland
01-28-2011, 11:42 PM
Tell that to the millions of senior citizens who have subsisted on SS, and lived their retirement years with dignity.

Your simpleton comments are totally heartless, and very snobbish and elitist. Of all the BS corporate donations our tax dollars go to, like Haliburton execs, I'm glad to see some of it going to helping fellow Americans...especially the ones who handed us the greatest nation in history.

Why DON'T you go live in Cuba??

DNF, I can't speak to what Goose intended to say, but I can comment on how I read his remarks.

I think that Social Security, in and of itself, is not a bad thing. Nor do I read Goose's comments to be saying that either. In fact, run correctly it's a very good thing. Exactly what it's name implies, Security.

The problem is that our Government has been running it like a Ponzi scheme. They take in money, spend it, and then pay out dividends with the money they take in later. Isn't that exactly what Bernie Madoff is in prison for?

If all the money paid into Social Security has been saved and used for Social Security, what condition would the program be in now?

sinner
01-29-2011, 08:40 AM
BTW, to the comments about being a beneficiary of gov paid education etc, I paid every dollar of my college education out of my pocket. No gov loans, grants, no parents to pay. It was soley on me. My dad died while I was a child, my mom was a school teacher, no wealth accumulation there.

And my company won every contract based upon competitive bids.;)

Good for you!
Who paid for the first 12+ years the tooth fairy?
Your mother taught school (so did mine) who paid her?
I paid for my education also with no debt and I have 8 years beyond the BS degree.
The competive biding is not what I asked: did you have any govenment contracts and did the toothless fairy pay you?

dnf777
01-29-2011, 08:46 AM
DNF, I can't speak to what Goose intended to say, but I can comment on how I read his remarks.

I think that Social Security, in and of itself, is not a bad thing. Nor do I read Goose's comments to be saying that either. In fact, run correctly it's a very good thing. Exactly what it's name implies, Security.

The problem is that our Government has been running it like a Ponzi scheme. They take in money, spend it, and then pay out dividends with the money they take in later. Isn't that exactly what Bernie Madoff is in prison for?

If all the money paid into Social Security has been saved and used for Social Security, what condition would the program be in now?


Well, then talk to the republicans who opened it up to the general fund and want to privatize it after all these years! If it is a Ponzi scheme (which is a very loose application of that phrase, BTW) it has been a damn successful one! SS has a fund, and a long-term plan to ensure payout reserve. A true Ponzi scheme cares nothing of that.

I understand what you're saying, but don't agree that is what many young conservatives are saying also. JMO

Buzz
01-29-2011, 09:10 AM
where do you come up with a ludicrous statement like that. as a former IBM stock holder that is totally false. I am fairly sure the other companies can all show they paid Federal taxes too...the ONLY part of your statement that may be true is that the global giants made billions...Here is IBM's 2008 annual report which was obtained with an elementary Google search

http://www.ibm.com/annualreport/2008/note_p.shtml


You should pay attention more.

http://abcnews.go.com/Business/Tax/ge-exxon-paid-us-income-taxes-09/story?id=10300167&page=1

You can argue about whether this is good or bad. After all, look at the parts I bolded. What does that do to the argument that the bottom half pays no taxes? The way I see it, if corporations just pass their costs on to consumers, then the bottom 50% is paying part of those taxes too. And since they pretty much spend all of their income instead of saving around 35% of it like I do, if you could figure it out, they are paying a higher percentage than they are shown to pay in the analysis at the link that David provided. It isn't honest to say that corporations just pass their tax cost on to consumers out of one side of your mouth, then argue out of the other side that lower income people pay no taxes.




GE, Exxon Paid No U.S. Income Taxes in '09



As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all.


A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. None of ExxonMobil's income taxes were paid to the U.S. last year.
(Jessica Rinaldi/Reuters)
The most egregious example is General Electric. Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.

Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.

In Pictures: What The 25 Top U.S. Companies Pay In Taxes

How did this happen? It's complicated. GE's tax return is the largest the IRS deals with each year--some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.

Inside you'll find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else--maker of engines, power plants, TV shows and the like--would have paid a 22% tax rate if it was a standalone company.

It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. The timing of big deductions for depreciation in GE Capital's equipment leasing business also provides a tax benefit, as will loan losses left over from the credit crunch.


But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%.

Corporations are getting smarter, not just about doing more business in low-tax countries, but in moving their more valuable assets there as well. That means setting up overseas subsidiaries, then transferring to them ownership of long-lived, often intangible but highly profitable assets, like patents and software.

As a result, figures tax economist Martin Sullivan, companies are keeping some $28 billion a year out of the clutches of the U.S. Treasury by engaging in so-called transfer pricing arrangements, where, say, Microsoft's overseas subsidiaries license software to its U.S. parent company in return for handsome royalties (that get taxed at those lower overseas rates).


"Corporations are paying lower amounts of their profits in taxes now than in the past," says Douglas Shackelford, who teaches tax law at the University of North Carolina at Chapel Hill. "Other countries have been lowering their rates, but not the U.S."

Mind you, not all global megacorps enjoy such low tax rates. Try to muster some pity for Big Oil. ExxonMobil paid more income taxes than any other U.S. company last year, some $15 billion, or 47% of pretax earnings. Exxon's peers Chevron and ConocoPhillips likewise paid out more than half their earnings in income taxes. The oil companies are oddities among the multinationals because many of the oil-rich countries where they do business levy even higher taxes than the U.S.

Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.


Likewise, GE has $84 billion in overseas income parked indefinitely outside the U.S.

Naturally the Obama administration wants to put an end to this. It has proposed doing away with tax deferrals on overseas income. If the plan passes, a U.S. company that pays a 25% tax on profits in China would have to pay an additional 10% income tax to Uncle Sam to bring it up to the 35% corporate rate. "Eliminating deferrals would put U.S. companies on an unlevel playing field," says the Tax Foundation's Hodge, "especially if competing with the likes of Germany, which only taxes companies on domestic operations."

Hewlett-Packard and others among the top 25 state in their annual reports that if Obama's tax measures pass it would mean a certain tax hike, probably amounting to billions of dollars.

Would no more tax holiday for GE really end up helping Mr. and Mrs. Taxpayer? Doubtful. "The average Joe should be in favor of lower corporate taxes," says Hodge, "because ultimately they are paying the corporate income tax. Either as workers, getting lower wages and fewer jobs, or as consumers, paying higher prices, or as retirees, getting lower dividends and earnings on their investments."

In the same vein, JPMorgan Chase Chief Executive Jamie Dimon has spoken out against an Obama proposal to levy a special tax on banks to recoup bailout costs. "Using tax policy to punish people is a bad idea," said Dimon. "All businesses tend to pass costs on to customers."

luvmylabs23139
01-29-2011, 09:39 AM
i ask again, who do you personally know who pays NO federal income tax? anyone? i know a lot of people in that income range with 2 dependant children, and they're all paying federal income tax. they're not exactly living large, either.-Paul


Yes, I do their federal income taxes. By the way people tend to say they pay federal income taxes because they have federal income taxes witheld from their paycheck however they actually end up with zero federal income tax liability.

The numbers I posted are the actual 2010 calculations using the standard deduction.
I didn't even go into a possible mortgage deduction, child care deductions etc.
I used the actual standard deduction numbers.

depittydawg
01-29-2011, 09:56 AM
where do you come up with a ludicrous statement like that. as a former IBM stock holder that is totally false. I am fairly sure the other companies can all show they paid Federal taxes too...the ONLY part of your statement that may be true is that the global giants made billions...Here is IBM's 2008 annual report which was obtained with an elementary Google search

http://www.ibm.com/annualreport/2008/note_p.shtml

http://money.cnn.com/2010/04/16/news/companies/ge_7000_tax_returns/

From Forbes Magazine
http://thinkprogress.org/2010/04/06/exxon-tax/

Found this information in about 3 minutes. Don't have time to continue the research for you. The question was asked, show me somoeone who doesn't owe the IRS, these are two examples.

Granddaddy
01-29-2011, 10:09 AM
Good for you!
Who paid for the first 12+ years the tooth fairy?
Your mother taught school (so did mine) who paid her?
I paid for my education also with no debt and I have 8 years beyond the BS degree.
The competive biding is not what I asked: did you have any govenment contracts and did the toothless fairy pay you?

My Mom & Dad proportionally paid more for my "public" education than lower income folks, i.e., my parents paid for my lower education & some for less financially fortunate over and above my share. Not the government, especially the fed gov, since there was no fed gov aid to local education in those days. You have to understand since the government adds nothing to the GNP, they cannot pay for anything. The only ability of the government, relative to revenue & finance, is to regulate & to redistribute wealth received from productive individuals & corporations. Obviously since I was in the defense electronics business, somewhere close to 50% of our contracts were at some level funded by the federal defense budget, although less than 5% directly government contracts. Over 50% of our contracts were funded by foreign companies. But we paid taxes on all the profits from the contracts whether US or foreign. The effect of which added tax revenue to the US IRS far exceeding just the US contracts. Nonetheless, I don't see how your questions and assertions are germain to a discussion on the rich and taxes. No, if there is a tooth fairy effect, it's to those who don't work, pay taxes or less than their share (meaning get back more than they contribute).

