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(New York Daily News)   DeBlasio announces grants for the city's fashion industry, which is barely hanging on at $11 billion a year. Corporate welfare - it's okay when progressives do it   (nydailynews.com) divider line 86
    More: Asinine, Blasio, City Council Speaker Christine Quinn, DeBlasio, fashions, corporate welfare, Chirlane McCray, concessions  
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386 clicks; posted to Politics » on 07 Feb 2014 at 8:24 AM (32 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-02-07 11:58:18 AM

DarwiOdrade: I see OligarchDefenderBot is here to be wrong about everything again.


Is there some sort of macro in the minds of farklibs that confuses "right" with "wrong"?

I'm correct in every thread.
 
2014-02-07 12:12:51 PM

Debeo Summa Credo: It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.


I'm gonna lump these three posts together, because they all have the same response.

No, they are not income taxes on the same income. When a corporation is started, the founders decide they want to enjoy the limited liability and other benefits of a corporation, so they found a separate legal entity to function as the business instead of simply being them directly controlling it in every way. Since it's a separate entity, the transactions of income going into the corporation and that income paying dividends to shareholders are two separate transactions to two separate parties. It's a share of the profits being paid out, but it's a separate transaction.

It's like complaining that personal income tax and corporate income tax are double taxation because the corporation's profits are used to pay employees. Or that personal income tax and sales tax are double taxation because the person's income is used to pay for goods. It's a lot of whining from the well-heeled wanting all of the benefits of having a corporation (a separate legal entity with limited liability) but none of the responsibilities (it being a  separate legal entity).

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

And? My point was that taxation on all three levels has methods to ameliorate that taxation so all income is not taxed in full at all three levels.

Debeo Summa Credo: Is there some sort of macro in the minds of farklibs that confuses "right" with "wrong"?

I'm correct in every thread.


Not gonna lie, I snortlaughed at that. Want to get back into the argument about "disincentivizing work," where you ignored every single thing I said during your epic whinefest?
 
2014-02-07 12:29:12 PM
It always seems to come back to those g.d. horses for certain folks. It's mind-blowing how much importance conservatives are putting on those walking shiatbag tourist traps.
 
2014-02-07 12:33:46 PM

Bloody William: Debeo Summa Credo: It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.

I'm gonna lump these three posts together, because they all have the same response.

No, they are not income taxes on the same income. When a corporation is started, the founders decide they want to enjoy the limited liability and other benefits of a corporation, so they found a separate legal entity to function as the business instead of simply being them directly controlling it in every way. Since it's a separate entity, the transactions of income going into the corporation and that income paying dividends to shareholders are two separate transactions to two separate parties. It's a share of the profits being paid out, but it's a separate transaction.

It's like complaining that personal income tax and corporate income tax are double taxation because the corporation's profits are used to pay employees.


No.  Now I see where you are confused.   When a corporation pays an employee, the employee is taxed on the income but the corporation deducts that expense in arriving at their taxable income.  So a corporation has $100 in revenue and $50 in raw materials expenses and pays employees $30, it pays tax on the remaining $20 (it deducts its costs in arriving at taxable income), and the employees are taxed on the $30.  That $30 is only taxed once, at the employee level.

If the corporation then pays $10 to shareholders, the shareholders pay tax, but the corporation doesn't get to deduct that dividend from income.   So that $10 is taxed at both the shareholder level, and the corporate level.  Hence 'double' taxation exists with dividends, but not in your employee example.

You can argue that an extra level of tax at the corporate level is an appropriate quid pro quo for limited liability (although there is not and never has been any sort of legal connection between limited liability and corporate taxation), but don't try to argue that there isn't an extra level of tax.
 
2014-02-07 12:39:22 PM
Deblasio is a dog of the Clinton's and not progressive in any sense.
 
2014-02-07 12:41:48 PM

Bloody William: Debeo Summa Credo: Is there some sort of macro in the minds of farklibs that confuses "right" with "wrong"?

I'm correct in every thread.


Not gonna lie, I snortlaughed at that. Want to get back into the argument about "disincentivizing work," where you ignored every single thing I said during your epic whinefest


Not really.  I'm sorry I didn't respond to your posts, I thought I had.  In my defense, there were an awful lot of idiots I had to respond to there!

