15% income tax? How is that possible?

[PLYMCO_PILGRIM]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .

How did you get 44.75% exactly?

Im just curious.

 

[asterism]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .

How did you get 44.75% exactly?

Im just curious.

The $100 Million is taxed 35% at the corporation level, or $35 Million. The remaining $65 Million to be distributed to the shareholders is taxed at 15%, or $9.75 Million.

$35,000,000 + $9,750,000 = $44,750,000 in taxes which is 44.75% of $100,000,000.

 

[PLYMCO_PILGRIM]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .

How did you get 44.75% exactly?

Im just curious.

The $100 Million is taxed 35% at the corporation level, or $35 Million. The remaining $65 Million to be distributed to the shareholders is taxed at 15%, or $9.75 Million.

$35,000,000 + $9,750,000 = $44,750,000 in taxes which is 44.75% of $100,000,000.

thanks

 

[Paulie]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .

Wouldn't it even be higher than that? A lot of corps are taxed 35% on earnings, and then their dividends are taxed at 15%.

Correct me if that's flawed.

 

[Paulie]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .

Wouldn't it even be higher than that? A lot of corps are taxed 35% on earnings, and then their dividends are taxed at 15%.

Correct me if that's flawed.

Nevermind I just read your other post to Plymco.

 

[Paulie]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .

How did you get 44.75% exactly?

Im just curious.

The $100 Million is taxed 35% at the corporation level, or $35 Million. The remaining $65 Million to be distributed to the shareholders is taxed at 15%, or $9.75 Million.

$35,000,000 + $9,750,000 = $44,750,000 in taxes which is 44.75% of $100,000,000.

This is fine, but keep in mind that no corporation distributes its entire profit as dividends.

The best way to come up with a tangible % is to get a national average of dividend distribution percentage and go from there.

 

[Ravi]

The effective corporate tax rate of large corporations, your 100 million dollar one, is actually around 25%, not 35%.

 

[asterism]

How did you get 44.75% exactly?

Im just curious.

The $100 Million is taxed 35% at the corporation level, or $35 Million. The remaining $65 Million to be distributed to the shareholders is taxed at 15%, or $9.75 Million.

$35,000,000 + $9,750,000 = $44,750,000 in taxes which is 44.75% of $100,000,000.

This is fine, but keep in mind that no corporation distributes its entire profit as dividends.

The best way to come up with a tangible % is to get a national average of dividend distribution percentage and go from there.

Plenty of corporations do this, they just aren't the Fortune 500.

The purpose of this thread is to debunk the myth that investors pay a lower tax rate than workers. They don't.

 

[asterism]

The effective corporate tax rate of large corporations, your 100 million dollar one, is actually around 25%, not 35%.

Show me some data for this.

Regardless, 25% at the corporate level on top of 15% at the investor level is much more than the 15% touted by those who think "the rich" don't pay their fair share.

 

[Ravi]

http://www.gao.gov/new.items/d08950.pdf#page=5

 

[asterism]

http://www.gao.gov/new.items/d08950.pdf#page=5

Do you know what the GAO excludes to come up with that data?

 

[asterism]

http://www.gao.gov/new.items/d08950.pdf#page=5

That is specific to large multinational corporations. True, MNC's have lower effective domestic tax rates. That's a tax code manipulation designed to repatriate foreign earned income.

 

[Bern80]

I am still not sure how 40+% of the population pay no tax. Even welfare recipients should have to pay something. I like the flat tax. If I buy a $1,000 car I pay for the value if you buy a $100,000 car you pay 100 time more than I do.

40% of the population don't pay "no tax". Every American with a job pays between 7.65% and 15.3% of their first 106,000 of earnings in federal taxes. They also pay a host of other taxes.

To be fair some careful wording is generally used. Along the lines of 40+% of americans have no income tax liability. Meaning that while, yes, if you are an hourly employee taxes are being withdrawn from your paycheck. The 'no liability' comes in when it's time to actually do your taxes. Through combinations of credit for dependents and low income at the end of the tax year they get back what they paid in taxes over the year. Thus they had no income tax liability.

I really would like to see a flat or fair tax as well along with strict government spending guidelines. One bill proposed recently was that the federal budget should not exceed more than 18% of GDP. GDP can also basically be looked as the total income of the nation. The senator came up with this number because interestingly enough, regardless of the structure of the tax code the government has averaged around 17% of GDP tax revenue year in and year out for decades. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205 I thought that was interesting. That the games politicians play with the tax code at the end of the day have almost no bearing on the amount of money they'll have to work with.