I've given you a 1st-hand summary picture that clearly shows that taxing individuals in the higher income brackets is a deterrent to jobs. That just taking a simpleton approach that all with income over $200K are "rich" and should pay more, notwithstanding this group pays over 58% of all taxes paid already while earning less than 35% of the total income. And in deterring jobs, also reduces the effective federal taxes paid (by reducing employment). Yet you ask questions that have no bearing on the subject.

hotel4dogs
01-29-2011, 10:14 AM
"Atlas Shrugged" by Ayn Rand should be required reading.

luvmylabs23139
01-29-2011, 10:47 AM
2010 1040 Calculation
w-2 income50000
less standard deduction-11400
less pers. Exemption (4*3650)-14600
Taxable income24000
federal tax2763
federal tax is 1675 + (24000-16750)*.15
less child credit (2*1000)-2000
federal tax763
less making work pay credit (800)-800
refund due taxpayer27

You will note that I did this based on zero witheld

Here is the actual calculation for Paul since he won't accept my word.
All of these numbers can be checked using the info from IRS.gov

depittydawg
01-29-2011, 12:15 PM
"Atlas Shrugged" by Ayn Rand should be required reading.

I read it in HS. Before it became a cult. Good novel. Put it alongside "The Jungle" and you have a pretty good look at both sides of capitalism.

sinner
01-29-2011, 12:41 PM
All businesses tend to pass costs on to customers." A very true statement!
I stated earlier:
Flat Tax and I beleive one of the last Republican hopefuls supports this tax approach.
Probably won't happen in my life time.

Marvin S
01-29-2011, 06:21 PM
All businesses tend to pass costs on to customers." A very true statement!
I stated earlier:
Flat Tax and I beleive one of the last Republican hopefuls supports this tax approach.
Probably won't happen in my life time.

www.taxfoundation.org (http://www.taxfoundation.org) , Steve Forbes (Mr. Flat Tax) is a supporter


"Atlas Shrugged" by Ayn Rand should be required reading.

I believe "We The People" & "Fountain Head" to be equally as good & should be read in that order prior to "AS" :).

cotts135
01-30-2011, 06:56 AM
DNF, I can't speak to what Goose intended to say, but I can comment on how I read his remarks.

I think that Social Security, in and of itself, is not a bad thing. Nor do I read Goose's comments to be saying that either. In fact, run correctly it's a very good thing. Exactly what it's name implies, Security.

The problem is that our Government has been running it like a Ponzi scheme. They take in money, spend it, and then pay out dividends with the money they take in later. Isn't that exactly what Bernie Madoff is in prison for?

If all the money paid into Social Security has been saved and used for Social Security, what condition would the program be in now?

Off topic I know but that's a great looking dog in your avatar.

hotel4dogs
01-30-2011, 07:00 AM
Totally agree!


[URL="
I believe "We The People" & "Fountain Head" to be equally as good & should be read in that order prior to "AS" :).

YardleyLabs
01-30-2011, 07:28 AM
Federal taxes, like state and local taxes, come in many flavors. The Federal income tax is a progressives tax meaning, in theory, that those with the highest incomes pay a larger percentage of their incomes in taxes than those with the lowest incomes. Other Federal taxes, such as social security and excise taxes such as those on cigarettes and gasoline, are regressive, meaning that those with the lowest incomes pay the largest percentage of their incomes in taxes. Since the 1980's we have been decreasing income tax while increasing social security. The increases in social security taxes created massive surpluses in current accounts which were used as one of the major sources of revenue to cover the cost in income tax cuts. The crisis in social security is less a factor of the long term funding for social security, which is marginally inadequate, and more a function of the fact that the surpluses generated by social security are now running out and the fund is reaching the point, as expected, when it will need to take back the money that was borrowed to cover deficits.

It is true that almost half of the population does not pay Federal income taxes. However, that does not mean they do not pay taxes. In fact they pay a substantial portion of their incomes for those other taxes. The overall tax burden -- that is, the percentage of total personal income spent on taxes of any kind -- for lower income people is actually quite substantial. The greatest tax burden is on those in the middle class, while the very wealthiest face tax burdens (once again, measured by percentages of total income) that rival those paid by the poorest because such a large percentage of their incomes comes from income, such as interest and dividends, that are taxed at preferential rates, and the majority of their incomes may be exempt from such regressive taxes as social security.

Obviously, however, the total dollars paid in taxes by the wealthiest are much higher than the total paid by the poorest. As the wealthiest in America have received a higher and higher percentage of total income, and the "poorest" 50% have seen their "share" of total income cut almost in half, the total taxes paid by the wealthiest have gone up. Is that fair? The reality is that the only "fair" system of taxes is to have no taxes at all. To see the obvious benefits of such an ultimate expression of the free market in action, one need look no further than at such paradises as Somalia.

The free market, operating on its own, will not create a country with the infrastructure, stability, and work force needed to build and sustain wealth. It is that simple. Everyone benefits from those services, but the primary benefits follow the money since the primary activities of government are dedicated to maintaining the economic infrastructure and protection of property. The simple, reductio ad absurdum argument to support this is to envision who would lose most from the elimination of all that government supports, the millionaire or the unemployed thug on the street.

Arguments of tax equity always need to consider all taxes, not just selective ones. That includes sales taxes, property taxes, per capita taxes, excise taxes, "benefit" taxes (social security, Medicare, unemployment), etc. Arguments also need to address the actual amount of money needed to meet "public" needs for schools, roads, property protection, defense, etc., etc. Obviously, there is no "right" answer for this amount, but there is a lot of evidence suggesting that the amount required to maintain a viable modern economy is pretty substantial.

Julie R.
01-30-2011, 09:45 AM
While that was quite a thoughtful post Jeff, it's a little off topic. The original post was about how more taxes on the wealthiest hurts JOB CREATION. When was the last time a anyone got a job from a poor man, government leech or welfare queen? And playing your violin for the overtaxed poor isn't exactly music to the ears of those who try to make the right choices for their families:


It is true that almost half of the population does not pay Federal income taxes. However, that does not mean they do not pay taxes. In fact they pay a substantial portion of their incomes for those other taxes. The overall tax burden -- that is, the percentage of total personal income spent on taxes of any kind -- for lower income people is actually quite substantial.


http://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/awHowSad.gif
Let's have a pity party for the overtaxed downtrodden
http://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/0cfa79a9.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/f23c5d70.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/ee3f45e8.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/7f867b64.gif

If lower income people pay "too much" in taxes, it is because proportionally more of them make bad choices: smoke, drink, eat fast food and squander gasoline. Everyone has the choice to drive or not or use more fuel efficent cars (even, gasp, older ones) instead of late model SUVs, or use public transportation, and cigarettes, booze, KFC & Happy Meals aren't exactly part of the five major food groups. In short, if the poor were really trying to stretch dollars by cutting out all non-essential items, fixing meals at home, etc. they'd pay much less in taxes. Probably wouldn't be hatching out babies on the government nickel every 9 months, but I digress.

And, nice try comparing tax reduction to tax elimination and therefore, a Somalia-like state overrun with lawless thugs. No one, even the most hard core righty, is suggesting we get rid of all taxes because they're inherently "unfair." But we definitely need to cut spending, entitlements and find ways to eliminate waste and fraud, and there are a lot of ways to do that and still have a functioning economy. The exponential growth of the welfare class has abundantly proven that handouts and entitlements do nothing to promote family stabilty and improvement of one's lot in life.

hotel4dogs
01-30-2011, 10:00 AM
I saw a bumper sticker that said,

"If You Can't Feed 'em, DON'T Breed 'em "

love it!


[SIZE=3][COLOR=navy]. Probably wouldn't be hatching out babies on the government nickel every 9 months, but I digress

road kill
01-30-2011, 10:03 AM
While that was quite a thoughtful post Jeff, it's a little off topic. The original post was about how more taxes on the wealthiest hurts JOB CREATION. When was the last time a anyone got a job from a poor man, government leech or welfare queen? And playing your violin for the overtaxed poor isn't exactly music to the ears of those who try to make the right choices for their families:




http://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/awHowSad.gif
Let's have a pity party for the overtaxed downtrodden
http://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/0cfa79a9.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/f23c5d70.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/ee3f45e8.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/7f867b64.gif

If lower income people pay "too much" in taxes, it is because proportionally more of them make bad choices: smoke, drink, eat fast food and squander gasoline. Everyone has the choice to drive or not or use more fuel efficent cars (even, gasp, older ones) instead of late model SUVs, or use public transportation, and cigarettes, booze, KFC & Happy Meals aren't exactly part of the five major food groups. In short, if the poor were really trying to stretch dollars by cutting out all non-essential items, fixing meals at home, etc. they'd pay much less in taxes. Probably wouldn't be hatching out babies on the government nickel every 9 months, but I digress.

And, nice try comparing tax reduction to tax elimination and therefore, a Somalia-like state overrun with lawless thugs. No one, even the most hard core righty, is suggesting we get rid of all taxes because they're inherently "unfair." But we definitely need to cut spending, entitlements and find ways to eliminate waste and fraud, and there are a lot of ways to do that and still have a functioning economy. The exponential growth of the welfare class has abundantly proven that handouts and entitlements do nothing to promote family stabilty and improvement of one's lot in life.

HERE HERE!!!


RK

luvmylabs23139
01-30-2011, 10:55 AM
I saw a bumper sticker that said,

"If You Can't Feed 'em, DON'T Breed 'em "

love it!

Where can I get that bumper sticker?
I really want one!:p

YardleyLabs
01-30-2011, 11:04 AM
While that was quite a thoughtful post Jeff, it's a little off topic. The original post was about how more taxes on the wealthiest hurts JOB CREATION. When was the last time a anyone got a job from a poor man, government leech or welfare queen? And playing your violin for the overtaxed poor isn't exactly music to the ears of those who try to make the right choices for their families:




http://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/awHowSad.gif
Let's have a pity party for the overtaxed downtrodden
http://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/0cfa79a9.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/f23c5d70.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/ee3f45e8.gifhttp://i490.photobucket.com/albums/rr266/MouseOnAFeedsack/Smilies/7f867b64.gif

If lower income people pay "too much" in taxes, it is because proportionally more of them make bad choices: smoke, drink, eat fast food and squander gasoline. Everyone has the choice to drive or not or use more fuel efficent cars (even, gasp, older ones) instead of late model SUVs, or use public transportation, and cigarettes, booze, KFC & Happy Meals aren't exactly part of the five major food groups. In short, if the poor were really trying to stretch dollars by cutting out all non-essential items, fixing meals at home, etc. they'd pay much less in taxes. Probably wouldn't be hatching out babies on the government nickel every 9 months, but I digress.