Here's a link to the economist, which is pro-obamacare, that discusses why 2.5m being disincentivized to work is bad (a 'serious problem' in their words).  You can read it and realize that you can still be pro-ACA while acknowledging its downsides or stick to your blindly partisan defense of all things obamacare.

http://www.economist.com/blogs/freeexchange/2014/02/more-obamacare-a nd -employment
 
2014-02-07 12:47:20 PM

Debeo Summa Credo: No.  Now I see where you are confused.   When a corporation pays an employee, the employee is taxed on the income but the corporation deducts that expense in arriving at their taxable income.  So a corporation has $100 in revenue and $50 in raw materials expenses and pays employees $30, it pays tax on the remaining $20 (it deducts its costs in arriving at taxable income), and the employees are taxed on the $30.  That $30 is only taxed once, at the employee level.

If the corporation then pays $10 to shareholders, the shareholders pay tax, but the corporation doesn't get to deduct that dividend from income.   So that $10 is taxed at both the shareholder level, and the corporate level.  Hence 'double' taxation exists with dividends, but not in your employee example.

You can argue that an extra level of tax at the corporate level is an appropriate quid pro quo for limited liability (although there is not and never has been any sort of legal connection between limited liability and corporate taxation), but don't try to argue that there isn't an extra level of tax.


I'll argue it's an appropriate level of quid pro quo simply because the shareholders and the corporation itself are completely different entities. The shareholders own stakes in the corporation, but they are NOT the corporation. It's not money going into the corporation that's taxed twice within the corporation's assets. One is going in, one is going out. Now, if you want to argue that dividends should also be deductions, go ahead.

I'm not going to shed tears because the people receiving money for their investments and otherwise doing nothing (how's that dignity of work, by the way?) are getting taxed just as the corporation from which they benefit is getting taxed. Their taxes are only "the highest in decades" if you 1: define decades only as halfway through the Reagan years onwards... and ignore the Clinton years and 2: perform that bullshiat number juggling of combining corporate income taxes and dividends and 3: ignore the incredibly low capital gains tax rates we have in comparison to actual income tax, the rate which most americans pay for their income.
 
2014-02-07 12:48:25 PM

Debeo Summa Credo: Bloody William: Debeo Summa Credo: Is there some sort of macro in the minds of farklibs that confuses "right" with "wrong"?

I'm correct in every thread.


Not gonna lie, I snortlaughed at that. Want to get back into the argument about "disincentivizing work," where you ignored every single thing I said during your epic whinefest

Not really.  I'm sorry I didn't respond to your posts, I thought I had.  In my defense, there were an awful lot of idiots I had to respond to there!

Here's a link to the economist, which is pro-obamacare, that discusses why 2.5m being disincentivized to work is bad (a 'serious problem' in their words).  You can read it and realize that you can still be pro-ACA while acknowledging its downsides or stick to your blindly partisan defense of all things obamacare.

http://www.economist.com/blogs/freeexchange/2014/02/more-obamacare-a nd -employment


I'm not gonna threadjack to continue this particular discussion. Instead, I'll repeat myself in the next inevitable Obamacare "job loss" thread.
 
2014-02-07 12:56:09 PM

Bloody William: Debeo Summa Credo: No.  Now I see where you are confused.   When a corporation pays an employee, the employee is taxed on the income but the corporation deducts that expense in arriving at their taxable income.  So a corporation has $100 in revenue and $50 in raw materials expenses and pays employees $30, it pays tax on the remaining $20 (it deducts its costs in arriving at taxable income), and the employees are taxed on the $30.  That $30 is only taxed once, at the employee level.

If the corporation then pays $10 to shareholders, the shareholders pay tax, but the corporation doesn't get to deduct that dividend from income.   So that $10 is taxed at both the shareholder level, and the corporate level.  Hence 'double' taxation exists with dividends, but not in your employee example.

You can argue that an extra level of tax at the corporate level is an appropriate quid pro quo for limited liability (although there is not and never has been any sort of legal connection between limited liability and corporate taxation), but don't try to argue that there isn't an extra level of tax.

I'll argue it's an appropriate level of quid pro quo simply because the shareholders and the corporation itself are completely different entities. The shareholders own stakes in the corporation, but they are NOT the corporation. It's not money going into the corporation that's taxed twice within the corporation's assets. One is going in, one is going out. Now, if you want to argue that dividends should also be deductions, go ahead.

I'm not going to shed tears because the people receiving money for their investments and otherwise doing nothing (how's that dignity of work, by the way?) are getting taxed just as the corporation from which they benefit is getting taxed. Their taxes are only "the highest in decades" if you 1: define decades only as halfway through the Reagan years onwards... and ignore the Clinton years and 2: perform that bullshiat number juggling of combining corporate incom ...