 

[Care4all]

someone making a hundred grand a year, who ends up paying only $500 bucks in taxes after they have taken all of their deductions or someone making 50 grand a year but pays zero after they have taken all of their legal deductions........are they put in this group you all constantly criticize?

 

[Care4all]

if i can ever reach a stage where I pay no income taxes, then God bless me! I would have no feelings of guilt....not after paying near 30 grand a year in taxes for several years in a row.....during my working years with Matt.

now that i am retired and matt is semi retired (working a little more than part time), with very little income coming in, with deductions, we come close to not having to pay any income tax and every year when doing our income tax return, I shoot for not having to pay any at all....haven't reached it yet, but am trying my hardest!

I feel no GUILT for such, I am not lesser of a human or not lesser of a citizen!

if you do not allow the middle class or the poor their deductions that bring them down to paying nil in income taxes then YOU WILL NOT GET THOSE DEDUCTIONS EITHER, and YOU will be paying much more than now in income taxes...

Is that what you REALLY WANT?

i doubt it.....

 

[PLYMCO_PILGRIM]

The whole point of this thread was that the 15% income tax claim by Buffet and Obama was a dishonest statement care

At least thats what it was meant as when it started

 

[asterism]

The whole point of this thread was that the 15% income tax claim by Buffet and Obama was a dishonest statement care

At least thats what it was meant as when it started

Yup.

The 15% talking point is bullshit.

 

[Care4all]

The capital gains tax rate is 15%. I'm not sure how you can declare that fact "bullshit". it's just a fact.

That's the capital gains rate of a personal realization of a long term investment. Corporate taxes are also paid on the gains but are paid before the investor is paid. The other way is to files as an S-Corporation where all income passes through to the owners and those earnings (even if left in the company) are all taxed at the personal income rate.

so, if the corp paying me as a worker, pays corp taxes, do i get to claim those taxes as taxes i have paid?

do i pay 15% taxes each year i own the stock and the stock prices go up....or can i avoid paying taxes on the increase in stock value for 10,15, 20 plus years?

don't i only pay taxes when i decide to sell it, and avoid them on a yearly bases? somewhat like a tax shelter for those years i hold on to it?

hint.

the person paying capital gains is paying income taxes only ONCE, when they sell it...and only paying taxes on what their gain on the stock was from their initial investment with already taxed monies.

they are NOT being taxed twice as you are trying to claim.

if so, then i am being taxed 4 times for the same money earned...taxed on full income for income tax, taxed on the full income for SS tax, taxed on the full income for medicare tax and taxed on all my corporate product purchases since i am paying the majority of the corp income taxes in the price of the products i buy....and taxed for gasoline purchases which have corporate taxes in it and has federal and state taxes in them....

then taxed on full taxable income for state taxes too....then with same money i've earned and paid federal and state taxes on, i am taxed again for using it to buy things....and to pay property taxes.

cry me a river!

 

[Bern80]

if i can ever reach a stage where I pay no income taxes, then God bless me! I would have no feelings of guilt....not after paying near 30 grand a year in taxes for several years in a row.....during my working years with Matt.

now that i am retired and matt is semi retired (working a little more than part time), with very little income coming in, with deductions, we come close to not having to pay any income tax and every year when doing our income tax return, I shoot for not having to pay any at all....haven't reached it yet, but am trying my hardest!

I feel no GUILT for such, I am not lesser of a human or not lesser of a citizen!

if you do not allow the middle class or the poor their deductions that bring them down to paying nil in income taxes then YOU WILL NOT GET THOSE DEDUCTIONS EITHER, and YOU will be paying much more than now in income taxes...

Is that what you REALLY WANT?

i doubt it.....

No. What I want is a tax code that treats everyone exactly the same. No deductions, no loopholes, no breaks, no progressive rates. If the theory is we all derive benefit from what we pay in taxes then no one ought to be exempt from paying them, regardless of your income or stage in life.

 

[OohPooPahDoo]

Barring specific rare loopholes, how does someone who earns the bulk of their money through investing pay only this rate?

Money earned by long term capital gains is at most taxed 15%. A long term capital gain is a capital gain on an asset held for more than one year. All of this information is easily available on the IRS website or on wiki.

The uber-rich - the nation's 400 richest - pay an average tax rate of 17%. Most of it is in the 15% capital gains tax.

On the other hand - the nation's working rich - our CEO's, doctors, business owners, lawyers, etc. - they pay over 30%.