Businesses Taxed Too Much? Not Really…

[Butleroftwo]

I knew this was a gandalf post before I opened it.

[gandalf]

That doesn’t make sense, surveyor.

Most of what you say is just talking point crap.

It’s not my money. It’s not the democrats money. The money goes to fund our governments, local and federal, and the roads you drive on, the water you drink, the wars we fight (middle east anybody?), the police/fire crews, teachers who teach our children, parks they play in, etc… THEY ARE PAID FOR by our collective tax dollars.

You can argue about what government should and should not do. Personally, I don’t support fighting retarded wars in the middle east on behalf of oil companies. I see marginal benefit, and I think it’s waste of public resources that ignores larger energy sector issues and screws over my generation. (Thanks, Boomers.)

Regardless where the money goes…

Only clueless right-wing tools would argue that giant corporations like BP and Wal-Mart get to legally avoid and evade taxes while the rest of us carry the burden.

That whole Tea Party thing, basically, after you subtract Ron Paul (who I like), their entire value system is a fraud, front operation for the Republican Party.

Tax policy needs to be reformed. If the policy structure was made more even, loopholes closed, studies show you could lower overall tax rates and still collect as much revenue by reducing avoidance, which would stimulate the economy and ADD JOBS.

Rant on, tea baggers.

[gandalf]

That doesn’t make sense, surveyor.

Most of what you say is just talking point crap.

It’s not my money. It’s not the democrats money. The money goes to fund our governments, local and federal, and the roads you drive on, the water you drink, the wars we fight (middle east anybody?), the police/fire crews, teachers who teach our children, parks they play in, etc… THEY ARE PAID FOR by our collective tax dollars.

You can argue about what government should and should not do. Personally, I don’t support fighting retarded wars in the middle east on behalf of oil companies. I see marginal benefit, and I think it’s waste of public resources that ignores larger energy sector issues and screws over my generation. (Thanks, Boomers.)

Regardless where the money goes…

Only clueless right-wing tools would argue that giant corporations like BP and Wal-Mart get to legally avoid and evade taxes while the rest of us carry the burden.

That whole Tea Party thing, basically, after you subtract Ron Paul (who I like), their entire value system is a fraud, front operation for the Republican Party.

Tax policy needs to be reformed. If the policy structure was made more even, loopholes closed, studies show you could lower overall tax rates and still collect as much revenue by reducing avoidance, which would stimulate the economy and ADD JOBS.

Rant on, tea baggers.

[gandalf]

That doesn’t make sense, surveyor.

Most of what you say is just talking point crap.

It’s not my money. It’s not the democrats money. The money goes to fund our governments, local and federal, and the roads you drive on, the water you drink, the wars we fight (middle east anybody?), the police/fire crews, teachers who teach our children, parks they play in, etc… THEY ARE PAID FOR by our collective tax dollars.

You can argue about what government should and should not do. Personally, I don’t support fighting retarded wars in the middle east on behalf of oil companies. I see marginal benefit, and I think it’s waste of public resources that ignores larger energy sector issues and screws over my generation. (Thanks, Boomers.)

Regardless where the money goes…

Only clueless right-wing tools would argue that giant corporations like BP and Wal-Mart get to legally avoid and evade taxes while the rest of us carry the burden.

That whole Tea Party thing, basically, after you subtract Ron Paul (who I like), their entire value system is a fraud, front operation for the Republican Party.

Tax policy needs to be reformed. If the policy structure was made more even, loopholes closed, studies show you could lower overall tax rates and still collect as much revenue by reducing avoidance, which would stimulate the economy and ADD JOBS.

Rant on, tea baggers.

[gandalf]

That doesn’t make sense, surveyor.

Most of what you say is just talking point crap.

It’s not my money. It’s not the democrats money. The money goes to fund our governments, local and federal, and the roads you drive on, the water you drink, the wars we fight (middle east anybody?), the police/fire crews, teachers who teach our children, parks they play in, etc… THEY ARE PAID FOR by our collective tax dollars.

You can argue about what government should and should not do. Personally, I don’t support fighting retarded wars in the middle east on behalf of oil companies. I see marginal benefit, and I think it’s waste of public resources that ignores larger energy sector issues and screws over my generation. (Thanks, Boomers.)