Okay, let me ask you this:

What portion of corporate income should be taken in total income taxes, and what portion should be left to go into the pockets of the owners of the corporation?   Let's make an assumption that the shareholders are all in the highest tax bracket.

There is no wrong answer, just looking for your view on the appropriate level of taxation of corporate income.
 
2014-02-07 01:02:05 PM

Debeo Summa Credo: Bloody William: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Unless you count how we tax any of the ways the wealthy actually make more money over a certain point. Want to compare capital gains to income taxes?

Want to compare corporate income taxes + dividend taxes to ordinary taxes?

No, because you brought up "the wealthy." I didn't say anything about corporations except note that the wealthy tend to make most of their money from investments.

Also, after 30 seconds of searching... qualified dividends are taxed at the same rate as capital gains, at a maximum of 20%. corporate income tax rates vary from 15% to 35%, similar to personal income tax but obviously with a much higher set of income tiers ($18.3 million per year is the maximum 35% tax rate). And before you bring up state/local corporate income taxes, those are deductible from federal taxes.

And why would we combine those two types of taxes to do anything other than muddy the discussion? And before you talk about "income being taxed twice" or wherever you were going with that, I'm letting you know I'd point out the many, many different kinds of taxes and fees that could be described as "taxing income twice," and that it's a disingenuous argument to isolate those two examples just to try to finagle some slightly higher numbers than the ones I was presenting.

It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.


Congrats on mixing marginal rates with effective tax rates.

Your argument is entirely theoretical, as there is little to prevent the intended dividend yield to be paid out pretax as part of SGA expenses.
 
2014-02-07 01:05:27 PM

Debeo Summa Credo: Okay, let me ask you this:

What portion of corporate income should be taken in total income taxes, and what portion should be left to go into the pockets of the owners of the corporation?   Let's make an assumption that the shareholders are all in the highest tax bracket.

There is no wrong answer, just looking for your view on the appropriate level of taxation of corporate income.


I don't know. With no consideration for the numbers in question, I'd say "fair" would be... 50% to 70%? Possibly with an aggressively tiered progressive rate for dividends for smaller investors.

The owners in question, quite simply, can afford to pay much more than the poor and middle class. I'm not saying bleed the rich dry. I'm saying stop bleeding the poor and middle class dry, because they are the ones whose income is primarily tied up in "food," "rent," "mortgages," "utilities," and "paying down debts."

If you taxed the wealthy at the same amount that the middle class pay for necessities, the wealthy would still have magnitudes more money to pay for whatever they want in their lives than the middle class would.
 
2014-02-07 01:09:20 PM
State corporate income taxes are no more than 10%,marginal.

Effective would be lower.

50% effective tax bite? Nope, not a chance.
 
2014-02-07 01:11:30 PM

dumbobruni: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Unless you count how we tax any of the ways the wealthy actually make more money over a certain point. Want to compare capital gains to income taxes?

Want to compare corporate income taxes + dividend taxes to ordinary taxes?

No, because you brought up "the wealthy." I didn't say anything about corporations except note that the wealthy tend to make most of their money from investments.

Also, after 30 seconds of searching... qualified dividends are taxed at the same rate as capital gains, at a maximum of 20%. corporate income tax rates vary from 15% to 35%, similar to personal income tax but obviously with a much higher set of income tiers ($18.3 million per year is the maximum 35% tax rate). And before you bring up state/local corporate income taxes, those are deductible from federal taxes.

And why would we combine those two types of taxes to do anything other than muddy the discussion? And before you talk about "income being taxed twice" or wherever you were going with that, I'm letting you know I'd point out the many, many different kinds of taxes and fees that could be described as "taxing income twice," and that it's a disingenuous argument to isolate those two examples just to try to finagle some slightly higher numbers than the ones I was presenting.

It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.

Congrats on mixing marginal rates with effective tax rates.

Your argument is entirely theoretical, as there is little to prevent the intended dividend yield to be paid out pretax as part of SGA expenses.


Except for of course tax law which doesnt treat dividends as reductions to taxable income and accounting standards which don't allow dividends to be included in SG&a. Other than that, yeah nothing.
 
2014-02-07 01:18:29 PM

Bloody William: Debeo Summa Credo: Okay, let me ask you this:

What portion of corporate income should be taken in total income taxes, and what portion should be left to go into the pockets of the owners of the corporation?   Let's make an assumption that the shareholders are all in the highest tax bracket.

There is no wrong answer, just looking for your view on the appropriate level of taxation of corporate income.

