Taxes

[jasonxctf]

Interesting article....

 

 

President Barack Obama and many Democrats are talking about raising taxes on the wealthy, and new data released this week by the Internal Revenue Service reveals new details about the number of Americans who fit that bill.

 

People and households earning $1 million or more annually made up just 0.1 percent, or just over 235,000, of the 140 million tax returns filed in 2009, and just 8,274 returns were filed by people making $10 million or more.

 

Though the tax rate for Americans earning a gross adjusted income of $1 million or more averaged 24.4 percent, up from 23.1 percent in 2008, that’s still lower than the 28.5 percent rate they paid in 2002 when President George W. Bush was in office.

 

And, the data shows, the 235,413 taxpayers who reported earning seven digits or more in 2009 took in a total of $726.9 billion — yet 1,470 paid not a penny of income taxes. In 2007, 959 Americans earning $1 million or more paid no income taxes.

 

The returns filed in 2009 reflect income from 2008, the deepest depths of the recession and financial crisis, and, under that backdrop, incomes fell sharply.

 

The vast majority of tax return filers – more than 97 percent – reported incomes of less than $200,000. The average income was $54,283, a drop of more than $3,500, or 6 percent, from 2008. That put the average income at its lowest level since 1997.

 

At the same time, the average tax rate declined from 12.5 percent in 2008 to 11.4 percent in 2009.

 

The amount of unemployment benefits claimed on tax returns nearly doubled between 2008 and 2009, the IRS found.

 

 

Read more: http://www.politico.com/news/stories/0811/...l#ixzz1UAY4xk2L

 

 

So a few questions arise, most importantly...

 

How do you make over $1 million a year, as an individual, and not pay anything in taxes? Isn't this what the AMT is supposed to catch?

[StrangeSox]

If they have no wage income but only capital gains income, you won't pay income taxes.

[jasonxctf]

But isnt capital gains taxed at 15%?

[southsider2k5]

But isnt capital gains taxed at 15%?

 

But it isn't "income" tax.

[jasonxctf]

i guess, but wouldn't the "adjusted gross income" definition cover that?

 

Doesn't AGI include wages, income, gifts, dividends, interest, capital gains after deductions?

[EvilMonkey]

If they owned a small business classed as a subchapter -S corp., then any business losses (or profits) would be counted for or against personal income. So they could make $1 million, but if business losses totaled enough to wipe out the taxes on that, they pay nothing.

[Y2HH]

But isnt capital gains taxed at 15%?

 

Short term cap gains is 30%. Long term is 15%. Long term = 1 year+.

[Andrew]

If they owned a small business classed as a subchapter -S corp., then any business losses (or profits) would be counted for or against personal income. So they could make $1 million, but if business losses totaled enough to wipe out the taxes on that, they pay nothing.

 

You can't operate an S-Corp without paying taxes the whole f***ing way. At best, you can try to recoup some of those payments and yes - they do translate to deductions against the principals filing.

 

But so what?

 

The government ALWAYS gets its money first, holds it, and gets to play without any return of lost income on revenue earned while they essentially borrowed it interest free (and penalizes too for anything more than 5 minutes past due).

 

Your statment also says nothing about the MASSIVE responsibility, stress, and bulls*** that goes with running an S-Corp with your name (and those that depend on you) directly attached to it....

 

I guess I'm trying to figure out if you think there's a problem here. S-Corp principals get banged left right and upside down all year while trying to make payroll, benefits, and keep people working while PAYING RIDICULOUS TAXES THE WHOLE WAY, just to maybe....get a piece back, and there's no interest on that $ the govt had 12 months to play with (and misuse).

 

Is that unreasonable?

 

For me, (most years since 2001) I've pulled in less during the year than top/decent producing sales employees, only to count on the year end to break even...

 

Your summary has some basis in fact, but little in reality, my friend.

 

 

[Cknolls]

Short term cap gains is 30%. Long term is 15%. Long term = 1 year+.

 

 

Short term is actually your income tax rate.

[EvilMonkey]

You can't operate an S-Corp without paying taxes the whole f***ing way. At best, you can try to recoup some of those payments and yes - they do translate to deductions against the principals filing.

 

But so what?

 

The government ALWAYS gets its money first, holds it, and gets to play without any return of lost income on revenue earned while they essentially borrowed it interest free (and penalizes too for anything more than 5 minutes past due).

 

Your statment also says nothing about the MASSIVE responsibility, stress, and bulls*** that goes with running an S-Corp with your name (and those that depend on you) directly attached to it....

 

I guess I'm trying to figure out if you think there's a problem here. S-Corp principals get banged left right and upside down all year while trying to make payroll, benefits, and keep people working while PAYING RIDICULOUS TAXES THE WHOLE WAY, just to maybe....get a piece back, and there's no interest on that $ the govt had 12 months to play with (and misuse).

 

Is that unreasonable?

 

For me, (most years since 2001) I've pulled in less during the year than top/decent producing sales employees, only to count on the year end to break even...

 

Your summary has some basis in fact, but little in reality, my friend.

Not really. I had an S corp, and for a few of those years I unfortunately had such massive losses that I got back every penny I paid in taxes. Yes, the Feds got to hold onto it for a while, but I got it back, so by definition, I paid no (income) taxes those years. And yes, most of the years my top employee made more than I did.

[BigSqwert]

This is great news to all of the millionaires on this site!

[StrangeSox]

They've got no skin in the game; they don't deserve to vote.

[LittleHurt05]

This is great news to all of the millionaires on this site!

 

I thought everyone on this website was a millionaire? Aren't you?

[BigSqwert]

I thought everyone on this website was a millionaire? Aren't you?

 

Of course. Why do you think I sounded so excited?

[EvilMonkey]

They've got no skin in the game; they don't deserve to vote.

That's fine. Take away those 1500 and also take away the millions that don't pay anything, unemployed, welfare and generally getting it all back on refunds. That's a deal I would make.

[StrangeSox]

Disenfranchisement is A-OK with me!