Regardless where the money goes…

Only clueless right-wing tools would argue that giant corporations like BP and Wal-Mart get to legally avoid and evade taxes while the rest of us carry the burden.

That whole Tea Party thing, basically, after you subtract Ron Paul (who I like), their entire value system is a fraud, front operation for the Republican Party.

Tax policy needs to be reformed. If the policy structure was made more even, loopholes closed, studies show you could lower overall tax rates and still collect as much revenue by reducing avoidance, which would stimulate the economy and ADD JOBS.

Rant on, tea baggers.

[gandalf]

That doesn’t make sense, surveyor.

Most of what you say is just talking point crap.

It’s not my money. It’s not the democrats money. The money goes to fund our governments, local and federal, and the roads you drive on, the water you drink, the wars we fight (middle east anybody?), the police/fire crews, teachers who teach our children, parks they play in, etc… THEY ARE PAID FOR by our collective tax dollars.

You can argue about what government should and should not do. Personally, I don’t support fighting retarded wars in the middle east on behalf of oil companies. I see marginal benefit, and I think it’s waste of public resources that ignores larger energy sector issues and screws over my generation. (Thanks, Boomers.)

Regardless where the money goes…

Only clueless right-wing tools would argue that giant corporations like BP and Wal-Mart get to legally avoid and evade taxes while the rest of us carry the burden.

That whole Tea Party thing, basically, after you subtract Ron Paul (who I like), their entire value system is a fraud, front operation for the Republican Party.

Tax policy needs to be reformed. If the policy structure was made more even, loopholes closed, studies show you could lower overall tax rates and still collect as much revenue by reducing avoidance, which would stimulate the economy and ADD JOBS.

Rant on, tea baggers.

[lifeizfunhuh]

[quote=surveyor

See, that $2 trillion is not yours. You don’t have a right to it. It’s not the U.S. government’s. It’s theirs. And unless they see a way to create something with that money, they ain’t doing nothing with it, no matter how many loopholes you close or tax rates you raise.[/quote]

Surveyor,

As an individual on here who does my best to legally lower my tax bill, I agree with your sentiments. As an individual and a business owner (attorney), I hate every attempt by government to abscond my hard earned money. I agree that private individuals are (theoretically) far better equipped to spend the “profits” generated from business activity. Here is the problem: 1) A good accountant (I have one) can take anything that would by any fair estimation be a “profit” and transfer it, lend it, spend it, or invest it in such a way that the “profit” disappears. It’s the nature of an accounting system that taxes revenue – costs. Increase the “costs”, and the profit goes away. You can’t blame businesses or individuals from using the law to their advantage. Can you? (The Supreme Court says no).

The problem then is not with the businesses/individuals that legally pay little or not taxes. The problem is with the tax system. I think what gets everyone so upset is that the tax system is set up so that not all participants have equal access to tax lowering strategies. It is intentionally structured to favor wealthy individuals and corporations (that pay wealthy individuals in stock, dividends and capital gains). The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth). This is bad social policy because it artificially concentrates wealth to those at the top.

So I think if you boil it all down, the gripe is this: why does someone making 50k/year pay 30% taxes, while someone making millions pays 5% (estimates)? As JFK famously said: “to whom much is given, much is expected.”

As a caveat to all this, in a truly global economy where money moves across borders in the blink of an eye, there is nothing one country can do. If the U.S. makes their tax system more “fair”, some other country will accommodate, and money will flow to that other country. So basically, the rich will always oppress the poor. It has always been that way, and it always will be.

[lifeizfunhuh]

[quote=surveyor

See, that $2 trillion is not yours. You don’t have a right to it. It’s not the U.S. government’s. It’s theirs. And unless they see a way to create something with that money, they ain’t doing nothing with it, no matter how many loopholes you close or tax rates you raise.[/quote]

Surveyor,

As an individual on here who does my best to legally lower my tax bill, I agree with your sentiments. As an individual and a business owner (attorney), I hate every attempt by government to abscond my hard earned money. I agree that private individuals are (theoretically) far better equipped to spend the “profits” generated from business activity. Here is the problem: 1) A good accountant (I have one) can take anything that would by any fair estimation be a “profit” and transfer it, lend it, spend it, or invest it in such a way that the “profit” disappears. It’s the nature of an accounting system that taxes revenue – costs. Increase the “costs”, and the profit goes away. You can’t blame businesses or individuals from using the law to their advantage. Can you? (The Supreme Court says no).