I don't know. With no consideration for the numbers in question, I'd say "fair" would be... 50% to 70%? Possibly with an aggressively tiered progressive rate for dividends for smaller investors.

The owners in question, quite simply, can afford to pay much more than the poor and middle class. I'm not saying bleed the rich dry. I'm saying stop bleeding the poor and middle class dry, because they are the ones whose income is primarily tied up in "food," "rent," "mortgages," "utilities," and "paying down debts."

If you taxed the wealthy at the same amount that the middle class pay for necessities, the wealthy would still have magnitudes more money to pay for whatever they want in their lives than the middle class would.


The Tax code is already very progressive for dividends and capital gains.

Want to help the middle class and the poor? Stop looking at the income tax, and instead cut the sales tax while bringing back the luxury tax (Bush Sr)

And nuke the mortgage deduction from orbit.
 
2014-02-07 01:23:36 PM

Debeo Summa Credo: dumbobruni: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Unless you count how we tax any of the ways the wealthy actually make more money over a certain point. Want to compare capital gains to income taxes?

Want to compare corporate income taxes + dividend taxes to ordinary taxes?

No, because you brought up "the wealthy." I didn't say anything about corporations except note that the wealthy tend to make most of their money from investments.

Also, after 30 seconds of searching... qualified dividends are taxed at the same rate as capital gains, at a maximum of 20%. corporate income tax rates vary from 15% to 35%, similar to personal income tax but obviously with a much higher set of income tiers ($18.3 million per year is the maximum 35% tax rate). And before you bring up state/local corporate income taxes, those are deductible from federal taxes.

And why would we combine those two types of taxes to do anything other than muddy the discussion? And before you talk about "income being taxed twice" or wherever you were going with that, I'm letting you know I'd point out the many, many different kinds of taxes and fees that could be described as "taxing income twice," and that it's a disingenuous argument to isolate those two examples just to try to finagle some slightly higher numbers than the ones I was presenting.

It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.

Congrats on mixing marginal rates with effective tax rates.

Your argument is entirely theoretical, as there is little to prevent the intended dividend yield to be paid out pretax as part of SGA expenses.

Except for of course tax law which doesnt treat dividends as reductions to taxable income and accounting standards which don't allow dividends to be included in SG&a. Other than that, yeah nothing.


Business owners, including mom & pop llcs, don't put themselves on the payroll and instead only take dividends?

What planet are you on?
 
2014-02-07 01:27:29 PM
Eishower Warned us
"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military gay-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist."
 
2014-02-07 01:31:17 PM
Amazon has very tiny profits, but has massive cash flow. Much of its income is hit by non cash charges, including $1 billion/quarter in stock compensation for employees (who are also shareholders).

It returns money to shareholders through stock buybacks, which are not taxed.

And Amazon barely pays corporate taxes.

But according to DBS, that doesn't happen.
 
2014-02-07 01:34:42 PM

dumbobruni: Debeo Summa Credo: dumbobruni: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Unless you count how we tax any of the ways the wealthy actually make more money over a certain point. Want to compare capital gains to income taxes?

Want to compare corporate income taxes + dividend taxes to ordinary taxes?

No, because you brought up "the wealthy." I didn't say anything about corporations except note that the wealthy tend to make most of their money from investments.

Also, after 30 seconds of searching... qualified dividends are taxed at the same rate as capital gains, at a maximum of 20%. corporate income tax rates vary from 15% to 35%, similar to personal income tax but obviously with a much higher set of income tiers ($18.3 million per year is the maximum 35% tax rate). And before you bring up state/local corporate income taxes, those are deductible from federal taxes.

And why would we combine those two types of taxes to do anything other than muddy the discussion? And before you talk about "income being taxed twice" or wherever you were going with that, I'm letting you know I'd point out the many, many different kinds of taxes and fees that could be described as "taxing income twice," and that it's a disingenuous argument to isolate those two examples just to try to finagle some slightly higher numbers than the ones I was presenting.

It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.

Congrats on mixing marginal rates with effective tax rates.

Your argument is entirely theoretical, as there is little to prevent the intended dividend yield to be paid out pretax as part of SGA expenses.

Except for of course tax law which doesnt treat dividends as reductions to taxable income and accounting standards which don't allow dividends to be included in SG&a. Other than that, yeah nothing.

Business owners, including mom & pop llcs, don't put themselves on the payroll and instead only take dividends?

What planet are you on?


And when they do that they pay ordinary rates on the income, so it shouldn't bother those people who complain about supposedly unfairly low rates on investment income.
 
