Mitt Romney pays a lower tax rate than you do.

[Article 15]

I'm still not understanding how a dividend paid to a stock holder from a company that doesn't pay taxes is taxed twice.

The money was subjected to taxes twice. They just didn't earn enough to have a tax liability. Would you apply that same standard to people's income? If a poor person earned $20K, but their taxes were zero, that the money wasn't taxed and somehow they should have to pay taxes on it later?

If they didn't earn enough to merit a tax liability then they paid no taxes on it. Thus the dividend is only taxed once.

Unless you want to argue the total taxes they paid on the dividend was 0% + 15% and call that "double" tax, which I find kinda funny.

 

[Trajan]

I'm still not understanding how a dividend paid to a stock holder from a company that doesn't pay taxes is taxed twice.

becasue the pie is smaller Art. if a co. earns 100 dollars in profit, then pays 35% in corp tax. whats left on/for your share either in cap gains via a dividend etc. is smaller, then when it is transferred to the stock holder, they pay 15% on that personal gain there. Oh and there is a max altogether, its 44.75%.

Yet GE didn't pay taxes in 2010 but still paid a dividend every quarter.

deductions my man, the life blood of many corps.

and not all of them are bad, I get your point, how can a stock holder make money the co. make a net operating profit and yet not pay net taxes. and again its not that simple, they paid taxes thru their operating and production but as for net net fed. tax period, thats above my head.

 

[kaz]

I'm still not understanding how a dividend paid to a stock holder from a company that doesn't pay taxes is taxed twice.

The money was subjected to taxes twice. They just didn't earn enough to have a tax liability. Would you apply that same standard to people's income? If a poor person earned $20K, but their taxes were zero, that the money wasn't taxed and somehow they should have to pay taxes on it later?

If they didn't earn enough to merit a tax liability then they paid no taxes on it. Thus the dividend is only taxed once.

Unless you want to argue the total taxes they paid on the dividend was 0% + 15% and call that "double" tax, which I find kinda funny.

What about answering the question then.

 

[kaz]

deductions my man, the life blood of many corps.

You realize deductions are money they spent to earn the revenue. The government actually delays writing off expenses.

 

[Article 15]

becasue the pie is smaller Art. if a co. earns 100 dollars in profit, then pays 35% in corp tax. whats left on/for your share either in cap gains via a dividend etc. is smaller, then when it is transferred to the stock holder, they pay 15% on that personal gain there. Oh and there is a max altogether, its 44.75%.

Yet GE didn't pay taxes in 2010 but still paid a dividend every quarter.

deductions my man, the life blood of many corps.

and not all of them are bad, I get your point, how can a stock holder make money the co. make a net operating profit and yet not pay net taxes. and again its not that simple, they paid taxes thru their operating and production but as for net net fed. tax period, thats above my head.

So it's really not fair to just flat out assume that all dividend are double taxed....or at least at such a high rate.

And I get your point as well and I agree that dividends can be double taxed but that rate varies greatly.

It's when people try to claim that all capital gains are "double taxed" that I object because the capital gains tax paid on the profit from the sale of stock is not taxed twice.

 

[Article 15]

The money was subjected to taxes twice. They just didn't earn enough to have a tax liability. Would you apply that same standard to people's income? If a poor person earned $20K, but their taxes were zero, that the money wasn't taxed and somehow they should have to pay taxes on it later?

If they didn't earn enough to merit a tax liability then they paid no taxes on it. Thus the dividend is only taxed once.

Unless you want to argue the total taxes they paid on the dividend was 0% + 15% and call that "double" tax, which I find kinda funny.

What about answering the question then.

No, because it's not the same type of income.

 

[kaz]

If they didn't earn enough to merit a tax liability then they paid no taxes on it. Thus the dividend is only taxed once.

Unless you want to argue the total taxes they paid on the dividend was 0% + 15% and call that "double" tax, which I find kinda funny.

What about answering the question then.

No, because it's not the same type of income.