The problem then is not with the businesses/individuals that legally pay little or not taxes. The problem is with the tax system. I think what gets everyone so upset is that the tax system is set up so that not all participants have equal access to tax lowering strategies. It is intentionally structured to favor wealthy individuals and corporations (that pay wealthy individuals in stock, dividends and capital gains). The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth). This is bad social policy because it artificially concentrates wealth to those at the top.

So I think if you boil it all down, the gripe is this: why does someone making 50k/year pay 30% taxes, while someone making millions pays 5% (estimates)? As JFK famously said: “to whom much is given, much is expected.”

As a caveat to all this, in a truly global economy where money moves across borders in the blink of an eye, there is nothing one country can do. If the U.S. makes their tax system more “fair”, some other country will accommodate, and money will flow to that other country. So basically, the rich will always oppress the poor. It has always been that way, and it always will be.

[lifeizfunhuh]

[quote=surveyor

See, that $2 trillion is not yours. You don’t have a right to it. It’s not the U.S. government’s. It’s theirs. And unless they see a way to create something with that money, they ain’t doing nothing with it, no matter how many loopholes you close or tax rates you raise.[/quote]

Surveyor,

As an individual on here who does my best to legally lower my tax bill, I agree with your sentiments. As an individual and a business owner (attorney), I hate every attempt by government to abscond my hard earned money. I agree that private individuals are (theoretically) far better equipped to spend the “profits” generated from business activity. Here is the problem: 1) A good accountant (I have one) can take anything that would by any fair estimation be a “profit” and transfer it, lend it, spend it, or invest it in such a way that the “profit” disappears. It’s the nature of an accounting system that taxes revenue – costs. Increase the “costs”, and the profit goes away. You can’t blame businesses or individuals from using the law to their advantage. Can you? (The Supreme Court says no).

The problem then is not with the businesses/individuals that legally pay little or not taxes. The problem is with the tax system. I think what gets everyone so upset is that the tax system is set up so that not all participants have equal access to tax lowering strategies. It is intentionally structured to favor wealthy individuals and corporations (that pay wealthy individuals in stock, dividends and capital gains). The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth). This is bad social policy because it artificially concentrates wealth to those at the top.

So I think if you boil it all down, the gripe is this: why does someone making 50k/year pay 30% taxes, while someone making millions pays 5% (estimates)? As JFK famously said: “to whom much is given, much is expected.”

As a caveat to all this, in a truly global economy where money moves across borders in the blink of an eye, there is nothing one country can do. If the U.S. makes their tax system more “fair”, some other country will accommodate, and money will flow to that other country. So basically, the rich will always oppress the poor. It has always been that way, and it always will be.

[lifeizfunhuh]

[quote=surveyor

See, that $2 trillion is not yours. You don’t have a right to it. It’s not the U.S. government’s. It’s theirs. And unless they see a way to create something with that money, they ain’t doing nothing with it, no matter how many loopholes you close or tax rates you raise.[/quote]

Surveyor,

As an individual on here who does my best to legally lower my tax bill, I agree with your sentiments. As an individual and a business owner (attorney), I hate every attempt by government to abscond my hard earned money. I agree that private individuals are (theoretically) far better equipped to spend the “profits” generated from business activity. Here is the problem: 1) A good accountant (I have one) can take anything that would by any fair estimation be a “profit” and transfer it, lend it, spend it, or invest it in such a way that the “profit” disappears. It’s the nature of an accounting system that taxes revenue – costs. Increase the “costs”, and the profit goes away. You can’t blame businesses or individuals from using the law to their advantage. Can you? (The Supreme Court says no).

The problem then is not with the businesses/individuals that legally pay little or not taxes. The problem is with the tax system. I think what gets everyone so upset is that the tax system is set up so that not all participants have equal access to tax lowering strategies. It is intentionally structured to favor wealthy individuals and corporations (that pay wealthy individuals in stock, dividends and capital gains). The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth). This is bad social policy because it artificially concentrates wealth to those at the top.