2014-02-07 01:41:45 PM

Debeo Summa Credo: dumbobruni: Debeo Summa Credo: dumbobruni: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Unless you count how we tax any of the ways the wealthy actually make more money over a certain point. Want to compare capital gains to income taxes?

Want to compare corporate income taxes + dividend taxes to ordinary taxes?

No, because you brought up "the wealthy." I didn't say anything about corporations except note that the wealthy tend to make most of their money from investments.

Also, after 30 seconds of searching... qualified dividends are taxed at the same rate as capital gains, at a maximum of 20%. corporate income tax rates vary from 15% to 35%, similar to personal income tax but obviously with a much higher set of income tiers ($18.3 million per year is the maximum 35% tax rate). And before you bring up state/local corporate income taxes, those are deductible from federal taxes.

And why would we combine those two types of taxes to do anything other than muddy the discussion? And before you talk about "income being taxed twice" or wherever you were going with that, I'm letting you know I'd point out the many, many different kinds of taxes and fees that could be described as "taxing income twice," and that it's a disingenuous argument to isolate those two examples just to try to finagle some slightly higher numbers than the ones I was presenting.

It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.

Congrats on mixing marginal rates with effective tax rates.

Your argument is entirely theoretical, as there is little to prevent the intended dividend yield to be paid out pretax as part of SGA expenses.

Except for of course tax law which doesnt treat dividends as reductions to taxable income and accounting standards which don't allow dividends to be included in SG&a. Other than that, yeah nothing.

Business owners, including mom & pop llcs, don't put themselves on the payroll and instead only take dividends?

What planet are you on?

And when they do that they pay ordinary rates on the income, so it shouldn't bother those people who complain about supposedly unfairly low rates on investment income.


All dividends are investment income, but all investment gains are not dividends.

Capital gains are the meat of the low rates debate, which you have been skewered with (and then refused to respond) many times over on Fark
 
2014-02-07 01:51:34 PM

dumbobruni: Debeo Summa Credo: dumbobruni: Debeo Summa Credo: dumbobruni: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Bloody William: Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Unless you count how we tax any of the ways the wealthy actually make more money over a certain point. Want to compare capital gains to income taxes?

Want to compare corporate income taxes + dividend taxes to ordinary taxes?

No, because you brought up "the wealthy." I didn't say anything about corporations except note that the wealthy tend to make most of their money from investments.

Also, after 30 seconds of searching... qualified dividends are taxed at the same rate as capital gains, at a maximum of 20%. corporate income tax rates vary from 15% to 35%, similar to personal income tax but obviously with a much higher set of income tiers ($18.3 million per year is the maximum 35% tax rate). And before you bring up state/local corporate income taxes, those are deductible from federal taxes.

And why would we combine those two types of taxes to do anything other than muddy the discussion? And before you talk about "income being taxed twice" or wherever you were going with that, I'm letting you know I'd point out the many, many different kinds of taxes and fees that could be described as "taxing income twice," and that it's a disingenuous argument to isolate those two examples just to try to finagle some slightly higher numbers than the ones I was presenting.

It's not disingenuous at all. Both of those are income taxes on the same income.

100 rich people start a corporation and the income from that corporation is taxed at 35% (effective rates lower, say 25%). Then when the income of that corporation is distributed to the 100 rich people (by rich I mean their other income already gets them into the top rate) their marginal federal rate is 23.9% (including the 3.9% obamacare tax on investment income) which means that the total federal take is about 43%, not including state or local taxes.

And "deductible" doesn't mean "credit". So if the person is taxed $100 state it doesn't reduce their federal tax liability by $100, but their taxable income is reduced. Assuming the $100 in state taxes was fully deductible (ignoring phase outs and limits that reduce deductibility), the reduction in federal taxes in the above scenario would be only $23.90.

When you consider the two bites at the apple that government has at corporate income, depending on jurisdiction you can end up with less than 50% of pretax corporate income ending up in the pockets of the corporations owners, with a total income tax take of over 50%. THATs the rate you should be comparing to ordinary tax rates.

Congrats on mixing marginal rates with effective tax rates.

Your argument is entirely theoretical, as there is little to prevent the intended dividend yield to be paid out pretax as part of SGA expenses.

Except for of course tax law which doesnt treat dividends as reductions to taxable income and accounting standards which don't allow dividends to be included in SG&a. Other than that, yeah nothing.

Business owners, including mom & pop llcs, don't put themselves on the payroll and instead only take dividends?