And, nice try comparing tax reduction to tax elimination and therefore, a Somalia-like state overrun with lawless thugs. No one, even the most hard core righty, is suggesting we get rid of all taxes because they're inherently "unfair." But we definitely need to cut spending, entitlements and find ways to eliminate waste and fraud, and there are a lot of ways to do that and still have a functioning economy. The exponential growth of the welfare class has abundantly proven that handouts and entitlements do nothing to promote family stabilty and improvement of one's lot in life.
The job creation aspects of so-called trickle down economics are a nice theory, but remain just that. The spending and investment decisions of the wealthy are made to serve the interests of the wealthy. And with countless efforts to justify tax cuts for the wealthy based on the benefits that would accrue to everyone else in the economy, the impact has been stark. The percentage of gross income going to the wealthiest 1-2% of the population has more than doubled, while the percentage going to the lower 50% has declined 40%. Trickle down has actually proven to be a reconcentration of wealth into the hands of fewer and fewer people.

As to the appropriatenmess of the absolute magnitude of public expenditures, I suspect that we have already cut too far in non-defense spending to maintain a position of economic leadership. We have stripped our educational systems, under-invested in infrastructure, and allowed free market philosophies to degenerate into support for corporate monopolies and oligarchies that stifle competition, rather than enhancing it. If we are looking for ways to modify our tax structures to enhance competitiveness and job creation, we should:

eliminate preferential treatment of certain types of income such as dividends, capital gains, inheritances, and non-cash employee benefits.
eliminate corporate taxes
get employers out of the business of subsidizing health benefits
either fund social security, medicare, and unemployment from general taxes or eliminate income caps for existing taxes, while eliminating employer contributions to these programs -- employers should not be taxed for providing jobs.

depittydawg
01-30-2011, 11:32 AM
While that was quite a thoughtful post Jeff, it's a little off topic. The original post was about how more taxes on the wealthiest hurts JOB CREATION. When was the last time a anyone got a job from a poor man, government leech or welfare queen? And playing your violin for the overtaxed poor isn't exactly music to the ears of those who try to make the right choices for their families:


[[/COLOR][/SIZE]

"Rich men create jobs". While this has become a mantra of the trickle down theorists, there is absolutely no historical evidence to support it. It started as a theory and has never been proven in practice in the United States over the last 30 years. What creates jobs is demand for products or services. Period.
The most recent proof of this is the last 3 years. The government has created all kinds of tax breaks and incentives for capitalists (those who control capital) to start or increase business activity. Net result- little to nothing in job creation. In a capitalist system jobs are just another reflection of supply and demand. If strong demand exists for a product, someone will figure out how to acquire the capital necessary to produce that product. Without demand there will be NO investment.
Economic theory asside, the elephant in the room squashing US jobs is Globalization. We have to figure out how to participate in globalization while still creating and protecting job growth in the US.

hotel4dogs
01-30-2011, 11:34 AM
yeah, me too...unfortunately, it was in another country that I saw it. That in itself says something.


Where can I get that bumper sticker?
I really want one!:p

Granddaddy
01-30-2011, 01:12 PM
The job creation aspects of so-called trickle down economics are a nice theory, but remain just that....

No theory. It's reality. Further, the government (at any level) adds nothing to the GNP. So what remains - what business (in all forms) produces. As Julie said, when was the last time a poor person hired someone? History has clearly shown that when small businesses pay more taxes, jobs are eliminated. I also provided you a real life case as it played out, that showed clearly that the potential for a number of good paying jobs could not be fulfilled in favor of paying income taxes. Your macro-approach/justification has way more variables than just whether ALL lower income persons benefit or not. No one (with any sense) who espouses the benefits of lower taxes believes there is a direct correlation to lower taxes for the wealthy (those making over $200K, according to the current Admin approach) to improving the plight of the ALL of the poor. However, I can say without equivocation that had I paid less income taxes, my company would have hired more workers as a direct correlation. Notice the qualifications I have made/am making, 1) small business is the engine of job growth since small businesses employ over 50% of all Americans, 2) small businesses (less than 100 shareholders, less than 250 employees & less than $500M in revenue), not large corporations, 3) small businesses that are growing, and most importantly, 4) small businesses are sole proprietors, partnerships, LLCs & s-corps where the owners pay income taxes even on income they don't personally receive - mistakenly making them part of the "wealthy" class. In virtually every growing small business, lower taxes would not only result in higher employement, it would multiple the effect of putting revenue from income taxes in the fed's coffers beyond just collecting the increased tax from taxing the shareholder/owners.

YardleyLabs
01-30-2011, 01:53 PM
No theory. It's reality. Further, the government (at any level) adds nothing to the GNP. So what remains - what business (in all forms) produces. As Julie said, when was the last time a poor person hired someone? History has clearly shown that when small businesses pay more taxes, jobs are eliminated. I also provided you a real life case as it played out, that showed clearly that the potential for a number of good paying jobs could not be fulfilled in favor of paying income taxes. Your macro-approach/justification has way more variables than just whether ALL lower income persons benefit or not. No one (with any sense) who espouses the benefits of lower taxes believes there is a direct correlation to lower taxes for the wealthy (those making over $200K, according to the current Admin approach) to improving the plight of the ALL of the poor. However, I can say without equivocation that had I paid less income taxes, my company would have hired more workers as a direct correlation. Notice the qualifications I have made/am making, 1) small business is the engine of job growth since small businesses employ over 50% of all Americans, 2) small businesses (less than 100 shareholders, less than 250 employees & less than $500M in revenue), not large corporations, 3) small businesses that are growing, and most importantly, 4) small businesses are sole proprietors, partnerships, LLCs & s-corps where the owners pay income taxes even on income they don't personally receive - mistakenly making them part of the "wealthy" class. In virtually every growing small business, lower taxes would not only result in higher employement, it would multiple the effect of putting revenue from income taxes in the fed's coffers beyond just collecting the increased tax from taxing the shareholder/owners.
"No theory. " - I'd love to see your proof

"the government (at any level) adds nothing to the GNP" - That would certainly be a surprise to economists since government spending is a major part of GDP, reflected both in spending by consumers employed by the government , spending by people who work for companies producing their goods under government contract )e.g., the entire defense industry), and the majority of the health care industry which is financed through government funding, among many others.

"As Julie said, when was the last time a poor person hired someone?" - Like the rest of us, poor people "hire" by creating demand for goods through their purchases. Very few people are hired directly by individuals regardless of wealth. They are hired by companies.

"History has clearly shown that when small businesses pay more taxes, jobs are eliminated." - If you read my initial post, you will see that one of my recommendations was that all business taxes be eliminated. Business taxes make no economic sense and only serve to make our goods and our workers less competitive in a global market.

BTW, I've been a business owner since 1984, of both large companies and small, and am well familiar with the economics involved.

Granddaddy
01-30-2011, 02:15 PM
....As to the appropriatenmess of the absolute magnitude of public expenditures, I suspect that we have already cut too far in non-defense spending to maintain a position of economic leadership. We have stripped our educational systems, under-invested in infrastructure, and allowed free market philosophies to degenerate into support for corporate monopolies and oligarchies that stifle competition, rather than enhancing it. If we are looking for ways to modify our tax structures to enhance competitiveness and job creation, we should:

eliminate preferential treatment of certain types of income such as dividends, capital gains, inheritances, and non-cash employee benefits.
eliminate corporate taxes
get employers out of the business of subsidizing health benefits
either fund social security, medicare, and unemployment from general taxes or eliminate income caps for existing taxes, while eliminating employer contributions to these programs -- employers should not be taxed for providing jobs.

To talk intelligently about "cuts" you must first distinguish spending on entitlements from discretionary spending/cuts. This entitlement category makes up over 62% of our national budget. Defense is the largest discretionary portion of the remaining "discretionary" budget (near 38% currently of the total budget). When Obamacare takes full effect over the next 10 yrs, entitlements are projected to rise to 78% of the total budget, leaving 22% of the total budget for defense & everything else. Remember too, that the federal government has two constitutional mandates, 1) to provide for a common defense & 2) to regulate interstate commerce. The current "entitlements" are not mandated by our constitution. So 10 yrs from now, you could advocate eliminating the entire discretionary portions of the budget and still run deficits annually.

Also above, you included capital gains & inheritance as categories of income while neither is income.

Then while implying the wealthiest 1-2% don't pay enough tax, you then say eliminate corporate taxes. Since the wealthiest persons own & direct the wealthiest multi-national corporations this would provide them a means of no income tax consequences at any level in the US???

I'm assuming instead of companies paying for employee health insurance, you'd have everyone on the government health rationing system that will surely result.

Since the vast majority of our politicians are more concerned about being re-elected that actually passing needed legislation, we have no one in Washington willing to cut anything where they have created an "entitlement" - welfare, medicare/medicaid, unemployment compensation & debt service. I'd advocate returning ss to its original purpose to provide a safety net of essentials for the poor who cannot provide themselves shelter & food in their old age. I'd eliminate welfare as it currently exists, making some productive form of work mandatory in order to receive benefits (meaning no direct welfare for able bodied persons unless they work). I'd limit unemployment compensations to 90 days, no exceptions, no extensions (we'd find this would eliminate our illegal alien problem because there would be no jobs for them). I'd take the savings from these entitlement cuts and pay down/eliminate the national debt. Once eliminated, the saving from national debt service would allow an orderly increase in ss & medicare limited to funds received to fund it.