So I think if you boil it all down, the gripe is this: why does someone making 50k/year pay 30% taxes, while someone making millions pays 5% (estimates)? As JFK famously said: “to whom much is given, much is expected.”

As a caveat to all this, in a truly global economy where money moves across borders in the blink of an eye, there is nothing one country can do. If the U.S. makes their tax system more “fair”, some other country will accommodate, and money will flow to that other country. So basically, the rich will always oppress the poor. It has always been that way, and it always will be.

[lifeizfunhuh]

[quote=surveyor

See, that $2 trillion is not yours. You don’t have a right to it. It’s not the U.S. government’s. It’s theirs. And unless they see a way to create something with that money, they ain’t doing nothing with it, no matter how many loopholes you close or tax rates you raise.[/quote]

Surveyor,

As an individual on here who does my best to legally lower my tax bill, I agree with your sentiments. As an individual and a business owner (attorney), I hate every attempt by government to abscond my hard earned money. I agree that private individuals are (theoretically) far better equipped to spend the “profits” generated from business activity. Here is the problem: 1) A good accountant (I have one) can take anything that would by any fair estimation be a “profit” and transfer it, lend it, spend it, or invest it in such a way that the “profit” disappears. It’s the nature of an accounting system that taxes revenue – costs. Increase the “costs”, and the profit goes away. You can’t blame businesses or individuals from using the law to their advantage. Can you? (The Supreme Court says no).

The problem then is not with the businesses/individuals that legally pay little or not taxes. The problem is with the tax system. I think what gets everyone so upset is that the tax system is set up so that not all participants have equal access to tax lowering strategies. It is intentionally structured to favor wealthy individuals and corporations (that pay wealthy individuals in stock, dividends and capital gains). The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth). This is bad social policy because it artificially concentrates wealth to those at the top.

So I think if you boil it all down, the gripe is this: why does someone making 50k/year pay 30% taxes, while someone making millions pays 5% (estimates)? As JFK famously said: “to whom much is given, much is expected.”

As a caveat to all this, in a truly global economy where money moves across borders in the blink of an eye, there is nothing one country can do. If the U.S. makes their tax system more “fair”, some other country will accommodate, and money will flow to that other country. So basically, the rich will always oppress the poor. It has always been that way, and it always will be.

[ucodegen]

[quote lifeizfunhuh]The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth).[/quote] This is a falsehood. Take a look at your tax payments (total) from your 1040/540s. Now for comparison:
Regan during his governor days was paying more than $240,000/year in federal taxes. How many times your tax payment is that?(don’t have to tell me.. just calculate it).

The U.S. has a progressive tax schedule. Each additional dollar gets taxed at a higher percentage. If you have the 1040 instructional booklet, go to the back of the booklet… or try this link for the 2010 tables:
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Go to the last page. Lets take ‘single’ for example.
If you make up to $8,375/yr – you pay 10% federal taxes.
If you make between $8,375 and $34,000 – you pay between 10% and 13.8% in taxes (the first $8375 slid under the tax bar because the 15% applies to the amount over $8375) Plugging the brackets into handy-dandy Excel, gives:
Income, Tax, Total Percent
$5,000.00 $500.00 10.00%
$10,000.00 $1,081.25 10.81%
$15,000.00 $1,831.25 12.21%
$20,000.00 $2,581.25 12.91%
$25,000.00 $3,331.25 13.33%
$30,000.00 $4,081.25 13.60%
$35,000.00 $4,931.25 14.09%
$40,000.00 $6,181.25 15.45%
$50,000.00 $8,681.25 17.36%
$60,000.00 $11,181.25 18.64%
$70,000.00 $13,681.25 19.54%
$80,000.00 $16,181.25 20.23%
$90,000.00 $18,909.25 21.01%
$100,000.00 $21,709.25 21.71%
$110,000.00 $24,509.25 22.28%
$130,000.00 $30,109.25 23.16%
$150,000.00 $35,709.25 23.81%
$170,000.00 $41,309.25 24.30%
$190,000.00 $47,816.75 25.17%
$210,000.00 $54,416.75 25.91%
$230,000.00 $61,016.75 26.53%
$250,000.00 $67,616.75 27.05%
$300,000.00 $84,116.75 28.04%
$350,000.00 $100,616.75 28.75%
$400,000.00 $117,643.75 29.41%
$450,000.00 $135,143.75 30.03%
$500,000.00 $152,643.75 30.53%
$550,000.00 $170,143.75 30.94%
$600,000.00 $187,643.75 31.27%

There are also income based limits to deductions as well.
The truth is that about 20% or less of the population pays 80% or more of the taxes. This above table does not include SS tax or state taxes. Keep in mind that if you are earning more than $35k/yr after retirement – you actually lose a bit on Social Security.