What planet are you on?

And when they do that they pay ordinary rates on the income, so it shouldn't bother those people who complain about supposedly unfairly low rates on investment income.

All dividends are investment income, but all investment gains are not dividends.

Capital gains are the meat of the low rates debate, which you have been skewered with (and then refused to respond) many times over on Fark


The impact of double taxation is easier to conceptualize when discussing dividends.

Of course, capital gains are essentially the present value of future after tax income, so the double tax argument still applies.

It's just harder for novices to get their heads around. They'll say "omg twitter hasn't earned a dime so they haven't paid corp taxes but if you sell it for more than you bought it you get cap gains income", not realizing that a) cap gains rates apply only for long investments held for more than one year, and b) the stock price reflects the markets expectation of future after tax income. Corporate taxes are already reflected in the current stock price and therefore capital gains.
 
2014-02-07 02:07:28 PM
I don't understand how this can keep happening and yet progressives keeeep onnnn fallllling forrrr ittttt.

Politicians hate you. It's redundant to say. But are you going to create alternatives? No, no, let's just complain and then vote and then complain some more, because it lets you claim the moral high ground without actually having to do any work.
 
2014-02-07 02:38:17 PM

Debeo Summa Credo: Really? We have some of the highest taxes on the wealthy we've had in decades.

Or maybe you are talking about taxes on the working and middle class, which have been cut.


?
?!
?!?!?!?!?!?!
 
2014-02-07 02:58:29 PM
everystockphoto.s3.amazonaws.com
 
2014-02-07 03:10:47 PM

Rhaab:


Exactly!!! Thank you for posting.

Count how many times the plumbing business' income is taxed before the owner can spend it on personal items,and how many times the shop's income is taxed before the owner can spend it. Now count how many times the banks' income is taxed before the owners can spend it.
 
2014-02-07 03:15:05 PM

Bloody William: Debeo Summa Credo: Okay, let me ask you this:

What portion of corporate income should be taken in total income taxes, and what portion should be left to go into the pockets of the owners of the corporation?   Let's make an assumption that the shareholders are all in the highest tax bracket.

There is no wrong answer, just looking for your view on the appropriate level of taxation of corporate income.

I don't know. With no consideration for the numbers in question, I'd say "fair" would be... 50% to 70%? Possibly with an aggressively tiered progressive rate for dividends for smaller investors.

The owners in question, quite simply, can afford to pay much more than the poor and middle class. I'm not saying bleed the rich dry. I'm saying stop bleeding the poor and middle class dry, because they are the ones whose income is primarily tied up in "food," "rent," "mortgages," "utilities," and "paying down debts."

If you taxed the wealthy at the same amount that the middle class pay for necessities, the wealthy would still have magnitudes more money to pay for whatever they want in their lives than the middle class would.


Okay, thanks. 50 to 70 is a wide range. As I detailed up top, we are pretty close to if not at 50% combined income tax take on corporate income when owned by wealthy people.

I have an aversion to going over 50%, and think taking 2/3rds would be appalling. But those are just opinions, as is your 50 to 70% range.
 
2014-02-07 03:21:34 PM

Debeo Summa Credo: As I detailed up top, we are pretty close to if not at 50% combined income tax take on corporate income when owned by wealthy people.


And as every one else in the thread including me have detailed after that, that 50% "combined income tax" is a ludicrous level of number-juggling to make the wealthy seem like they're put out when they aren't. It's math economic conservatives do to make themselves feel good about their plutocracy, and applies in such a limited way to add up to that total you're reaching for that we're ignoring that for a reason. And considering top marginal tax rates have been far above 50% in the past (and if you want to say "well, no one was REALLY taxed that much," I'll remix that observation with your 50% combined income tax rate dancing for a contradictory club beat), it's not really that big a problem. Especially when marginal tax rates can be modified and tiers can be restructured to ensure that just the most extreme levels of compensation get taxed at similarly extreme levels, and that those rates do not cut into the poor or middle-class, or upper-middle-class, or lower-upper-class, or whatever line is drawn between "I'm doing okay, paying my bills, living comfortably" and "I am in a Scorsese-like materialistic nightmare where I must accumulate wealth in levels that can only be seen as abstract outside of a ledger because that is what I am supposed to do at the top."
 
2014-02-07 03:21:45 PM

Debeo Summa Credo: Rhaab:

Exactly!!! Thank you for posting.

Count how many times the plumbing business' income is taxed before the owner can spend it on personal items,and how many times the shop's income is taxed before the owner can spend it. Now count how many times the banks' income is taxed before the owners can spend it.



