Earlier quoted context omitted.
Corporations have to pay quarterly estimated taxes.
So do most contractors.
So do most very wealthy people. Rule of thumb (possibly law?): if you will owe more than $1000 at tax time, you have to file quarterly.
Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
131–140 of 323 posts
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#132Earlier quoted context omitted.
yes, but those workers will at some point retire and live off their investment income, no?
And they would have had much more money to invest if their income tax had been lower. You don't seem to want to understand my point: Low taxes for investment benefits wealthy people disproportionately. Yes, lower income also get some benefit but the vast majority goes to the wealthy. Same for all the Republic "tax reform" proposals: A little tax cut for small incomes, large tax cut for high incomes.
it's a zero sum view of the world that is not correct. You could be lower income when you are 30 and wealthy when you are 65. So it's a lot of the same people that benefit. But more importantly, you are not considering the benefit of higher investment that the wealthy make because their investment taxes are lower. Higher investment leads to more economic activity and more jobs. In fact, the whole world has moved over time for this reason to taxing consumption more than investment.
Yes, I understand Saez disagrees. But he is hardly the final word on this. Hardly.
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#133Earlier quoted context omitted.
They would benefit from a funded government. Schools and other public services cost money.
Our government is more funded than any other government on the face of the planet. It's that they're unbelievably terrible at prioritizing and budgeting.
Cites?
I mean, at heart this is easy to agree with. We all want to think that there is waste. And there probably is a ton of it. The problem I have is the cost of fighting some waste is more expensive than it is worth. I realize this is about charity, but https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou... is one of the few TED talks I actually still like. I'd be very interested in seeing rebuttals.
There is also the argument that corruption follows money. And that is certainly true. Doesn't do a lot to help the many people in underfunded locations of our nation.
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#134The biggest lie is this nonsense about "double taxation," ie taxing money that's already been taxed is somehow unfair. So stupid. Capital gains tax shouldn't exist. It should all be one income tax. You can carve out discounts or exemptions for things like sale of PPOR, sale of family business up to a certain point, if you want.
You would have to start adjusting for inflation. If I bought an asset in 1980 and it just tracked inflation, you'd show a nominal 200% profit. But really, it's worth the same as before.
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#135Here is a question for any tax attorneys out there. Not sure how to find a clear answer to this question but these pages[1][2] seems to suggest that the capital gains tax rate is based on your "Taxable Income". This is shown further down the second page to be "really Regularly Taxed Income minus Adjustments, Deductions, and Exemptions". If your "Taxable Income" is less than 37,950 your long range capital gains tax is…
IANATA, but if you look at the qualified dividends and capital gains tax worksheet [0] on personal income tax form 1040 (that’s the main tax form for individuals), you’ll find that your capital gains tax rate is dependent on your income including capital gains.
For the purposes of your example, Larry and Sergei would pay no tax on the first 37,949 of capital gain income (thanks to the $1 salary), but regular capital gain rates on the next ~billion.
[0]: https://apps.irs.gov/app/vita/content/globalmedia/capital_ga...
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#136Earlier quoted context omitted.
They would benefit from a funded government. Schools and other public services cost money.
No. No. No. It is really hard to take someones money and claim you can do better with it than they can, especially if that: #1 you do not share their views #2 you have no obligation to spend the money on what you stole it for #3 you have a proven track record for inefficiency Want to help me out? let me keep my damn money, let me decide what is right for me. you got an agenda? spend your own money toward it. its also…
Using rhetoric like "stole it for" doesn't help your cause. Pretty much period.
I'm interested in debating some of these points. (Honestly more interested in seeing others debate it.) However, if you are going to get emotional on points, realize that you are betraying that you likely haven't researched the points.
As an example, the claim that "almost all school funding" does not come from these taxes is not as true as "almost none of these taxes go to school funding." More, this belies the idea that you would be willing to have these taxes exist, if they went to schools. I am guessing this was not your intent. Though, I am also guessing you use this rhetoric to your advantage.
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#137Earlier quoted context omitted.
Salaries (and bonuses) are considered expenses for the company and will be tax deductible. I believe the example was that you may as a contractor (with your own company) receive a bonus to your corporation and be able to offset taxes for another 11 months compared to having the bonus paid out personally.
Working as a contractor for your wholly-owned company would never pass muster with the IRS. You might be able to avoid audit for a little while, but when this catches up to you it will be a huge mess. They would recast the transactions (they can do this) and you'd end up owing a ton of tax and penalties. Source: I'm a (former) tax lawyer.
That's why you pay yourself a small, but not alarmingly small, salary W2 and take the rest on your K1 or such.
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#138Earlier quoted context omitted.
That's to encourage money to be invested and also to compensate for the risks.
If I had the money, I'd renovate my roof, get a solar roof with battery backup, etc. It's an investment just as much as in any business; why am I discriminated against as an individual?
Maybe you can form a corporation and lease the roof area from your house, and deduct the investment?
I'm not really serious, but perhaps something along those lines is an option?
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#139> You owe the IRS about $38,500 more, assuming each of us pays the maximum with no special deductions. This also assumes the investor has no interest income, which would be unlikely. For a younger person with a big nest egg, this wouldn't be a huge chunk of their assets. But as you age you'd want to shift into less-risky assets, like interest-bearing ones. Also, investors would probably be diversified into real estat…
Yes. I would assume the article's point IS to emphasize the author's point.
Sure! It'd be more credible if it acknowledged the unrealistic assumptions that it's making. Reminds me of the Engineering dept t-shirt I saw in college: "assuming a spherical cow..."
Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors
#140There's a startup idea in this. Help people convert to corp-to-corp with their employer. Get them set up with health insurance and the normal bennies. Take advantage of the preferable tax position.