 

[Valerie]

I'm not sure how this is going to come out in a c&p but here is some more good info:

Small Business Taxes & Management

Corporate Income Tax Rates--2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005

Taxable income over Not over Tax rate

$ 0 $ 50,000 15%
50,000 75,000 25%
75,000 100,000 34%
100,000 335,000 39%
335,000 10,000,000 34%
10,000,000 15,000,000 35%
15,000,000 18,333,333 38%
18,333,333 .......... 35%


Personal Service Corporations
Personal service corporations are subject to a flat tax of 35% regardless of their income.



Personal Holding Company
Personal holding companies are subject to an additional tax at 15% (higher in 2002 and prior years) on any undistributed personal holding company income. (Code Sec. 541)



Accumulated Earnings Tax
In addition to the regular tax, a corporation may be liable for an additional tax at 15% (higher in 2002 and prior years) on accumulated taxable income in excess of $250,000 ($150,000 for personal service corporations). (Code Sec. 531)



Miscellaneous Business Data

Maximum Section 179 Expense Deduction

2012 2011 2010 2009 2008 2007 2006
$139,000 $500,000 $500,000 $250,000 $250,000 $125,000 $108,000


Phaseout--$560,000 for 2012; $2,000,000 for 2011; $2,000,000 for 2010; $800,000 for 2009; $800,000 for 2008; $500,000 for 2007; $430,000 for 2006.

Note. An increased Sec. 179 deduction is available to enterprise zone businesses and renewal community business in certain situations. In addition, an increased Sec. 179 deduction is available for certain Sec. 179 Disaster Assistance property. Check the rules in place at the time the property is placed in service. Finally, the maximum deduction for heavy sport utility vehicles and certain other vehicles is restricted to $25,000.



Tax Facts for Individuals--2012

Tax Rate--Single Taxpayers--2012

Taxable income: Tax:
Over But not over Tax +% On amount over

$ 0 $ 8,700 $ 0.00 10 $ 0
8,700 35,350 870.00 15 8,700
35,350 85,650 4,867.50 25 35,350
85,650 178,650 17,442.50 28 85,650
178,650 388,350 43,482.50 33 178,650
388,350 ....... 112,683.50 35 388,350



Tax Rates--Married Individuals Filing Joint and Surviving Spouses--2012

Taxable income: Tax:
Over But not over Tax +% On amount over

$ 0 $ 17,400 $ 0.00 10 $ 0
17,400 70,700 1,740.00 15 17,400
70,700 142,700 9,735.00 25 70,700
142,700 217,450 27,735.00 28 142,700
217,450 388,350 48,665.00 33 217,450
388,350 ....... 105,062.00 35 388,350


Tax Rates--Married Individuals Filing Separate--2012

Taxable income: Tax:
Over But not over Tax +% On amount over

$ 0 $ 8,700 $ 0.00 10 $ 0
8,700 35,350 870.00 15 8,700
35,350 71,350 4,867.50 25 35,350
71,350 108,725 13,867.50 28 71,350
108,725 194,175 24,332.50 33 108,725
194,175 ....... 52,531.00 35 194,175


Small Business Taxes & Management

 

[bigrebnc1775]

That doesn't answer my question, it was quite specific.

I will ask it again:

In your opinion, if in a given year someone makes $50 million dollars no matter if it's in regular income, capital gains, or a combination of the two, what should their tax bill be?

A single numerical answer will be sufficient.

false dilemma. you are not asking a question that can provide one, the incomes are different, you understand that right? cap gains and salaried income are not the same, period.

Thanks, Trajan, but I am fully aware of that.

The different types of income were purposely taken out of the equation because the poster I was asking the question to thinks that $7.5 million in taxes for someone who makes $50 million is "way too high".

I want to see what he thinks is a reasonable tax bill for that income regardless of how it is earned.

And let's face it, he's not capable to addressing it without that oversimplification.

I want to see what he thinks is a reasonable tax bill for that income regardless of how it is earned.

I told you 7.5 million is more than enough for one person to have to pay in taxes.

 

[Article 15]

false dilemma. you are not asking a question that can provide one, the incomes are different, you understand that right? cap gains and salaried income are not the same, period.

Thanks, Trajan, but I am fully aware of that.

The different types of income were purposely taken out of the equation because the poster I was asking the question to thinks that $7.5 million in taxes for someone who makes $50 million is "way too high".

I want to see what he thinks is a reasonable tax bill for that income regardless of how it is earned.