Not sure you actually get the point of that comic. Everybody gets taxed on everything, all the time.
 
2014-02-07 03:24:53 PM
DBC is doing a really terrible MIKE LOWELL impersonation.
 
2014-02-07 03:31:47 PM

Rhaab: Debeo Summa Credo: Rhaab:

Exactly!!! Thank you for posting.

Count how many times the plumbing business' income is taxed before the owner can spend it on personal items,and how many times the shop's income is taxed before the owner can spend it. Now count how many times the banks' income is taxed before the owners can spend it.


Not sure you actually get the point of that comic. Everybody gets taxed on everything, all the time.


Not twice.   The employee makes money, his income is taxed and he can spend the rest, the caddy makes money, his income is taxed and he can spend the rest, the plumbing business makes money, the income is taxed, and the owner can spend the rest, the record store makes money, the income is taxed, and the owner can spend the rest, the bank makes money, its income is taxed, but the owners cant spend the rest until they pay another level of income tax.  "E" actually is the unique phenomenon in that example where earned income is taxed twice!

I find it hilarious that a comic intended to debunk the concept of 'double taxation' actually provides a very clear example of exactly the kind of double taxation it is trying to debunk.
 
2014-02-07 03:37:30 PM

Debeo Summa Credo: Rhaab: Debeo Summa Credo: Rhaab:

Exactly!!! Thank you for posting.

Count how many times the plumbing business' income is taxed before the owner can spend it on personal items,and how many times the shop's income is taxed before the owner can spend it. Now count how many times the banks' income is taxed before the owners can spend it.


Not sure you actually get the point of that comic. Everybody gets taxed on everything, all the time.

Not twice.   The employee makes money, his income is taxed and he can spend the rest, the caddy makes money, his income is taxed and he can spend the rest, the plumbing business makes money, the income is taxed, and the owner can spend the rest, the record store makes money, the income is taxed, and the owner can spend the rest, the bank makes money, its income is taxed, but the owners cant spend the rest until they pay another level of income tax.  "E" actually is the unique phenomenon in that example where earned income is taxed twice!

I find it hilarious that a comic intended to debunk the concept of 'double taxation' actually provides a very clear example of exactly the kind of double taxation it is trying to debunk.


What the fark are property taxes, sales taxes, etc? Farking magic non-tax taxes?
 
2014-02-07 03:41:18 PM

Bloody William: Debeo Summa Credo: As I detailed up top, we are pretty close to if not at 50% combined income tax take on corporate income when owned by wealthy people.

And as every one else in the thread including me have detailed after that, that 50% "combined income tax" is a ludicrous level of number-juggling to make the wealthy seem like they're put out when they aren't. It's math economic conservatives do to make themselves feel good about their plutocracy, and applies in such a limited way to add up to that total you're reaching for that we're ignoring that for a reason.


It's not 'math economic conservatives do to make themselves feel good about their plutocracy', it is simply 'math', which I know is not an economic liberal's strong point so I'll show you once again;

Per the NYT, the average total (federal and other) effective tax rate for the S&P 500 is 29%.   So of $100 in pre-tax corporate earnings, $29 is taken in corporate taxation.   If the remaining $71 is dividended to shareholders, they will pay (assuming they are in the 'plutocracy') 23.9% federal income tax (including ACA tax) on that, or another approximate $17, leaving $54 in their pocket.  Thats a 46% tax rate, not including state or local individual income taxes, which is zero in some states but can be above 10% in some jurisdictions (NYC for instance).  A portion of that might be deductible, but you can still get over 50% total tax rate very easily, which is in your desired range of 50-70% of corporate earnings to be taken in taxes.

http://www.nytimes.com/interactive/2013/05/25/sunday-review/corporat e- taxes.html?_r=0
 
2014-02-07 03:43:59 PM

Debeo Summa Credo: Bloody William: Debeo Summa Credo: As I detailed up top, we are pretty close to if not at 50% combined income tax take on corporate income when owned by wealthy people.

And as every one else in the thread including me have detailed after that, that 50% "combined income tax" is a ludicrous level of number-juggling to make the wealthy seem like they're put out when they aren't. It's math economic conservatives do to make themselves feel good about their plutocracy, and applies in such a limited way to add up to that total you're reaching for that we're ignoring that for a reason.

