- Aug 23, 2003
- 25,375
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Has anyone mentioned the anti-war protesters outside the debate? Or the iraq vet who got trampled by mounted police? They certainly didn't mention Iraq or Afghanistan during the debate..
I found it interesting to note that "Joe the Plumber" would actually benefit from an Obama tax cut:
Ah well ...
Ah well ...
Absolutely not. The people behind the scenes will know they have a puppet who is too uninformed to do anything but what they tell her to.
And he has A Tax lien from the State of Ohio
People are So Stupid. A small business will pay more taxes if their Income or "profit" (you know that thing you are left with after all the writeoffs and expences) is over 250,000. Now that only applies to Businesses that are S-corps or Sole proprietorship.
Only Businesses that are Sole-proprietorship, Partnerships, or S-corps are effected that have a total Take home Profit of 250,000 or more. 2-3% of All SMB's fit this
Its a scare tactic.
No kidding, I was surprised to learn that 98% of small businesses earn less than $250,000. I haven't fact-checked that Obama stat, but on face value it certainly takes the wind out of any argument that small businesses will get slammed with additional taxes under Obama's proposals.
The 250,000 is for personal income tax, and a small business owner can avoid the taxable liabilities by incorporating the business and taking a salary instead. Excess funds should be used to enhance the business in the first place, not taken out as windfall profits.
Plus if you are making over 250,000 as a SMB owner and you aren't incorporated, The Legal liability you could face could wipe out your personal wealth. Hence you incorporate to protect and separate your personal wealth.
Thats why this is all Pure FUD from McCain.
I mean Joe the Plumber is too stupid to see it. Thats why he is an F'ing plumber
Red Dawn
Elite Member
- Jun 4, 2001
- 57,529
- 3
- 0
Keep in mind that's $250,000 profit being taxed, not business revenue. Also if that money is reinvested in the business like buying new equipment or hiring more employees it wouldn't be taxed. It should be easy to get under the tax limit and if you can't then you are facing the same tax situation anybody who makes a $250,000 salary does.
The company I work for is an incorporated IT SMB and we work primarily with SMB and Mid-Cap companies. Every year we have many clients who go on a spending spree in Nov-Dec purchasing assets and services because they dont want to pay the Higher tax rates on the Profits they made through the year.
It could be argued that a higher Tax rate at certain levels could lead to more business expenditures to improve the business.
Last year on Dec 29th we sold $119,000 worth of SAN equipment to a client. The opportunity came about on Dec 21st. They wanted to get the business assets under that TAX year.
PERHAPS, but you realize these Puppetiers are also very image concious, and we can not have the PRESIDENT of the United States being a KNOWN puppet, the world is not as naive and apathetic as it used to be. Thankyou Education.
Fern
Elite Member
- Sep 30, 2003
- 26,907
- 174
- 106
This topic can get very complicated, and is made worse by faulty assumptions about statistics.
I suggest you bear in mind that the plan calls for raising taxes on only 5% of people. Ergo, taxes can at most be raised on only 5% of small business. The number is smaller than 5% because we have execs at Fortune 500's earning more than $250K in salary (and stock options).
However, if say only 10% of the top 5% taxpayers are execs, then 90% of those hit with higher taxes are small business. I.e., his plan mostly raises taxes for small businesses.
Aren't stats funny?
But also be aware, any one small business may not show a profit of $250,000, yet the owner(s) may have $250K of income from that business on his/her tax return. How so?
1. If your business is in an S-corp (and you are other than an absentee owner), you better be paying yourself a salary (that way the government gets you for FICA/SS). That salary will be deducted on the S-corp's T/R, and will show up on the owner's t/r along with the S-Corp profit. E.g., My S-corp shows a profit before wages of $300K, but I better pay myself a $100K salary or risk big IRS problems. So, the S-corp will only show a profit of $200K, but when including it and my salary I now show total taxable income from the business at $300K ($200K pass-through from S-corp and $100K salary).
People with a profitable S-corp (and aren't absentee owners) who refuse to pay themselves any salary (in order to avoid FICA/SS taxes) have lost each and every time when taken to court by the IRS. I've never yet seen anyone win. So, in almost every instance, the owners profit from the business on his tax return is more than that shown on the S-corp's t/r (must add his/her salary)
2. One business is split between two or more entities; this is common and often done for liability purposes. So, no one entity (S-corp, whatever) reports $250K, but when all combined on the owner's tax return the aggregate taxable income is $250K or more.
3. Husband and wife; neither's single business reports $250K or more, but when combined on their joint tax return it does.
