Taxing in the US

[Rogan Josh]

I dunno, I have never tried, but I doubt it.

[Spiffor]

I somehow thought you were living in Paris RJ...

[Rogan Josh]

No. I work in Geneva, but live just over the border in France (it's much cheaper).

[Spiffor]

Ah yes. I have a friend whose parents have done the exact opposite (living near Geneva, worked in France IIRC).
I just loved that they didn't pay French taxes, but my friend went nonetheless to the French public school

[JohnT]

Originally posted by Zkribbler


And remember, the really big incomes don't come from work but from coporate dividends, capital gains, and inheritance. Those three items IMHO should be taxed at a much higher rate than income from salaries. Unfortunately, the GOP has been remarkable successful at convincing people that non-work income should be tax free.

In which Urban Ranger, JohnT, and Sten discuss US corporate tax rates and dividend taxes, therefore coming to the conclusion that

1. Dividends are taxable and they are taxed not as capital gains, but at the higher income tax rates.
2. Dividends are profits remaining after the Federal government takes a 34% chunk (and after the state and local districts take their pickings), meaning that dividends represent income that has already been taxed.

In which Sava, JohnT, and Sten discuss whether Exxon/Mobile pays their "fair share" in taxes. Conclusion: Does $68 billion in taxes before payroll (social security and medicare) and dividend taxes seem fair enough?

The fact is, if paid out as dividends, more than 60% of all pre-tax corporate profits go to governments, Zk, and in some industries, the added cost of government(s) is a full one-third of the total costs in running the business - and that's before you show a profit! How much freakin' more do y'all want?

[Spiffor]

One third is two thirds short of being good

[Kidlicious]

Originally posted by JohnT




In which Urban Ranger, JohnT, and Sten discuss US corporate tax rates and dividend taxes, therefore coming to the conclusion that

1. Dividends are taxable and they are taxed not as capital gains, but at the higher income tax rates.
2. Dividends are profits remaining after the Federal government takes a 34% chunk (and after the state and local districts take their pickings), meaning that dividends represent income that has already been taxed.

In which Sava, JohnT, and Sten discuss whether Exxon/Mobile pays their "fair share" in taxes. Conclusion: Does $68 billion in taxes before payroll (social security and medicare) and dividend taxes seem fair enough?

The fact is, if paid out as dividends, more than 60% of all pre-tax corporate profits go to governments, Zk, and in some industries, the added cost of government(s) is a full one-third of the total costs in running the business - and that's before you show a profit! How much freakin' more do y'all want?

It seems as though some people are still in favor of a dividend tax after all this. There's no tax that is good. We have to tax something. I like dividend tax because it isn't as bad as other taxes.

[Zkribbler]

Originally posted by JohnT
2. Dividends are profits remaining after the Federal government takes a 34% chunk (and after the state and local districts take their pickings), meaning that dividends represent income that has already been taxed.

Wow, one sentence and you're wrong twice.

1) When the government imposes an income tax upon a person, it usually taxes income. However, corporations are not taxed on their incomes, but on their profits. Wouldst that Uncle Sam would only taxed me on my income after I substracted out all of my expenses. But Uncle Sam loves big corporations more than he loves me.

2) When money goes from one person to another, it is taxed as income. F'instance, when my employer pays me my salary, I have to pay income taxes on it. Thus, when a corporation pays dividends to its shareholders, it is unequitable to exempt them from paying taxes on that income.

(BTW...there is a current system in place now which would permit avoiding these so-called double taxes. Simply convert the corporation into a partnership. Unlike a corporation, a partnership does not qualify as a "person" under the law, and so monies can flow directly to its owners without taxation. Corporate shareholders don't want to do that because it subjects them to personal responsibility for the debts of the corporations.)

[Imran Siddiqui]

Zkribbler, read the threads.