As for education, you are also mistaken. The current government contribution to education (fed & st) is higher per student than ever before in actual dollars, rising much higher annually than the rate of inflation over the last 40 yrs.

Remember reality is that small businesses provide the majority of jobs in the US, not large corporations that you seem to want to benenfit with no corporate taxes.

And for the comment someone made 'that rich men don't create jobs, demand for goods & services creates jobs". Sounds good, but it's incomplete. Demand for goods and services come from people being gainfully employed. Therefore, jobs create demand for goods and services. The question is who creates these jobs, it's small businesses in the US (small business employs over 70% of all employed in the US). It's time our government understands this & provides small businesses with lower taxes (meaning lower income taxes on small business owners who are currently labeled as the rich - making over $200K per yr). Instead our government bales out large inefficient businesses, provides these large inefficient businesses with tax breaks all the while advocating higher taxes on the small business owner through raising his income tax rate.

Granddaddy
01-30-2011, 02:29 PM
"No theory. " - I'd love to see your proof

"the government (at any level) adds nothing to the GNP" - That would certainly be a surprise to economists since government spending is a major part of GDP, reflected both in spending by consumers employed by the government , spending by people who work for companies producing their goods under government contract )e.g., the entire defense industry), and the majority of the health care industry which is financed through government funding, among many others.


My proof is as real as my company that I related in the intial post starting this thread, above. We couldn't hire as many & fast as we'd have liked because of the high personal tax rate. This is basic to any small, growing business - they are limited in creating jobs by the taxes they pay.

Where does the government get its funds? The answer is elementary, by collecting taxes from those who actually produce goods and sevices. Therefore the net effect of the government jobs, services, etc is a subtraction (not a multiplier) from those who actually produce goods and services -the same that pay the taxes the government collects...Econ 101. The government portion notation of the GNP is only to provide identification of the various sectors of the economy involved, not who creates GNP.

Uncle Bill
01-30-2011, 02:44 PM
To talk intelligently about "cuts" you must first distinguish spending on entitlements from discretionary spending/cuts. This entitlement category makes up over 62% of our national budget. Defense is the largest discretionary portion of the remaining "discretionary" budget (near 38% currently of the total budget). When Obamacare takes full effect over the next 10 yrs, entitlements are projected to rise to 78% of the total budget, leaving 22% of the total budget for defense & everything else. Remember too, that the federal government has two constitutional mandates, 1) to provide for a common defense & 2) to regulate interstate commerce. The current "entitlements" are not mandated by our constitution. So 10 yrs from now, you could advocate eliminating the entire discretionary portions of the budget and still run deficits annually.

Also above, you included capital gains & inheritance as categories of income while neither is income.

Then while implying the wealthiest 1-2% don't pay enough tax, you then say eliminate corporate taxes. Since the wealthiest persons own & direct the wealthiest multi-national corporations this would provide them a means of no income tax consequences at any level in the US???

I'm assuming instead of companies paying for employee health insurance, you'd have everyone on the government health rationing system that will surely result.

Since the vast majority of our politicians are more concerned about being re-elected that actually passing needed legislation, we have no one in Washington willing to cut anything where they have created an "entitlement" - welfare, medicare/medicaid, unemployment compensation & debt service. I'd advocate returning ss to its original purpose to provide a safety net of essentials for the poor who cannot provide themselves shelter & food in their old age. I'd eliminate welfare as it currently exists, making some productive form of work mandatory in order to receive benefits (meaning no direct welfare for able bodied persons unless they work). I'd limit unemployment compensations to 90 days, no exceptions, no extensions (we'd find this would eliminate our illegal alien problem because there would be no jobs for them). I'd take the savings from these entitlement cuts and pay down/eliminate the national debt. Once eliminated, the saving from national debt service would allow an orderly increase in ss & medicare limited to funds received to fund it.

As for education, you are also mistaken. The current government contribution to education (fed & st) is higher per student than ever before in actual dollars, rising much higher annually than the rate of inflation over the last 40 yrs.

Remember reality is that small businesses provide the majority of jobs in the US, not large corporations that you seem to want to benenfit with no corporate taxes.

And for the comment someone made 'that rich men don't create jobs, demand for goods & services creates jobs". Sounds good, but it's incomplete. Demand for goods and services come from people being gainfully employed. Therefore, jobs create demand for goods and services. The question is who creates these jobs, it's small businesses in the US (small business employs over 70% of all employed in the US). It's time our government understands this & provides small businesses with lower taxes (meaning lower income taxes on small business owners who are currently labeled as the rich - making over $200K per yr). Instead our government bales out large inefficient businesses, provides these large inefficient businesses with tax breaks all the while advocating higher taxes on the small business owner through raising his income tax rate.


Great post, Dave. Too many facts however. Hard to convince ANY libs with that much common sense.

I'd also eliminate the welfare baby bonus...and all the anchor babies, regardless of their current age. They were either born by bona fide registered citizens of the USA, or they are undocumented immigrants.

As to my first comment...it was prompted by this:




Bread Winner of the Family...Making Babies!



I was speaking to an emergency room physician this morning. He told me that a woman in her 20s came to the ER with her 8th pregnancy. She stated, "my momma told me that I am the breadwinner for the family." He asked her to explain. She said that she can make babies and babies get money for the family. The scam goes like this: The grandma calls the Department of Child and Family Services and states that the unemployed daughter is not capable of caring for these children. DCFS agrees and states that the child or children will need to go to foster care.








The grandma then volunteers to be the foster parent, and thus receives a check for $1500 per child per month in Illinois . Total yearly income: $144,000 tax-free, not to mention free healthcare (Medicaid) plus a monthly card entitling her to free groceries, etc, and a voucher for 250 free cell phone minutes per month. This does not even include WIC and other welfare programs. Indeed, grandma was correct in that her fertile daughter is the "breadwinner" of the family.








This is how the ruling class spends our tax dollars.








Sebastian J. Ciancio, M.D. Urologist,








Danville Polyclinic, LTD











And liberals wonder why the TEA party got started???

UB

Granddaddy
01-30-2011, 02:44 PM
...."History has clearly shown that when small businesses pay more taxes, jobs are eliminated." - If you read my initial post, you will see that one of my recommendations was that all business taxes be eliminated. Business taxes make no economic sense and only serve to make our goods and our workers less competitive in a global market.

BTW, I've been a business owner since 1984, of both large companies and small, and am well familiar with the economics involved.

Obviously, you don't understand how the majority of US businesses' income is taxed. The majority of US businesses pay no direct corporate income taxes already. Not because these businesses avoid them (like large multi-national corporations), rather because the tax structure for small businesses has all income flowing to the owners & is not taxed at the comapny level. And as good as that sounds, the business income of sole proprietors, partnerships, LLC & s-corps flows (via K-1)directly rather to the owners who are taxed as part of the rich class (as you refer to them) even though these small business owners don't actually receive that income. Owners of small businesses fund their growth through business profits which are plowed back into the business. Except the government makes no distinction between owners of small business from individuals who actually have take home income over $200K. Taxing them all at the rate of 39% of total income.

Surely if you had read the initial post, you'd understand the circumstances unique to small business. :rolleyes:

luvmylabs23139
01-30-2011, 02:46 PM
yeah, me too...unfortunately, it was in another country that I saw it. That in itself says something.

Bummer! It could be taken 2 ways. One would not even be highly political.
Might have been one I wouldn't get crap for with the liberals at the OB club.:rolleyes:

YardleyLabs
01-30-2011, 02:57 PM
T
the federal government has two constitutional mandates, 1) to provide for a common defense & 2) to regulate interstate commerce.
The purpose of the Constitution, and therefore the Federal government, is sated succintly in the preamble as follows: "...in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.." These are repeated throughout the Constitution, where promoting the general welfare is normally on equal footing with defense and ahead of regulating commerce.


Also above, you included capital gains & inheritance as categories of income while neither is income.
If there is no income, there are no taxes. If you are gaining money that you didn't have before, it is income. I'm not sure where your definitions are coming from, but it is not economics or the dictionary. If you buy something for $100 and sell it for $100, there is a revenue, but no income. If I give you something and you sell it for $100, there is income of $100.


Then while implying the wealthiest 1-2% don't pay enough tax, you then say eliminate corporate taxes. Since the wealthiest persons own & direct the wealthiest multi-national corporations this would provide them a means of no income tax consequences at any level in the US???
Many people benefit from corporate profits when they are distributed in the form of dividends and capital gains to shareholders (who may or may not be wealthy). Investment is fed from undistributed profits. Eliminating corporate taxes will stimulate increased dividends, higher stock prices, and greater investment. More importantly, however, it will eliinate a major incentive causing corporations to move businesses to other countries to obtain more favorable tax treatment.


I'm assuming instead of companies paying for employee health insurance, you'd have everyone on the government health rationing system that will surely result.
Almost no individuals pay for their health insurance now. Access to care is rationed by insurance companies, employers, and governments. However, the greatest rationing of all is in denial of non-critical services to the 34 million people without insurance. I am not crazy about any of these approaches. However, from a purely business perspective, having care primarily financed by employers as it is now has very negative consequences as our businesses try to compete globally since no other advanced country in the world imposes this cost on business. I believe that employer payment of health insurance costs is one of the biggest job killers in our economy. Paying those same costs through general taxes would not have as negative an effect.


Demand for goods and services come from people being gainfully employed. Therefore, jobs create demand for goods and services. The question is who creates these jobs, it's small businesses in the US (small business employs over 70% of all employed in the US). It's time our government understands this & provides small businesses with lower taxes (meaning lower income taxes on small business owners who are currently labeled as the rich - making over $200K per yr). Instead our government bales out large inefficient businesses, provides these large inefficient businesses with tax breaks all the while advocating higher taxes on the small business owner through raising his income tax rate.
I agree with the first part of your statement -- demand for goods depends on people being gainfully employed. One of the cause of the economic stagnation in the US is that the income of the majority of Americans hes not been growing at a rate consistent with the economy as a whole leaving less income to fuel consumption. This has contributed to a migration of capital and jobs to other countries where consumption income is growing faster.

