Author Topic: Taxes (GOP 2017 edition)  (Read 137719 times)

0 Members and 1 Guest are viewing this topic.

Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #850 on: December 13, 2017, 04:54:42 PM »
I don't have a problem with reducing taxes on pass-throughs, per se. But I'd probably set it closer to 35% and use the savings to give everyone (including pass-through earners) an even sweeter tax cut.

I guess maybe this is what the House and Senate are currently arguing over (that, and how to structure this to prevent wealthy w-2 wage earners from incorporating). Seems like a worthwhile discussion. But I can't sympathize with the side pushing for a bigger pass-through cut.
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline catastrophe

  • Pak'r Élitaire
  • ****
  • Posts: 15103
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #851 on: December 13, 2017, 04:55:33 PM »
Fewer businesses (ESPECIALLY small businesses) are organized as C corporations. If the bill is cutting the corporate tax rate for the sake of creating jobs it makes no sense not to give similar breaks to LLCs and S Corps.

Um, sure it does? Again, s-corps and other pass-through entities already enjoyed a significant tax benefit over c-corps. The pass through entities aren't being double-taxed. They pay personal income taxes on their distributions, which seems fair to me. C-corps get a corporate tax cut to reduce the double taxation, and then still pay personal income tax on the distributions.

Right? So that's why the corporate income tax should be reduced: to lessen double taxation and bring them onto more equal footing with s-corps.

You're presuming these two organizational structures should be on equal footing, but why?  Are you just assuming that the legislators who allowed for s-corps accidentally made them way better than c-corps?  And regardless of that distinction, you can organize an LLC just about however you want.  If a c-corp really thought they were getting a raw deal, they would change organizational structures.

The question I have is why an owner (partner, shareholder, etc.) of an s-corp should pay less personal income tax than a W-2 wage earner. If the goal is to help "small businesses", the vast majority of those won't be impacted by this at all because their marginal personal income tax rate is already less than 25% (that's the proposed max rate for pass-throughs under the house bill). So the rate reduction would only seem to help folks who receive a big enough distribution from an s-corp that their marginal rate would exceed that 25%.

So you do or do not believe in trickle down economics?  Need an answer on that first, because that is exactly the point of allowing the owners of pass-through entities to keep more money.

Offline yoga-like_abana

  • Pak'r Élitaire
  • ****
  • Posts: 13188
  • Don't @ me boy, cause I ain't said crap
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #852 on: December 13, 2017, 04:56:33 PM »
so am I getting a crap ton or no crap for this lovely new tax deduction that was born in december?

Offline catastrophe

  • Pak'r Élitaire
  • ****
  • Posts: 15103
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #853 on: December 13, 2017, 04:57:36 PM »
so am I getting a crap ton or no crap for this lovely new tax deduction that was born in december?

Should be golden for next year.  The year after, it likely will depend on what number you are on and how much you make.

Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #854 on: December 13, 2017, 04:58:34 PM »
Fewer businesses (ESPECIALLY small businesses) are organized as C corporations. If the bill is cutting the corporate tax rate for the sake of creating jobs it makes no sense not to give similar breaks to LLCs and S Corps.

Um, sure it does? Again, s-corps and other pass-through entities already enjoyed a significant tax benefit over c-corps. The pass through entities aren't being double-taxed. They pay personal income taxes on their distributions, which seems fair to me. C-corps get a corporate tax cut to reduce the double taxation, and then still pay personal income tax on the distributions.

Right? So that's why the corporate income tax should be reduced: to lessen double taxation and bring them onto more equal footing with s-corps.

You're presuming these two organizational structures should be on equal footing, but why?  Are you just assuming that the legislators who allowed for s-corps accidentally made them way better than c-corps?  And regardless of that distinction, you can organize an LLC just about however you want.  If a c-corp really thought they were getting a raw deal, they would change organizational structures.

The question I have is why an owner (partner, shareholder, etc.) of an s-corp should pay less personal income tax than a W-2 wage earner. If the goal is to help "small businesses", the vast majority of those won't be impacted by this at all because their marginal personal income tax rate is already less than 25% (that's the proposed max rate for pass-throughs under the house bill). So the rate reduction would only seem to help folks who receive a big enough distribution from an s-corp that their marginal rate would exceed that 25%.

So you do or do not believe in trickle down economics?  Need an answer on that first, because that is exactly the point of allowing the owners of pass-through entities to keep more money.

I absolutely believe in supply side economics. But I think that applies regardless of whether someone is a w-2 wage earner or self incorporates. Again, pass throughs already get a big benefit of paying zero corporate income tax. Once you take a distribution, pay the same personal income tax as anyone else. Cut those taxes to the same levels for everyone.
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline hjfklmor

  • Fan
  • *
  • Posts: 221
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #855 on: December 13, 2017, 04:59:55 PM »
Fewer businesses (ESPECIALLY small businesses) are organized as C corporations. If the bill is cutting the corporate tax rate for the sake of creating jobs it makes no sense not to give similar breaks to LLCs and S Corps.

Um, sure it does? Again, s-corps and other pass-through entities already enjoyed a significant tax benefit over c-corps. The pass through entities aren't being double-taxed. They pay personal income taxes on their distributions, which seems fair to me. C-corps get a corporate tax cut to reduce the double taxation, and then still pay personal income tax on the distributions.

Right? So that's why the corporate income tax should be reduced: to lessen double taxation and bring them onto more equal footing with s-corps.