While qualified dividends (US based companies) are not taxed – the company is generally taxed at 35% federal(statutory rate). As a common stockholder, you own the business – much like a partnership but with different liabilities (this means that the income sourced from dividends has already been taxed – at 35%). A partnership/LLCs income is generally ‘pass through’, taxed at the individual rate, which is often lower than the 35%. Dividends are not tax deductible from the aspect of the company.

Capital gains brackets for Long Term are 5%,10%,15%,20% depending upon income. (note: California treats long term and short term capital gains as standard income).
The only exception here is collectables(28%) and Real Estate(first $250k exempt on principle property (500k for married)). Personally, I don’t like the R.E. exemption because I feel it sponsors RE speculation – but also keep in mind that the U.S. government create inflation, which is part of the factor that drives up R.E. prices – and creates the R.E. capital gain.

Stock options are treated as income for tax purposes, unless held for 1 year after exercising the option. In that case the gain is split between income and capital gains. If restricted stock is granted – the difference between the strike price of the granted restricted stock and current market price is considered income (in money) and gain during holding period is considered capital gains. Above tables and rates apply.

[ucodegen]

[quote lifeizfunhuh]The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth).[/quote] This is a falsehood. Take a look at your tax payments (total) from your 1040/540s. Now for comparison:
Regan during his governor days was paying more than $240,000/year in federal taxes. How many times your tax payment is that?(don’t have to tell me.. just calculate it).

The U.S. has a progressive tax schedule. Each additional dollar gets taxed at a higher percentage. If you have the 1040 instructional booklet, go to the back of the booklet… or try this link for the 2010 tables:
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Go to the last page. Lets take ‘single’ for example.
If you make up to $8,375/yr – you pay 10% federal taxes.
If you make between $8,375 and $34,000 – you pay between 10% and 13.8% in taxes (the first $8375 slid under the tax bar because the 15% applies to the amount over $8375) Plugging the brackets into handy-dandy Excel, gives:
Income, Tax, Total Percent
$5,000.00 $500.00 10.00%
$10,000.00 $1,081.25 10.81%
$15,000.00 $1,831.25 12.21%
$20,000.00 $2,581.25 12.91%
$25,000.00 $3,331.25 13.33%
$30,000.00 $4,081.25 13.60%
$35,000.00 $4,931.25 14.09%
$40,000.00 $6,181.25 15.45%
$50,000.00 $8,681.25 17.36%
$60,000.00 $11,181.25 18.64%
$70,000.00 $13,681.25 19.54%
$80,000.00 $16,181.25 20.23%
$90,000.00 $18,909.25 21.01%
$100,000.00 $21,709.25 21.71%
$110,000.00 $24,509.25 22.28%
$130,000.00 $30,109.25 23.16%
$150,000.00 $35,709.25 23.81%
$170,000.00 $41,309.25 24.30%
$190,000.00 $47,816.75 25.17%
$210,000.00 $54,416.75 25.91%
$230,000.00 $61,016.75 26.53%
$250,000.00 $67,616.75 27.05%
$300,000.00 $84,116.75 28.04%
$350,000.00 $100,616.75 28.75%
$400,000.00 $117,643.75 29.41%
$450,000.00 $135,143.75 30.03%
$500,000.00 $152,643.75 30.53%
$550,000.00 $170,143.75 30.94%
$600,000.00 $187,643.75 31.27%

There are also income based limits to deductions as well.
The truth is that about 20% or less of the population pays 80% or more of the taxes. This above table does not include SS tax or state taxes. Keep in mind that if you are earning more than $35k/yr after retirement – you actually lose a bit on Social Security.