The elimination of corporate taxes does not benefit large businesses at the expense of small businesses. Instead, it places all businesses on an equal footing with respect to taxes. Schedule C corporations use sub-s and LLC structures to avoid paying corporate taxes on top of personal income taxes. However, this also eliminates their ability to shield retained earnings from taxation and thereby reduces the funds they have available for reinvestment. By eliminating corporate taxes, more of the companies will elect structures that make it easier to accumulate investment savings.

Granddaddy
01-30-2011, 04:22 PM
The preamble to the US Constitution is not unlike the preamble to any contract, it has no legal power. Rather it is the actual articles of the document that have legal standing, where it is commonly recognized that wording is provided for the common defense, regulating interstate commerce & provide a legal justice system to facilitate those intents. The establishment of same is understood to "insure domestic tranquility", "promote the general welfare", "secure the blessing of liberty", etc, not provide a mandate for government social programs & intrusion into the lives of its citizens as is practice today.

As for income, even the IRS (based upon congressional laws) doesn't consider capital gains & inheritance as ordinary income (as you infer) and capital gains are taxed at a different rate (either 15% or 5% based upon ordinary income level), inheritance are not even reportable as part of the 1040 return. It has long been thought that keeping capital gains taxes low provided an incentive for capital investment, to fund development & compensate for inflation & corporate taxes - so capital gains are clearly not considered the same as ordinary income. In the case of the inheritance tax, it is so far from any inclusion as income that it is not filed as part of a 1040 income tax return, rather on a form 706. Further there was no inheritance taxes in 2010, there is now a progressive tax up to 35% of the inheritiance based upon the estate value. So no, there is no legal inclusion of an inheritance as a form of income (all income being reported on the form 1040).

But, as is typical, arguments digress from the topic. The topic being that the vast majority of small businesses are organized as sole proprietorships, partnerships, LLCs or s-corps. These businesses have/represent the following:

Represent 99.7 percent of all employer firms.
Employ just over half of all private sector employees.
Have generated 64 percent of net new jobs over the past 15 years.
Create more than half of the nonfarm private gross domestic product (GDP).
Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
Are 52 percent home-based and 2 percent franchises.
Made up 97.3 percent of all identified exporters and produced 30.2 percent of the known export value in FY 2007.
Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.Yet these small business owers have NO means under current IRS rules of protecting retained earning from taxation because ALL income flows for reporting purposes to the stockholder/owners and these stockholder owners are taxed as if they received the income (being included as someone with income over $200K or the top 1-2%).

So please, either respond to this thread topic or go elsewhere to debate your other diversions and promotion of large business that shouldn't have its income taxed. But why not campaign against the bailout of large businesses too, since the government also seems to be in the business of propping-up & protecting inefficiency.

YardleyLabs
01-30-2011, 05:08 PM
The preamble to the US Constitution is not unlike the preamble to any contract, it has no legal power. Rather it is the actual articles of the document that have legal standing, where it is commonly recognized that wording is provided for the common defense, regulating interstate commerce & provide a legal justice system to facilitate those intents. The establishment of same is understood to "insure domestic tranquility", "promote the general welfare", "secure the blessing of liberty", etc, not provide a mandate for government social programs & intrusion into the lives of its citizens as is practice today.
Actually, section 8, defining the powers of Congress, states:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States".
I'd say it is pretty clear that providing for the general welfare was a core responsibility of the government from day 1.


As for income, even the IRS (based upon congressional laws) doesn't consider capital gains & inheritance as ordinary income (as you infer) and capital gains are taxed at a different rate (either 15% or 5% based upon ordinary income level), inheritance are not even reportable as part of the 1040 return. It has long been thought that keeping capital gains taxes low provided an incentive for capital investment, to fund development & compensate for inflation & corporate taxes - so capital gains are clearly not considered the same as ordinary income. In the case of the inheritance tax, it is so far from any inclusion as income that it is not filed as part of a 1040 income tax return, rather on a form 706. Further there was no inheritance taxes in 2010, there is now a progressive tax up to 35% of the inheritiance based upon the estate value. So no, there is no legal inclusion of an inheritance as a form of income (all income being reported on the form 1040).
Thus, my point, that our tax laws give preferential treatment of some types of income by allowing it to be taxed at a lower rate than other types of income. That does not mean that those items are not income, as you stated, but that they may or may not be part of taxable income. The distinction made by the tax laws, however, is between "salaries and wages", "interest", "dividends", etc. All are part of income, even though they may be treated differently.


But, as is typical, arguments digress from the topic. The topic being that the vast majority of small businesses are organized as sole proprietorships, partnerships, LLCs or s-corps. These businesses have/represent the following:
Represent 99.7 percent of all employer firms.
Employ just over half of all private sector employees.
Have generated 64 percent of net new jobs over the past 15 years.
Create more than half of the nonfarm private gross domestic product (GDP).
Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
Are 52 percent home-based and 2 percent franchises.
Made up 97.3 percent of all identified exporters and produced 30.2 percent of the known export value in FY 2007.
Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.Yet these small business owers have NO means under current IRS rules of protecting retained earning from taxation because ALL income flows for reporting purposes to the stockholder/owners and these stockholder owners are taxed as if they received the income (being included as someone with income over $200K or the top 1-2%).
That is exactly the point I made in my last post. If you eliminate corporation taxes, as I recommended, there is no tax reason for small business owners to elect a business structure that treats all business revenue and expenses as items of personal income. By restructuring as normal corporations, which would require maintaining business and personal assets separately, they would be able to retain earnings within the company for future investment. Those funds would only become taxable as income when withdrawn from the company as income.


So please, either respond to this thread topic or go elsewhere to debate your other diversions and promotion of large business that shouldn't have its income taxed. But why not campaign against the bailout of large businesses too, since the government also seems to be in the business of propping-up & protecting inefficiency.And here I thought my responses were directly responding to your original post and all that followed. ;) By the way, in your original post you noted that you were taxed each year based on total company distributions of $8-10 million among all partners even though your salary was only $150k. You go on to say that when the company was sold that you paid 45% capital gains (or income) tax on the profit, inferring that you were being double taxed. In fact, you would not have been double taxed. Any profits earned on which you were taxed at the time would have added to your investment base in the company to the extent that they were not paid out to you as an individual. Capital gains (or income) taxes would only have been payable on any excess of the sale price over your investment basis. Thus, you were only paying tax on the incremental portion of the sale price that represented new, and previously untaxed income. Been there and done that.

sinner
01-30-2011, 05:27 PM
When a poor man gives something, that is a sacrifice indeed. When a rich man gives something, it hardly rises to the same level.
Quote from David Baldacci.

sinner
01-30-2011, 05:40 PM
Quote "Almost no individuals pay for their health insurance now. Access to care is rationed by insurance companies, employers, and governments. However, the greatest rationing of all is in denial of non-critical services to the 34 million people without insurance. I am not crazy about any of these approaches. However, from a purely business perspective, having care primarily financed by employers as it is now has very negative consequences as our businesses try to compete globally since no other advanced country in the world imposes this cost on business. I believe that employer payment of health insurance costs is one of the biggest job killers in our economy. Paying those same costs through general taxes would not have as negative an effect."

My 13 years of management for Coors Brewery and 10 years of cost benefit date analyzed by the HR department of the university of Orgeon toataly supports your statement. Coors health insurance was self funded, self adminstered and self managed. The cost benefit of their Wellness process were: An employee with no health risks who used the wellness programs for every $1 spent by Coors the company got a return of $2.26; for every employee with health risks the retun was $8.08. The four factors measured were Health care cost, Productivity, absenteesim and turn over.
Health care was the smallest cost benefit at that time. 1989 dollars.

Granddaddy
01-30-2011, 05:58 PM
Actually, section 8, defining the powers of Congress, states:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States".
I'd say it is pretty clear that providing for the general welfare was a core responsibility of the government from day 1.


Thus, my point, that our tax laws give preferential treatment of some types of income by allowing it to be taxed at a lower rate than other types of income. That does not mean that those items are not income, as you stated, but that they may or may not be part of taxable income. The distinction made by the tax laws, however, is between "salaries and wages", "interest", "dividends", etc. All are part of income, even though they may be treated differently.


That is exactly the point I made in my last post. If you eliminate corporation taxes, as I recommended, there is no tax reason for small business owners to elect a business structure that treats all business revenue and expenses as items of personal income. By restructuring as normal corporations, which would require maintaining business and personal assets separately, they would be able to retain earnings within the company for future investment. Those funds would only become taxable as income when withdrawn from the company as income.

And here I thought my responses were directly responding to your original post and all that followed. ;) By the way, in your original post you noted that you were taxed each year based on total company distributions of $8-10 million among all partners even though your salary was only $150k. You go on to say that when the company was sold that you paid 45% capital gains (or income) tax on the profit, inferring that you were being double taxed. In fact, you would not have been double taxed. Any profits earned on which you were taxed at the time would have added to your investment base in the company to the extent that they were not paid out to you as an individual. Capital gains (or income) taxes would only have been payable on any excess of the sale price over your investment basis. Thus, you were only paying tax on the incremental portion of the sale price that represented new, and previously untaxed income. Been there and done that.

Wrong again in several respects. First, most small business already keep business records and reporting separate from personal data with their business interests reported on a K-1 form. 2nd, the vast majority of small businesses would have a significant IRS reporting burden to report as a c-corp that they couldn't afford. Next, why should small businesses that don't have the qualifications to or are financially unable to take advantage of current government incentives to large businesses under the current stimulus legislation (i.e., welfare to large business) be required to compete as if they are large corporations? Further small businesses have been virtually shutout from bank loans in the current business environment to finance growth, while large corps have been provided direct government assistence or guaranted loans.