^ These common occurrences would be left out the stats that show business making a net profit of $250K or more. I.e., the stats *lie*
See bolded above.
Cliffs: Statistics lie, and this is a b!tch of a topic for a layperson.
BTW: I see Joe the Plumber may have a tax lien against him. In my experience this is often sufficient to make people opposed to tax hikes, whether or not told they'll be affected - they won't believe that easily. They also often rationalize how they were unfairly treated and "screwed" by "taxes" pretty much resulting in irrational opposition to taxes - PERIOD.
Fern
I suggest you bear in mind that the plan calls for raising taxes on only 5% of people. Ergo, taxes can at most be raised on only 5% of small business. The number is smaller than 5% because we have execs at Fortune 500's earning more than $250K in salary (and stock options).
However, if say only 10% of the top 5% taxpayers are execs, then 90% of those hit with higher taxes are small business. I.e., his plan mostly raises taxes for small businesses.
Aren't stats funny?
But also be aware, any one small business may not show a profit of $250,000, yet the owner(s) may have $250K of income from that business on his/her tax return. How so?
1. If your business is in an S-corp (and you are other than an absentee owner), you better be paying yourself a salary (that way the government gets you for FICA/SS). That salary will be deducted on the S-corp's T/R, and will show up on the owner's t/r along with the S-Corp profit. E.g., My S-corp shows a profit before wages of $300K, but I better pay myself a $100K salary or risk big IRS problems. So, the S-corp will only show a profit of $200K, but when including it and my salary I now show total taxable income from the business at $300K ($200K pass-through from S-corp and $100K salary).
People with a profitable S-corp (and aren't absentee owners) who refuse to pay themselves any salary (in order to avoid FICA/SS taxes) have lost each and every time when taken to court by the IRS. I've never yet seen anyone win. So, in almost every instance, the owners profit from the business on his tax return is more than that shown on the S-corp's t/r (must add his/her salary)
2. One business is split between two or more entities; this is common and often done for liability purposes. So, no one entity (S-corp, whatever) reports $250K, but when all combined on the owner's tax return the aggregate taxable income is $250K or more.
3. Husband and wife; neither's single business reports $250K or more, but when combined on their joint tax return it does.
^ These common occurrences would be left out the stats that show business making a net profit of $250K or more. I.e., the stats *lie*
See bolded above.
Cliffs: Statistics lie, and this is a b!tch of a topic for a layperson.
BTW: I see Joe the Plumber may have a tax lien against him. In my experience this is often sufficient to make people opposed to tax hikes, whether or not told they'll be affected - they won't believe that easily. They also often rationalize how they were unfairly treated and "screwed" by "taxes" pretty much resulting in irrational opposition to taxes - PERIOD.
Fern
Fern
Elite Member
- Sep 30, 2003
- 26,907
- 174
- 106
Well no, not really.
What you're looking at is the benefit of the section 179 deduction. This allows purchased assets to be written-off immediately (instead of depreciating over many years). I.e., a great deduction opportunity to reduce income taxes.
Last year the limit was $125K of asset purchases. Looks like they came as close as they could to it.
Next year it's going up to $250K IIRC.
Raisng marginal tax rates certainly wouldn't discourage anyone from availing themselves of this benefit, but IMO, raising the section 179 limit is the real key/incentive to encourage companies to purchase more/faster etc.
Fern
The plumber's pipes are full of shit.
Does anyone else think his story is probably 100% fiction?
All he needs is a good tax accountant and a good lawyer and he'd be fine.
Notice Obama knows nothing about accounting, or business law? Otherwise he would have asked him a few questions, such as have you formed a sub-S Corp, will your wife work in the business, will you need to buy a lot of depreciable equipment the first year, etc.? A few questions and his story would have probably fallen apart.
-Robert
Does anyone else think his story is probably 100% fiction?
All he needs is a good tax accountant and a good lawyer and he'd be fine.
Notice Obama knows nothing about accounting, or business law? Otherwise he would have asked him a few questions, such as have you formed a sub-S Corp, will your wife work in the business, will you need to buy a lot of depreciable equipment the first year, etc.? A few questions and his story would have probably fallen apart.
-Robert
Red Dawn
Elite Member
- Jun 4, 2001
- 57,529
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He's not even a licensed Plumber or registered to vote. Those are two things he should look into doing before he starts his own business. I think he's a ways off from having to worry about having to pay taxes on $250,000 income, mesanwhile the tax breaks will actually help him.
Your purpose when you're gladhanding people as a politician is not to shoot them down or beat them verbally, it's to make people like you. Even if Obama did know all that (and I'm not saying he did) the smart move is just to brush the guy off and move on.
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