While qualified dividends (US based companies) are not taxed – the company is generally taxed at 35% federal(statutory rate). As a common stockholder, you own the business – much like a partnership but with different liabilities (this means that the income sourced from dividends has already been taxed – at 35%). A partnership/LLCs income is generally ‘pass through’, taxed at the individual rate, which is often lower than the 35%. Dividends are not tax deductible from the aspect of the company.

Capital gains brackets for Long Term are 5%,10%,15%,20% depending upon income. (note: California treats long term and short term capital gains as standard income).
The only exception here is collectables(28%) and Real Estate(first $250k exempt on principle property (500k for married)). Personally, I don’t like the R.E. exemption because I feel it sponsors RE speculation – but also keep in mind that the U.S. government create inflation, which is part of the factor that drives up R.E. prices – and creates the R.E. capital gain.

Stock options are treated as income for tax purposes, unless held for 1 year after exercising the option. In that case the gain is split between income and capital gains. If restricted stock is granted – the difference between the strike price of the granted restricted stock and current market price is considered income (in money) and gain during holding period is considered capital gains. Above tables and rates apply.

[ucodegen]

[quote lifeizfunhuh]The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth).[/quote] This is a falsehood. Take a look at your tax payments (total) from your 1040/540s. Now for comparison:
Regan during his governor days was paying more than $240,000/year in federal taxes. How many times your tax payment is that?(don’t have to tell me.. just calculate it).

The U.S. has a progressive tax schedule. Each additional dollar gets taxed at a higher percentage. If you have the 1040 instructional booklet, go to the back of the booklet… or try this link for the 2010 tables:
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Go to the last page. Lets take ‘single’ for example.
If you make up to $8,375/yr – you pay 10% federal taxes.
If you make between $8,375 and $34,000 – you pay between 10% and 13.8% in taxes (the first $8375 slid under the tax bar because the 15% applies to the amount over $8375) Plugging the brackets into handy-dandy Excel, gives:
Income, Tax, Total Percent
$5,000.00 $500.00 10.00%
$10,000.00 $1,081.25 10.81%
$15,000.00 $1,831.25 12.21%
$20,000.00 $2,581.25 12.91%
$25,000.00 $3,331.25 13.33%
$30,000.00 $4,081.25 13.60%
$35,000.00 $4,931.25 14.09%
$40,000.00 $6,181.25 15.45%
$50,000.00 $8,681.25 17.36%
$60,000.00 $11,181.25 18.64%
$70,000.00 $13,681.25 19.54%
$80,000.00 $16,181.25 20.23%
$90,000.00 $18,909.25 21.01%
$100,000.00 $21,709.25 21.71%
$110,000.00 $24,509.25 22.28%
$130,000.00 $30,109.25 23.16%
$150,000.00 $35,709.25 23.81%
$170,000.00 $41,309.25 24.30%
$190,000.00 $47,816.75 25.17%
$210,000.00 $54,416.75 25.91%
$230,000.00 $61,016.75 26.53%
$250,000.00 $67,616.75 27.05%
$300,000.00 $84,116.75 28.04%
$350,000.00 $100,616.75 28.75%
$400,000.00 $117,643.75 29.41%
$450,000.00 $135,143.75 30.03%
$500,000.00 $152,643.75 30.53%
$550,000.00 $170,143.75 30.94%
$600,000.00 $187,643.75 31.27%

There are also income based limits to deductions as well.
The truth is that about 20% or less of the population pays 80% or more of the taxes. This above table does not include SS tax or state taxes. Keep in mind that if you are earning more than $35k/yr after retirement – you actually lose a bit on Social Security.

While qualified dividends (US based companies) are not taxed – the company is generally taxed at 35% federal(statutory rate). As a common stockholder, you own the business – much like a partnership but with different liabilities (this means that the income sourced from dividends has already been taxed – at 35%). A partnership/LLCs income is generally ‘pass through’, taxed at the individual rate, which is often lower than the 35%. Dividends are not tax deductible from the aspect of the company.

Capital gains brackets for Long Term are 5%,10%,15%,20% depending upon income. (note: California treats long term and short term capital gains as standard income).
The only exception here is collectables(28%) and Real Estate(first $250k exempt on principle property (500k for married)). Personally, I don’t like the R.E. exemption because I feel it sponsors RE speculation – but also keep in mind that the U.S. government create inflation, which is part of the factor that drives up R.E. prices – and creates the R.E. capital gain.