And let's face it, he's not capable to addressing it without that oversimplification.

I want to see what he thinks is a reasonable tax bill for that income regardless of how it is earned.

I told you 7.5 million is more than enough for one person to have to pay in taxes.

Earlier you said:

hell yes 7.5 million dollars is way to much

Last chance to post the number that you think should be paid in your opinion or I will just assume you are too chickenshit to answer.

I'm going to bed now and will check sometime later this weekend.

 

[Seawytch]

The problem is not whether Romney did anything illegal, which he didn't...but about the rules being fixed in his favor.

 

[PLYMCO_PILGRIM]

Why isn't 7.5 million dollars enough? damn with how much someone makes. If 7.5 million dollars isn't enough from one person something is terribly wrong with that picture.

So how much is enough? Since you want to say that there should be a fixed number that someone pays, whats the magic number? Let's hear this brilliant plan of yours.

Hell God only asked for 10%

Well romney donates almost 15% to his church so.....yeah...evil guy LOL

 

[RDD_1210]

The problem is not whether Romney did anything illegal, which he didn't...but about the rules being fixed in his favor.

Bingo.

 

[PLYMCO_PILGRIM]

Sorry, you can't switch back to percentages now. You said 7.5 million is enough to pay because its such a big number, but I pointed out that its a small percentage. So what's the fixed number that you think no one should exceed?

Way to twist it. hell yes 7.5 million dollars is way to much an income tax is way to much. but go a head twisted I just hope you don't hurt something the way your twisting.

In your opinion, if in a given year someone makes $50 million dollars no matter if it's in regular income, capital gains, or a combination of the two, what should their tax bill be?

A single numerical answer will be sufficient.

But it does depend on how they earned that income.

If they earned it through risk via investment in the stock market then it should be taxed at a set rate that is the same for everyone regardless of total investment income.

If you earned it working it should be a flat rate, no deductions or exemptions.

Say I got paid 50 million by my boss I think I should probably pay about 5 million in taxes
Say I got paid 50 thousand by my boss I think I should probably pay about 5 thousand in taxes

Say I invested money (which I was taxed on when earned initially be it from labor or investing) into other people's companies and profited 50 million I think I should have to pay about 7.5 million.
Say I invested money (which i was taxed on when earned initially be it from labor or investing) into other people's companies and profited 50 thousand I think I should have to pay about 7.5 thousand.

again no write offs, no exemptions.

 

[PLYMCO_PILGRIM]

SO, the spinners keep repeating how "Mitt Romney pays a lower tax rate than you do", but that is patently and deliberately misleading...

There has been tremendous hoopla regarding Mitt Romney’s income tax rate. His tax returns show that he paid something just less than 15 percent -- the capital gains tax rate. That makes sense. Most of his income was derived from dividends and capital gains. Further, Mitt gave a lot of money to charity, so he had deductions. Still, this seems a small percentage compared to the income taxes paid by many working-class Americans. Warren Buffett has famously proclaimed that he paid a lower tax rate than his secretary. Something must be wrong!

Both of these examples are used to support higher taxes favored by the political left. They are also oversimplifications that obscure the truth. The reason is that while ordinary income is taxed only once, at the personal level; capital gains are taxed twice, both at the personal level and at the corporate level.

Consider an individual, who owns a share of stock of a particular company. We’ll call this person Mitt. This means that Mitt owns a part of that company. In effect, he owns a share of the profit of the company. Let’s also say that this company has an employee. We’ll call him Barack. He represents the working class.

After all expenses but tax, the company has earned some amount of money. Let’s say that Mitt’s share of the pretax earnings is $1 (based on the fact that he owns one share of stock). There are two scenarios. First, the company could use the dollar to pay Barack additional compensation, the way that most working-class Americans derive their income. Alternatively, Mitt could receive the money as a dividend distribution.


Let’s look at how taxes play out under each scenario. -------->

Romney?s Tax Return: You?re Not Getting the Whole Story - International Business Times

its an extremely deceptive and dishonest claim.

I pay the same cap gains on investments that romney does.

I pay less income tax on labor income than romney would, if he made more than me from labor.

 

[bigrebnc1775]

Thanks, Trajan, but I am fully aware of that.