In reference to double taxation, I didn't infer it. Instead I stated we paid an effective rate of 39% of our income in the form of taxes whether it was invested in the company or not. Small business invested funds do not receive a dollar for dollar exclusion/protection from taxes . Assets are depreciated (used up) based upon an IRS schedule, therefore the basis increase is not equal to what is invested. There are both year to year income taxes and capital gains taxes levied against what has previous been taxed as income but has been retained to purchase assets that remain at the time of sale. Since income taxes have been paid upon the income invested, then captial gains taxes collected on the value of what remains (which was previous taxed), you may call it what you like but its effect is an oppressive level of taxation. And under current IRS rules, electing c-corp status is no less oppressive for most small businesses(actually more oppressive by approx 5% in most states), just a different formula, different elections which can't be changed without penalty etc.

But you seem intent on looking at the trees rather than seeing the forest. Point being, small businesses, who employ most of the US, are today, were yesterday & will be for the forseeable future, adversely affected by their owner/stockholders being included in the top 1-2% (i.e., income over 200K) of incomes even though their reported income is primarily reinvested in the company. Such adverse effect is a direct deterrent to hiring employees in a growing small business.

The bolded portion is the thesis statement, my company's actual experience the proof. All to say, if our government really wants to increase jobs, it should start where most jobs are created, with small businesses by eliminating K-1 taxation obligations for funds reinvested in growing small businesses. This would immediately translate to increased employment.

Instead, the government protects failing large corporations. Elected government officials would rather continue to take large business political contributions, spend $billions to prop-up inefficiency & corruption, protect unions, etc than solve the jobs problem.

sinner
01-30-2011, 06:29 PM
Wrong again in several respects. First, most small business already keep business records and reporting separate from personal data with their business interests reported on a K-1 form. 2nd, the vast majority of small businesses would have a significant IRS reporting burden to report as a c-corp that they couldn't afford. Next, why should small businesses that don't have the qualifications to or are financially unable to take advantage of current government incentives to large businesses under the current stimulus legislation (i.e., welfare to large business) be required to compete as if they are large corporations? Further small businesses have been virtually shutout from bank loans in the current business environment to finance growth, while large corps have been provided direct government assistence or guaranted loans.

In reference to double taxation, I didn't infer it. Instead I stated we paid an effective rate of 39% of our income in the form of taxes whether it was invested in the company or not. Small business invested funds do not receive a dollar for dollar exclusion/protection from taxes . Assets are depreciated (used up) based upon an IRS schedule, therefore the basis increase is not equal to what is invested. There are both year to year income taxes and capital gains taxes levied against what has previous been taxed as income but has been retained to purchase assets that remain at the time of sale. Since income taxes have been paid upon the income invested, then captial gains taxes collected on the value of what remains (which was previous taxed), you may call it what you like but its effect is an oppressive level of taxation. And under current IRS rules, electing c-corp status is no less oppressive for most small businesses(actually more oppressive by approx 5% in most states), just a different formula, different elections which can't be changed without penalty etc.

But you seem intent on looking at the trees rather than seeing the forest. Point being, small businesses, who employ most of the US, are today, were yesterday & will be for the forseeable future, adversely affected by their owner/stockholders being included in the top 1-2% (i.e., income over 200K) of incomes even though their reported income is primarily reinvested in the company. Such adverse effect is a direct deterrent to hiring employees in a growing small business.

The bolded portion is the thesis statement, my company's actual experience the proof. All to say, if our government really wants to increase jobs, it should start where most jobs are created, with small businesses by eliminating K-1 taxation obligations for funds reinvested in growing small businesses. This would immediately translate to increased employment.

Instead, the government protects failing large corporations. Elected government officials would rather continue to take large business political contributions, spend $billions to prop-up inefficiency & corruption, protect unions, etc than solve the jobs problem.

I agree totaly with the last statement. The last supreme court decision did not support your position.
The pannel to look into the last finanical colapse certain found both the banks, wall street and the Fed at fault.

Granddaddy
01-30-2011, 06:37 PM
Sinner, if you & YardleyLabs want to to discuss health care or who's at fault in the last financial collapse, I've an opinion which is likely different but let's discuss those on another thread or two. Just state your thesis on that new thread & invite discussion.

sinner
01-30-2011, 06:48 PM
You knowledge on the tax is very broad but your basis is very clear. Nothing anyone presents or says will change that. Therefore I will not bother to read your posts (or listen to Rush)
When a poor man gives something, that is a sacrifice indeed. When a rich man gives something, it hardly rises to the same level.

Granddaddy
01-30-2011, 07:49 PM
You knowledge on the tax is very broad but your basis is very clear. Nothing anyone presents or says will change that. Therefore I will not bother to read your posts (or listen to Rush)
When a poor man gives something, that is a sacrifice indeed. When a rich man gives something, it hardly rises to the same level.

There has been nothing germain to the thesis presented to indicate that the thesis is not true. Small businesses provide jobs & are deterred from that by the current application of taxation as described above.

Your philosophical statement stated and restated has nothing to do with the thesis stated (which might be explained by your admission that you are not reading the posts). Further taxes have nothing to do with giving. Choice is a prerequisite for giving. When it comes to the tax code, there is no choice, therefore no giving. Instead it is a levy by government mandate. When it comes to the poor in the US, the bottom 48% pay no income taxes. So the levy of income taxes imposed by the government falls entirely on the other 52%. In fact the top 5% of all wage earners, pays over 58% of the total income taxes paid. But taxes aren't gifts, whether paid by the super wealthy or the marginal tax payer because they aren't accompanied by the choice to pay them.

Where's that thread about health care funding or maybe who's really to blame for the last financial collapse? Waiting for you to take a defendable position......:rolleyes:

Granddaddy
01-31-2011, 10:35 AM
Are we all agreed then that the supposed "rich" who own small businesses shouldn't see increased incomes taxes and that increasing the taxes of small business owners deters job opportunties?

YardleyLabs
01-31-2011, 10:38 AM
Are we all agreed then that the supposed "rich" who own small businesses shouldn't see increased incomes taxes and that increasing the taxes of small business owners deters job opportunties?
No. I think businesses should pay no income taxes at all. I think those who profit from business -- whether as employees or owners -- should be taxed based on their total incomes and without regard to how they earned their money. There is no reason why income earned on wealth should be taxed at a lower rate than income earned by labor.

Granddaddy
01-31-2011, 03:47 PM
No. I think businesses should pay no income taxes at all. I think those who profit from business -- whether as employees or owners -- should be taxed based on their total incomes and without regard to how they earned their money. There is no reason why income earned on wealth should be taxed at a lower rate than income earned by labor.

You've said that already. Earned income is taxed the same. It's capital gains that are treated differently if held longer than 12 mos. Further, the things you support require major legislation changes.

But with all your comments, you have avoided the thesis. Question is, do you understand that under current law, by being unable to retain earnings, that small business hiring is affected/reduced?

YardleyLabs
01-31-2011, 04:06 PM
You've said that already. Earned income is taxed the same. It's capital gains that are treated differently if held longer than 12 mos. Further, the things you support require major legislation changes.

But with all your comments, you have avoided the thesis. Question is, do you understand that under current law, by being unable to retain earnings, that small business hiring is affected/reduced?
I have not avoided the thesis at all. I have disagreed with it. There is a difference.

All income is income, as I have stated before. I don't care if it comes from capital gains, interest, dividends, inheritance, sale of house, prostitution, or a nice traditional w-2 job. It should all be taxed at the same rate. The only justification for taxing capital gains and dividends at a lower rate is that corporate profits have already been taxed through corporate income taxes. I believe that corporation income tax is what needs to be eliminated. The justification for lower tax rates on dividends and capital gains then disappears (BTW, corporate profits then also increase by the amounts previously paid in taxes.).

I have also commented repeatedly that I believe that corporate earnings should be able to be retained within the company for reinvestment. I believe that can be done within current law if corporate taxes are eliminated and don't understand your concerns about why smaller companies need to remain as sub-s or llc structures if such taxes no longer exist. If a business owner is not willing to follow controls governing segregation of revenues and assets as are required of c-corps, then they may need to continue paying taxes on all earnings without the option of retaining earnings within the business. The problem at that point is their business decision, not the law.

I have operated at different times as a sole proprietorship, as a partnership, as a c-corp, and as a public company. Each carries its risks and benefits and, yes, I am aware of them. However, eliminating corporate taxes would immediately do away with the primary justification of many of those distinctions.

road kill
01-31-2011, 04:14 PM
So....do any of you have an answer to the OP's question?
9 pages....no answer?

I am just not sure why 10% of the population should pay 90% of the taxes.

(not an exact number, but it gets thrown around a lot)

I kind of like how Florida does it...........


stan b

Granddaddy
01-31-2011, 04:53 PM
I have not avoided the thesis at all. I have disagreed with it. There is a difference.

All income is income, as I have stated before. I don't care if it comes from capital gains, interest, dividends, inheritance, sale of house, prostitution, or a nice traditional w-2 job. It should all be taxed at the same rate. The only justification for taxing capital gains and dividends at a lower rate is that corporate profits have already been taxed through corporate income taxes. I believe that corporation income tax is what needs to be eliminated. The justification for lower tax rates on dividends and capital gains then disappears (BTW, corporate profits then also increase by the amounts previously paid in taxes.).

I have also commented repeatedly that I believe that corporate earnings should be able to be retained within the company for reinvestment. I believe that can be done within current law if corporate taxes are eliminated and don't understand your concerns about why smaller companies need to remain as sub-s or llc structures if such taxes no longer exist. If a business owner is not willing to follow controls governing segregation of revenues and assets as are required of c-corps, then they may need to continue paying taxes on all earnings without the option of retaining earnings within the business. The problem at that point is their business decision, not the law.