Stock options are treated as income for tax purposes, unless held for 1 year after exercising the option. In that case the gain is split between income and capital gains. If restricted stock is granted – the difference between the strike price of the granted restricted stock and current market price is considered income (in money) and gain during holding period is considered capital gains. Above tables and rates apply.

[ucodegen]

[quote lifeizfunhuh]The thing that (rightfully) pisses people off is that the brunt of our nation’s tax revenue is generated by the bottom 80% of citizens who take home about 40% of income (and control a far lesser portion of wealth).[/quote] This is a falsehood. Take a look at your tax payments (total) from your 1040/540s. Now for comparison:
Regan during his governor days was paying more than $240,000/year in federal taxes. How many times your tax payment is that?(don’t have to tell me.. just calculate it).

The U.S. has a progressive tax schedule. Each additional dollar gets taxed at a higher percentage. If you have the 1040 instructional booklet, go to the back of the booklet… or try this link for the 2010 tables:
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Go to the last page. Lets take ‘single’ for example.
If you make up to $8,375/yr – you pay 10% federal taxes.
If you make between $8,375 and $34,000 – you pay between 10% and 13.8% in taxes (the first $8375 slid under the tax bar because the 15% applies to the amount over $8375) Plugging the brackets into handy-dandy Excel, gives:
Income, Tax, Total Percent
$5,000.00 $500.00 10.00%
$10,000.00 $1,081.25 10.81%
$15,000.00 $1,831.25 12.21%
$20,000.00 $2,581.25 12.91%
$25,000.00 $3,331.25 13.33%
$30,000.00 $4,081.25 13.60%
$35,000.00 $4,931.25 14.09%
$40,000.00 $6,181.25 15.45%
$50,000.00 $8,681.25 17.36%
$60,000.00 $11,181.25 18.64%
$70,000.00 $13,681.25 19.54%
$80,000.00 $16,181.25 20.23%
$90,000.00 $18,909.25 21.01%
$100,000.00 $21,709.25 21.71%
$110,000.00 $24,509.25 22.28%
$130,000.00 $30,109.25 23.16%
$150,000.00 $35,709.25 23.81%
$170,000.00 $41,309.25 24.30%
$190,000.00 $47,816.75 25.17%
$210,000.00 $54,416.75 25.91%
$230,000.00 $61,016.75 26.53%
$250,000.00 $67,616.75 27.05%
$300,000.00 $84,116.75 28.04%
$350,000.00 $100,616.75 28.75%
$400,000.00 $117,643.75 29.41%
$450,000.00 $135,143.75 30.03%
$500,000.00 $152,643.75 30.53%
$550,000.00 $170,143.75 30.94%
$600,000.00 $187,643.75 31.27%

There are also income based limits to deductions as well.
The truth is that about 20% or less of the population pays 80% or more of the taxes. This above table does not include SS tax or state taxes. Keep in mind that if you are earning more than $35k/yr after retirement – you actually lose a bit on Social Security.

While qualified dividends (US based companies) are not taxed – the company is generally taxed at 35% federal(statutory rate). As a common stockholder, you own the business – much like a partnership but with different liabilities (this means that the income sourced from dividends has already been taxed – at 35%). A partnership/LLCs income is generally ‘pass through’, taxed at the individual rate, which is often lower than the 35%. Dividends are not tax deductible from the aspect of the company.

Capital gains brackets for Long Term are 5%,10%,15%,20% depending upon income. (note: California treats long term and short term capital gains as standard income).
The only exception here is collectables(28%) and Real Estate(first $250k exempt on principle property (500k for married)). Personally, I don’t like the R.E. exemption because I feel it sponsors RE speculation – but also keep in mind that the U.S. government create inflation, which is part of the factor that drives up R.E. prices – and creates the R.E. capital gain.

Stock options are treated as income for tax purposes, unless held for 1 year after exercising the option. In that case the gain is split between income and capital gains. If restricted stock is granted – the difference between the strike price of the granted restricted stock and current market price is considered income (in money) and gain during holding period is considered capital gains. Above tables and rates apply.

[Author]

Posts