The different types of income were purposely taken out of the equation because the poster I was asking the question to thinks that $7.5 million in taxes for someone who makes $50 million is "way too high".

I want to see what he thinks is a reasonable tax bill for that income regardless of how it is earned.

And let's face it, he's not capable to addressing it without that oversimplification.

I told you 7.5 million is more than enough for one person to have to pay in taxes.

Earlier you said:

hell yes 7.5 million dollars is way to much

Last chance to post the number that you think should be paid in your opinion or I will just assume you are too chickenshit to answer.

I'm going to bed now and will check sometime later this weekend.

Don't let it get you down because I will not play your percentage game. talk about Republicans being greedy democrats should be happy with one person paying 7.5 million dollars but they aren't because they are greedy.

 

[Contumacious]

Romney paid 15 percent.

Obama on his 2010 tax returns paid around 25 percent.

Basic tax rate for MOST Americans is around 28 percent.

Still think Romney is a good idea?

I believe that it was the democrats and the "progressives" who implemented the Marxist graduated income tax!!!!!!!!!!!!!

 

[Trajan]

The problem is not whether Romney did anything illegal, which he didn't...but about the rules being fixed in his favor.

HIS favor? how about holier than thou blowhard warren buffett? he talks a good game but shelters every dime of income from whatever source or vehicle he can, stop being a slobbering partisan for a change.

 

[Valerie]

SO, the spinners keep repeating how "Mitt Romney pays a lower tax rate than you do", but that is patently and deliberately misleading...

There has been tremendous hoopla regarding Mitt Romney’s income tax rate. His tax returns show that he paid something just less than 15 percent -- the capital gains tax rate. That makes sense. Most of his income was derived from dividends and capital gains. Further, Mitt gave a lot of money to charity, so he had deductions. Still, this seems a small percentage compared to the income taxes paid by many working-class Americans. Warren Buffett has famously proclaimed that he paid a lower tax rate than his secretary. Something must be wrong!

Both of these examples are used to support higher taxes favored by the political left. They are also oversimplifications that obscure the truth. The reason is that while ordinary income is taxed only once, at the personal level; capital gains are taxed twice, both at the personal level and at the corporate level.

Consider an individual, who owns a share of stock of a particular company. We’ll call this person Mitt. This means that Mitt owns a part of that company. In effect, he owns a share of the profit of the company. Let’s also say that this company has an employee. We’ll call him Barack. He represents the working class.

After all expenses but tax, the company has earned some amount of money. Let’s say that Mitt’s share of the pretax earnings is $1 (based on the fact that he owns one share of stock). There are two scenarios. First, the company could use the dollar to pay Barack additional compensation, the way that most working-class Americans derive their income. Alternatively, Mitt could receive the money as a dividend distribution.


Let’s look at how taxes play out under each scenario. -------->

Romney?s Tax Return: You?re Not Getting the Whole Story - International Business Times

Mitten isn't the company. If he got paid $1 as a dividend his tax would be lower than if he got it as an employee.

That article is simply trying to muddy the waters.

btw, Mitten gets to write off MORE of his charitable donations than anyone in the middle class.

I didn't like the way that article used Mitt and Obama's names in their example either, because it does make it more confusing to comprehend the point, but the point still stands...


And yes most middle class tax payers are better off taking the standard deduction rather than itemizing their deductions. I think it's great Mitt has been such a productive citizen that he has contributed millions of dollars to charities...He deserves to deduct that cost from his taxable income...An income which was so significant that even after all of his deductions, he was still liable to pay two plus million more in taxes, last year alone...


Implying that an individual who earns say $60k a year is somehow paying more in taxes or that they are somehow deprived for being unable to deduct more charitable contributions, is just silly...

 

[Skull Pilot]

Can we finally put this specious argument to rest?

If the average income is 50K and we assume one is single with absolutely no deductions other than the 1 personal exemption here is the breakdown. Let's also assume a state tax rate of 6%

The breakdown annually of withholding is

FICA OASDI $2,100.00
FICA Medicare $725.00
Federal tax $8,100.00
State & local tax $3,000.00

Your federal income tax liability would be

6250

and that is 12.5%

Now you add rug rats and mortgage interest into the equation and the percentage drops even lower.

Are we done yet?