I have operated at different times as a sole proprietorship, as a partnership, as a c-corp, and as a public company. Each carries its risks and benefits and, yes, I am aware of them. However, eliminating corporate taxes would immediately do away with the primary justification of many of those distinctions.

And the above is your direct answer to the question of whether the rich should pay more taxes (the rich in my thesis being owners of growing small businesses)? Are you in politics? If not, you have a real talent for not anwering the question at great length and then asserting that you have.

Let's assume we can't change the current tax structure or associated laws (& we both know it won't happen under the current congress of one party & the pres a different party), like I wish I had Bill Gate's wealth & didn't have to worry about it, BUT THAT IS NOT GOING TO HAPPEN. So you would rather hold to that pipe dream wish list & ignore a current, real problem or offer something that might create jobs under present constraints?

And BTW, even the dictionary doesn't recognize inheritance as income, much less the IRS, so you are in lonely territory there. To produce income, earnings from work or investment have to be present. In the case of inheritance, the closest thing to it is a gift. This is no implication that inheritance should or should not be taxed, that's a different thread but you keep that pipe lit........

YardleyLabs
01-31-2011, 05:43 PM
And the above is your direct answer to the question of whether the rich should pay more taxes (the rich in my thesis being owners of growing small businesses)? Are you in politics? If not, you have a real talent for not anwering the question at great length and then asserting that you have.

Let's assume we can't change the current tax structure or associated laws (& we both know it won't happen under the current congress of one party & the pres a different party), like I wish I had Bill Gate's wealth & didn't have to worry about it, BUT THAT IS NOT GOING TO HAPPEN. So you would rather hold to that pipe dream wish list & ignore a current, real problem or offer something that might create jobs under present constraints?

And BTW, even the dictionary doesn't recognize inheritance as income, much less the IRS, so you are in lonely territory there. To produce income, earnings from work or investment have to be present. In the case of inheritance, the closest thing to it is a gift. This is no implication that inheritance should or should not be taxed, that's a different thread but you keep that pipe lit........
First, the rich are generally not owners of small businesses. While the percentage of people owning small businesses who also earn over $200k per year is higher than for the general population, small business owners are only a small fraction of those with incomes over $200k. If you raise the income limits higher, say over $1 million, the number of small business owners goes down rapidly.

Second, yes I believe in a progressive tax system. I also believe that the tax system is defined by all the taxes that exist and not just the income tax. The Federal income taxes is one of the only progressive taxes in existence (see my first post for more on this). Almost all other taxes are regressive. That is why you see conservative complaints being leveled against the "unfairness" of the income tax while social security taxes, which are regressive, are ignored. That is why Reagan received kudos for cutting taxes when he more than doubled social security taxes. The fact is that the primary function of government is the protection of wealth, property, and the economy, and the primary beneficiaries of those activities are those earning the most money. They (we) should pay more in taxes to reflect that. The notion of per capita taxation diappeared with the founding of our Republic and a final stake was driven through its heart with the adoption of the 16th amendment. There was good reason for that then and better reason today.

Granddaddy
01-31-2011, 06:30 PM
First, the rich are generally not owners of small businesses. While the percentage of people owning small businesses who also earn over $200k per year is higher than for the general population, small business owners are only a small fraction of those with incomes over $200k. If you raise the income limits higher, say over $1 million, the number of small business owners goes down rapidly.

Second, yes I believe in a progressive tax system. I also believe that the tax system is defined by all the taxes that exist and not just the income tax. The Federal income taxes is one of the only progressive taxes in existence (see my first post for more on this). Almost all other taxes are regressive. That is why you see conservative complaints being leveled against the "unfairness" of the income tax while social security taxes, which are regressive, are ignored. That is why Reagan received kudos for cutting taxes when he more than doubled social security taxes. The fact is that the primary function of government is the protection of wealth, property, and the economy, and the primary beneficiaries of those activities are those earning the most money. They (we) should pay more in taxes to reflect that. The notion of per capita taxation diappeared with the founding of our Republic and a final stake was driven through its heart with the adoption of the 16th amendment. There was good reason for that then and better reason today.

Again you avoid the thesis, to instead pontificate on your view of how taxes should be levied and collected - requring a complete overall of the tax code - favoring the large multi-national corporations.

1st, the rich for my thesis included owners of small businesses with combined company & personal income of $200K or more. The rich, as defined by current proposals of the democratic party include everyone with income over $200K regardless of its origin, personal or company (in the case of small business owners). There are a significant number of small businesses within this category. This means, as I have stated previously, all small business owners whose companies earn in excess of $200K per year, simply because of the current tax code wording, requires these small business owners to pays income taxes on those company earnings as if they are that owner's personal income, even when not otherwise distributed & used personally. Such a practice, is THE primary deterrent to additional hiring by growing small businesses. This is particularly relevant now because of the high unemployment rate which persists dispite the massive stimuli & bailouts by the Obama government. It is even more relevant, because (according to fed gov statistics), such small businesses have provided the majority of new jobs within the US over the last 15 years. And there has been no suggestion from my part to raise the exception from income taxes upon the rich per say. Instead I have suggested a simple & very narrow exemption of small business earnings from income taxes as long as they remain in the business (to be on par with large corp tax status). Notwithstanding your claims to the insignificance of such small businesses, they do employ the majority of Americans & have consistently provided the majority of jobs within the US over the last 15 yrs.

And to your assertion that "we" should pay more taxes, the obvious answer is "we" do. So much so that the top 5% pay 58%+ of all income taxes & the bottom 48% pay no income taxes at all (see the link to IRS statistics above).

And just a minor, yet substantial, correction to your assertion that FICA taxes are regressive. They are, in fact, just as progressive as the income tax for everyone earning under $106,800 in salary or wages. This means that to the vast majority of wage earners, the FICA tax levy is progressive. Just another note, gov aid to individuals, is the single most progressive portion of US gov aid that exists. Meaning that such payments are strictly limited to the lowest income earners or not to earners at all. I'm not implying fair or unfair, just that the tax code is stacked against moderate & wealthy tax payers at both ends.

My original post & all subsequent have all been motivated by the persistent, high rate of unemployement while billions have been spent on US gov programs that have not yielded one net new job when compared to the 15 yr avg rate of employment within the US. And since small business provides and has provided the majority of new jobs within the US over the same 15 yrs, it only makes logical sense to address the needs of small business in order to create new jobs. If the simple, narrowly focused tax consideration I suggest above were adopted, within 2-3 yrs our unemployment rate would likely be reduced by 50% or more. This would significantly reduce gov costs of unemployment, greatly increase real production within the US and create the demand for that increased production.

And there may be some merit to your suggestions, but they ignore the thesis of this thread topic.

road kill
01-31-2011, 06:33 PM
So....do any of you have an answer to the OP's question?
9 pages....no answer?

I am just not sure why 10% of the population should pay 90% of the taxes.

(not an exact number, but it gets thrown around a lot)

I kind of like how Florida does it...........


stan b

No, sorry, we can't waste time answering the OP's question.

There is bandwidth to be consumed.......


RK

YardleyLabs
01-31-2011, 08:05 PM
Again you avoid the thesis, to instead pontificate on your view of how taxes should be levied and collected - requring a complete overall of the tax code - favoring the large multi-national corporations.

1st, the rich for my thesis included owners of small businesses with combined company & personal income of $200K or more. The rich, as defined by current proposals of the democratic party include everyone with income over $200K regardless of its origin, personal or company (in the case of small business owners). There are a significant number of small businesses within this category. This means, as I have stated previously, all small business owners whose companies earn in excess of $200K per year, simply because of the current tax code wording, requires these small business owners to pays income taxes on those company earnings as if they are that owner's personal income, even when not otherwise distributed & used personally. Such a practice, is THE primary deterrent to additional hiring by growing small businesses. This is particularly relevant now because of the high unemployment rate which persists dispite the massive stimuli & bailouts by the Obama government. It is even more relevant, because (according to fed gov statistics), such small businesses have provided the majority of new jobs within the US over the last 15 years. And there has been no suggestion from my part to raise the exception from income taxes upon the rich per say. Instead I have suggested a simple & very narrow exemption of small business earnings from income taxes as long as they remain in the business (to be on par with large corp tax status). Notwithstanding your claims to the insignificance of such small businesses, they do employ the majority of Americans & have consistently provided the majority of jobs within the US over the last 15 yrs.

And to your assertion that "we" should pay more taxes, the obvious answer is "we" do. So much so that the top 5% pay 58%+ of all income taxes & the bottom 48% pay no income taxes at all (see the link to IRS statistics above).

And just a minor, yet substantial, correction to your assertion that FICA taxes are regressive. They are, in fact, just as progressive as the income tax for everyone earning under $106,800 in salary or wages. This means that to the vast majority of wage earners, the FICA tax levy is progressive. Just another note, gov aid to individuals, is the single most progressive portion of US gov aid that exists. Meaning that such payments are strictly limited to the lowest income earners or not to earners at all. I'm not implying fair or unfair, just that the tax code is stacked against moderate & wealthy tax payers at both ends.

My original post & all subsequent have all been motivated by the persistent, high rate of unemployement while billions have been spent on US gov programs that have not yielded one net new job when compared to the 15 yr avg rate of employment within the US. And since small business provides and has provided the majority of new jobs within the US over the same 15 yrs, it only makes logical sense to address the needs of small business in order to create new jobs. If the simple, narrowly focused tax consideration I suggest above were adopted, within 2-3 yrs our unemployment rate would likely be reduced by 50% or more. This would significantly reduce gov costs of unemployment, greatly increase real production within the US and create the demand for that increased production.