A. Corporations are taxed on profits because hardly any individual has negative profits, while corporations do all the time (therefore taxing income would tend to charge them too much because they are already losing money). Further, taxes on incomes would tend to reduce how much corporations would pay employees (in order to get to positive profits).

B. When your employer takes income and pays you, you only pay taxes on that money ONCE, when you get it as income taxes (that's because the corporation is taxes on profits). When corporations give dividends, the corporation's profit (which a dividend basically is) is taxed, and the dividend is taxed!

Dividends, capital gains, and inhertance taxes SHOULD be abolished. The quicker, the better.

[Spiffor]

Originally posted by Imran Siddiqui
Dividends, capital gains, and inhertance taxes SHOULD be abolished. The quicker, the better.

Poor, poor rich people.
Gotta remove some superfluous healthcare to end this horrendous injustice.

[Imran Siddiqui]

No, bad bad double taxation. It's simply unfair for one body to tax people twice on the same incomes... and unproductive.

[Kidlicious]

I'm just waiting for Zr to take a shot then I'll pick it up if he misses anything.

[JohnT]

Originally posted by Zkribbler


Wow, one sentence and you're wrong twice.

1) When the government imposes an income tax upon a person, it usually taxes income. However, corporations are not taxed on their incomes, but on their profits. Wouldst that Uncle Sam would only taxed me on my income after I substracted out all of my expenses.

Imran took care of this one... actually, the very threads that I referenced took care of this one.

But Uncle Sam loves big corporations more than he loves me.

Your government doesn't exist to love you.

2) When money goes from one person to another, it is taxed as income. F'instance, when my employer pays me my salary, I have to pay income taxes on it. Thus, when a corporation pays dividends to its shareholders, it is unequitable to exempt them from paying taxes on that income.

And when the money is tallied up at the end of the year and the corporation earns a profit, that money is taxed as income. Since a corporation is no more than the aggregate class of shareholders for that particular corporation, this means that the individual shareholders are automatically taxed in proportion to the number of shares that they own. To tax the individuals again just for the "right" to transfer after-tax assets from one account to another is preposterous.

The dividend tax is also a factor in the seemingly never-ending quest for bigger, better American corporations - since the major shareholders aren't allowed to cash out the value of the corporation, their only option to increasing their wealth is by increasing their market capitalization - plowing profits back into the corporation, if you will. If you want corporations to become smaller in America, allow people, especially the founders, to more aggressively take their money out of them.

(BTW...there is a current system in place now which would permit avoiding these so-called double taxes. Simply convert the corporation into a partnership. Unlike a corporation, a partnership does not qualify as a "person" under the law, and so monies can flow directly to its owners without taxation. Corporate shareholders don't want to do that because it subjects them to personal responsibility for the debts of the corporations.)

It can also subject you to personal responsibility for the debts of your partners as well, which is not something the 2million+ shareholders of ATT want. And as I'm sure you can figure out, beyond a certain number of shareholders, a partnership becomes untenable.

There's also a system in place to avoid dividend taxes for small Chapter-C corporations with a few shareholders: it's called "bonusing out the profit" and is a common trick in a lot of companies.

[Kidlicious]

What taxes do you want to increase JohnT? Taxes are going to have to be increased soon. Which ones do you favor?

[JohnT]

Cutting spending?

Or a re-allocation of current spending... lop $50bil off defense, tack it onto debt reduction, crapola like that.

In another thread quite a while back I linked to an IRS excel spreadsheet that showed percentage of taxes paid by income bracket... and I noted that the top 50% of income earners in this country, according to the IRS itself and not some biased Left/Right site, paid 96% of the Federal Income Tax in this country and 50% of the FICA taxes, while the bottom 50% paid 4% of the income taxes and 50% of the FICA.

I have no problem with the bottom 10, or even 25% paying no federal income tax, but 50??

You could also raise corporate profit taxes by a smaller amount than the dividend tax and watch them squirm as they really can't complain all that much... and, after all, you're the government and you do control the army.