It's not 'math economic conservatives do to make themselves feel good about their plutocracy', it is simply 'math', which I know is not an economic liberal's strong point so I'll show you once again;

Per the NYT, the average total (federal and other) effective tax rate for the S&P 500 is 29%.   So of $100 in pre-tax corporate earnings, $29 is taken in corporate taxation.   If the remaining $71 is dividended to shareholders, they will pay (assuming they are in the 'plutocracy') 23.9% federal income tax (including ACA tax) on that, or another approximate $17, leaving $54 in their pocket.  Thats a 46% tax rate, not including state or local individual income taxes, which is zero in some states but can be above 10% in some jurisdictions (NYC for instance).  A portion of that might be deductible, but you can still get over 50% total tax rate very easily, which is in your desired range of 50-70% of corporate earnings to be taken in taxes.

http://www.nytimes.com/interactive/2013/05/25/sunday-review/corporat e- taxes.html?_r=0


My tax rate forms an asymptote near 100%.  I'm including every time the dollar is taxed before and after it leaves my hands.  I laugh at the pitifully small corporate tax rate of 46%.

You're able to form sentences and type them out on a computer. You're not this stupid.
 
2014-02-07 03:44:35 PM

Shakin_Haitian: Debeo Summa Credo: Rhaab: Debeo Summa Credo: Rhaab:

Exactly!!! Thank you for posting.

Count how many times the plumbing business' income is taxed before the owner can spend it on personal items,and how many times the shop's income is taxed before the owner can spend it. Now count how many times the banks' income is taxed before the owners can spend it.


Not sure you actually get the point of that comic. Everybody gets taxed on everything, all the time.

Not twice.   The employee makes money, his income is taxed and he can spend the rest, the caddy makes money, his income is taxed and he can spend the rest, the plumbing business makes money, the income is taxed, and the owner can spend the rest, the record store makes money, the income is taxed, and the owner can spend the rest, the bank makes money, its income is taxed, but the owners cant spend the rest until they pay another level of income tax.  "E" actually is the unique phenomenon in that example where earned income is taxed twice!

I find it hilarious that a comic intended to debunk the concept of 'double taxation' actually provides a very clear example of exactly the kind of double taxation it is trying to debunk.

What the fark are property taxes, sales taxes, etc? Farking magic non-tax taxes?


I don't know if they are magic, but they are certainly non-income tax taxes, which is of course what we are talking about.
 
2014-02-07 03:47:00 PM

Debeo Summa Credo: Shakin_Haitian: Debeo Summa Credo: Rhaab: Debeo Summa Credo: Rhaab:

Exactly!!! Thank you for posting.

Count how many times the plumbing business' income is taxed before the owner can spend it on personal items,and how many times the shop's income is taxed before the owner can spend it. Now count how many times the banks' income is taxed before the owners can spend it.


Not sure you actually get the point of that comic. Everybody gets taxed on everything, all the time.

Not twice.   The employee makes money, his income is taxed and he can spend the rest, the caddy makes money, his income is taxed and he can spend the rest, the plumbing business makes money, the income is taxed, and the owner can spend the rest, the record store makes money, the income is taxed, and the owner can spend the rest, the bank makes money, its income is taxed, but the owners cant spend the rest until they pay another level of income tax.  "E" actually is the unique phenomenon in that example where earned income is taxed twice!

I find it hilarious that a comic intended to debunk the concept of 'double taxation' actually provides a very clear example of exactly the kind of double taxation it is trying to debunk.

What the fark are property taxes, sales taxes, etc? Farking magic non-tax taxes?

I don't know if they are magic, but they are certainly non-income tax taxes, which is of course what we are talking about.


So when did shareholder income reverse itself and become corporate income?  Is this like when I buy things, it's negative income?  Jesus farking Christ, how do you even calculate taxes being taken out of your negative income?!?  Oh, our psychotic government!!
 
2014-02-07 07:50:56 PM
It was pretty bad when Giuliani gave tax breaks to companies that threatened to move to New Jersey.  It was even worse when some companies took the tax breaks and moved to New Jersey anyway.

http://nycfuture.org/research/publications/retention-deficit-disorde r
 
2014-02-07 08:43:41 PM

TheGregiss: dantheman195: TheGregiss: Maybe if they bailed out the people the industries won't need the government to keep them afloat as the common man/woman will have spendable income. To you know, spend. On shiat like fashion.

Lower taxes would work

Because that's worked wonders so far. Up the tax rate on the companies who won't hire. 95% and then tax breaks are conditional on retaining employees for 5+ years.


They move to country's not stupid enough to punish employers for laying people off or dismissing them for incompetence, like reality
 
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