And there may be some merit to your suggestions, but they ignore the thesis of this thread topic.
How have I ignored your thesis? I have addressed point by point everything you have said. And, by the way, by definition, a progressive tax is one that charges a higher percentage tax rate for higher incomes than is charged for lower incomes. A proportional tax is one that charges the same percentage tax rate regardless of income. A regressive tax is one that charges a high percentage rate for lower incomes. Social security is a regressive tax because those with incomes of $200,000 are paying a lower percentage of their incomes for social security tax than those earning $20,000 per year. Sales tax, when applied across all types of consumption, is a regressive tax because lower income people spend a higher percentage of their incomes than higher income people.

I actually believe that it should be easier for all businesses to retain earnings for future investment. I also suggested what I believe is a better way to achieve that result. However, I believe that all monies received by individuals as income should be taxed, without regard to how that money was earned. That means that the minute the money comes out of the business it should be taxed at the same rate as salaries and wages -- no exemptions and no preferences. There is no evidence whatsoever to suggest that consumption by the wealthy adds more benefit to the economy than consumption by the non-wealthy. Get rid of payroll taxes as a source of financing for social security, medicare and unemployment. Get businesses out of the business of financing health care insurance. Don't tax business profits unless those profits are distributed to individuals in whatever form. Do those things and America's competitive position in the global economy will improve dramatically, there will be fewer incentives to relocate jobs to other countries, and business investment will sky rocket, creating more jobs. What's the downside? Personal income tax rates will go up significantly, offset to an unknown extent by increases in personal income.

Buzz
01-31-2011, 10:57 PM
Jeff, he specifically said that if your income is less than $106,000 the social security tax is progressive.

I guess I shouldn't speak for David, but considering the way that the benefit is calculated, SS tax in that income bracket is progressive.

The specifics of the calculation is at www.ssa.gov. First what you do is calculate your indexed monthly earnings during your top 35 earning years. Then you bracket the monthly income multiply each bracket by a percentage. That part of the calculation is copied and pasted below. You get 90% of your first $761, then 32% of the next $3825, then the rest gets multiplied by 15%.

It's easy to see that the size of the benefit is weighted toward the lower income. I guess I never minded because I figured that at least I can afford to put away 25% of my income every year to invest for retirement. However now they are talking about raising the cap on income that's taxed for SS and at the same time cutting the maximum benefit. That ticks me off. They wait till I'm 50, then start talking about raising the income level that the tax will apply to, increasing the retirement age again, and cut my benefit.

Step 5:

a. Multiply the first $761 in Step 4 by 90%.


$__________________

b. Multiply the amount in Step 4 over $761 and less than or equal to $4,586 by 32%. .

$__________________

c. Multiply the amount in Step 4 over $4,586 by 15%. .

$__________________

Step 6:
Add a, b and c from Step 5. Round down to the next lowest dollar. This is your estimated monthly retirement benefit at age 66, your full retirement age.

$__________________


PS:

I would be more than happy to see earnings not taxed until they are distributed, allowing small business to invest in growing their business "pre-tax." I am assuming however that uncle sam would want to take away the ability to write off depreciation and they would likely want to reduce the impact that the pre-tax reinvestment had on your basis in return for the "favor."

YardleyLabs
02-01-2011, 02:12 PM
Jeff, he specifically said that if your income is less than $106,000 the social security tax is progressive.

I guess I shouldn't speak for David, but considering the way that the benefit is calculated, SS tax in that income bracket is progressive.

The specifics of the calculation is at www.ssa.gov (http://www.ssa.gov). First what you do is calculate your indexed monthly earnings during your top 35 earning years. Then you bracket the monthly income multiply each bracket by a percentage. That part of the calculation is copied and pasted below. You get 90% of your first $761, then 32% of the next $3825, then the rest gets multiplied by 15%.

It's easy to see that the size of the benefit is weighted toward the lower income. I guess I never minded because I figured that at least I can afford to put away 25% of my income every year to invest for retirement. However now they are talking about raising the cap on income that's taxed for SS and at the same time cutting the maximum benefit. That ticks me off. They wait till I'm 50, then start talking about raising the income level that the tax will apply to, increasing the retirement age again, and cut my benefit.

Step 5:

a. Multiply the first $761 in Step 4 by 90%.


$__________________

b. Multiply the amount in Step 4 over $761 and less than or equal to $4,586 by 32%. .

$__________________

c. Multiply the amount in Step 4 over $4,586 by 15%. .

$__________________

Step 6:
Add a, b and c from Step 5. Round down to the next lowest dollar. This is your estimated monthly retirement benefit at age 66, your full retirement age.

$__________________


PS:

I would be more than happy to see earnings not taxed until they are distributed, allowing small business to invest in growing their business "pre-tax." I am assuming however that uncle sam would want to take away the ability to write off depreciation and they would likely want to reduce the impact that the pre-tax reinvestment had on your basis in return for the "favor."
Actually, the tax is proportional -- everyone paying the same percentage up to the cap. It is regressive only because of the cap, but that includes those earning $200k+ who were the subject of David's initial post. The benefit definitely favors lower income people. However, questions of benefits from government services apply at all income levels and to all governments services. To focus on one while ignoring the others is cherry picking. The activities of government as a whole (including all levels of government) benefit all, but not equally. Those who are poor and those with property tend to benefit disproportionately.

luvmylabs23139
02-02-2011, 10:41 AM
Pretty screwed up, I agree. I hope you've written your congressmen urging them to change the tax code.
I sent congresswoman and both senators the entire breakdown with IRS forms included and asked them for an explanation. I asked them to explain why this blatent redistribution of income was not socialism. Should be interesting to see if I get any responses.
I also reminded them that everyone has an option to not reproduce by simply crossing their legs and keeping their pants zipped.

pat addis
02-02-2011, 11:21 AM
every one who wants to live in this country should pay a income tax i don't care if it's only a dollar a year. you need to have some skins in the game to play

Granddaddy
02-02-2011, 11:25 AM
Unfortunately 48% don't pay any income taxes & that percentage is increasing annually.....all the while our gov continues to extend unemployment compensation and the deficit grows larger & larger.

TX WINGSHOOTER
03-02-2011, 03:53 PM
I think that the refundable credits should not exist in the tax code. People getting paid by the tax system for not making much money is not incentive to do better.

I think the super rich should pay even more in tax. I believe the economy is more complex that the board game Monopoly, but don't the winner end up wiping out everyone else? If the donimate players in Monopoly paid tax everytime they pass GO then the game would go forever.

Is the board game Monopoly already happened to the small business owner. Hard to compete against the big corporations and even remotely think you can be competitive.

Small businesses "service" has to be the competitive advantage.

IRS said 1 B. dollars in refunds about to expire for the tax year 2007. They send invitations to people that "owe" money, I wonder why they can't send the notice to the people that fall under the 1 B. dollars refund.

Folks - always follow the money trail and question motives.

I am sure that all the millionaire politicians are there because they want to make a difference. RIGHT.....

Uncle Bill
03-02-2011, 05:43 PM
I think that the refundable credits should not exist in the tax code. People getting paid by the tax system for not making much money is not incentive to do better.

I think the super rich should pay even more in tax. I believe the economy is more complex that the board game Monopoly, but don't the winner end up wiping out everyone else? If the donimate players in Monopoly paid tax everytime they pass GO then the game would go forever.

Is the board game Monopoly already happened to the small business owner. Hard to compete against the big corporations and even remotely think you can be competitive.

Small businesses "service" has to be the competitive advantage.

IRS said 1 B. dollars in refunds about to expire for the tax year 2007. They send invitations to people that "owe" money, I wonder why they can't send the notice to the people that fall under the 1 B. dollars refund.

Folks - always follow the money trail and question motives.

I am sure that all the millionaire politicians are there because they want to make a difference. RIGHT.....


I hate to take exception to your views, but please explain how it's hard to compete against the big corporations? The corporations in trouble in this country ARE the BIG ones. The small ones didn't allow the unions to get hold of them by the short hairs and promise them the moon, knowing the money will eventually run out; especially when you are paying non-working-retirees the same amount as when they were producing. How intelligent is that?

UB

cotts135
03-03-2011, 06:51 AM
I hate to take exception to your views, but please explain how it's hard to compete against the big corporations? The corporations in trouble in this country ARE the BIG ones. The small ones didn't allow the unions to get hold of them by the short hairs and promise them the moon, knowing the money will eventually run out; especially when you are paying non-working-retirees the same amount as when they were producing. How intelligent is that?

UB

I think you need to define what a big corporation is. Seems to me that a lot of big corporations are doing just fine especially if they are in one of the big six industries that control Congress. (Health Care,Defense,Energy, Agriculture, Telecom, and the biggest- Banking)
No doubt Unions buy politicians in order to get the best possible benefits for there members------- but this is no different than what big industry does. They influence politicians with promises of campaign contributions if they will vote a certain way on a piece of legislation that will benefit them. Often times these are amendments added to the proposal at the last minute that most of us don't find out about until the bill is passed. Where is the outrage about these guys?
The current whipping boy is the Unions but they are not alone. Until we take a comprehensive look at campaign finance and fix what is broken(Legal Bribes) we will continue to get the same results.

TX WINGSHOOTER
03-03-2011, 09:20 AM
UB.....maybe I am looking at things from a narrow perspective, but the 80 small business clients that I work with can't afford the locations, absorbtion of start up of new facilities, and all the other benefits high volume companies can.

Feed stores - can't compete with Tractor Supply with locations, hours, purchasing power

Nurseries - head to head with Lowe's / Home Depot / etc.........

Auto Garages - the auto dealers and the complexities of vehicles now is tuff

Appliances - head to head with Sears, Home Depot, Lowes,

In my opinion "service" and "differentiation" must be a small businesses plan.