The question I have is why an owner (partner, shareholder, etc.) of an s-corp should pay less personal income tax than a W-2 wage earner. If the goal is to help "small businesses", the vast majority of those won't be impacted by this at all because their marginal personal income tax rate is already less than 25% (that's the proposed max rate for pass-throughs under the house bill). So the rate reduction would only seem to help folks who receive a big enough distribution from an s-corp that their marginal rate would exceed that 25%.

If we are trying to incentivize people to start businesses, seems like the s-corp structure was already a pretty good incentive: open a business and you won't pay any corporate income tax on your profits - you just pay personal income tax on what you take out of the business, same as everyone else.

I understand why Kansas eliminated taxes on s-corps: it was designed to lure businesses to Kansas. But that's a non-issue when implementing nationwide.

At the end of the day, I'm not begrudging anyone getting a better deal than me. I'm already getting a pretty sweet deal. Just seems odd to me that we'd allow two people earning the same amount to pay significantly different rates based on a legal fiction.

S corps and partnerships are taxed on their earnings. Its the distributions that are tax free.

Offline Dugout DickStone

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 51305
  • BSPAC
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #856 on: December 13, 2017, 05:01:54 PM »
man now kaz dub is a socialist?  gross

Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #857 on: December 13, 2017, 05:03:14 PM »
I also think it is a great idea to help small businesses. But I don't think the proposed rate reduction does that, because most truly small business won't pay a high enough marginal personal income tax rate to hit that max 25%. A better model to help small businesses would be make a certain amount of s-corp income tax free, rather than just imposing a max rate of 25% that most won't ever hit. As things currently stand, this is a nice windfall for the wealthy. I'm all about reducing taxes on the wealthy, but seems like everyone should get the same reduction regardless of whether you're a wealthy w-2 earner or pass-through recipient.
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #858 on: December 13, 2017, 05:04:05 PM »
Fewer businesses (ESPECIALLY small businesses) are organized as C corporations. If the bill is cutting the corporate tax rate for the sake of creating jobs it makes no sense not to give similar breaks to LLCs and S Corps.

Um, sure it does? Again, s-corps and other pass-through entities already enjoyed a significant tax benefit over c-corps. The pass through entities aren't being double-taxed. They pay personal income taxes on their distributions, which seems fair to me. C-corps get a corporate tax cut to reduce the double taxation, and then still pay personal income tax on the distributions.

Right? So that's why the corporate income tax should be reduced: to lessen double taxation and bring them onto more equal footing with s-corps.

The question I have is why an owner (partner, shareholder, etc.) of an s-corp should pay less personal income tax than a W-2 wage earner. If the goal is to help "small businesses", the vast majority of those won't be impacted by this at all because their marginal personal income tax rate is already less than 25% (that's the proposed max rate for pass-throughs under the house bill). So the rate reduction would only seem to help folks who receive a big enough distribution from an s-corp that their marginal rate would exceed that 25%.

If we are trying to incentivize people to start businesses, seems like the s-corp structure was already a pretty good incentive: open a business and you won't pay any corporate income tax on your profits - you just pay personal income tax on what you take out of the business, same as everyone else.

I understand why Kansas eliminated taxes on s-corps: it was designed to lure businesses to Kansas. But that's a non-issue when implementing nationwide.

At the end of the day, I'm not begrudging anyone getting a better deal than me. I'm already getting a pretty sweet deal. Just seems odd to me that we'd allow two people earning the same amount to pay significantly different rates based on a legal fiction.

S corps and partnerships are taxed on their earnings. Its the distributions that are tax free.

I did not know this. So how's that different from a c-corp?
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline Dugout DickStone

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 51305
  • BSPAC
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #859 on: December 13, 2017, 05:06:00 PM »
I also think it is a great idea to help small businesses. But I don't think the proposed rate reduction does that, because most truly small business won't pay a high enough marginal personal income tax rate to hit that max 25%. A better model to help small businesses would be make a certain amount of s-corp income tax free, rather than just imposing a max rate of 25% that most won't ever hit. As things currently stand, this is a nice windfall for the wealthy. I'm all about reducing taxes on the wealthy, but seems like everyone should get the same reduction regardless of whether you're a wealthy w-2 earner or pass-through recipient.

let's give a tax cut to the w-2 earner who makes my latte omg that will help the economy  :ROFL:

Offline hjfklmor

  • Fan
  • *
  • Posts: 221
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #860 on: December 13, 2017, 05:06:20 PM »
I also think it is a great idea to help small businesses. But I don't think the proposed rate reduction does that, because most truly small business won't pay a high enough marginal personal income tax rate to hit that max 25%. A better model to help small businesses would be make a certain amount of s-corp income tax free, rather than just imposing a max rate of 25% that most won't ever hit. As things currently stand, this is a nice windfall for the wealthy. I'm all about reducing taxes on the wealthy, but seems like everyone should get the same reduction regardless of whether you're a wealthy w-2 earner or pass-through recipient.

What you are proposing is the treatment that passthroughs get in the Senate version of the bill.

Quote
(a) In General.—In the case of a taxpayer other than a corporation, there shall be allowed as a deduction for any taxable year an amount equal to the lesser of—

“(1) the combined qualified business income amount of the taxpayer, or

“(2) an amount equal to 23 percent of the excess (if any) of—

“(A) the taxable income of the taxpayer for the taxable year, over

“(B) any net capital gain (as defined in section 1(h)) of the taxpayer for the taxable year.

Offline hjfklmor

  • Fan
  • *
  • Posts: 221
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #861 on: December 13, 2017, 05:09:51 PM »
Fewer businesses (ESPECIALLY small businesses) are organized as C corporations. If the bill is cutting the corporate tax rate for the sake of creating jobs it makes no sense not to give similar breaks to LLCs and S Corps.

Um, sure it does? Again, s-corps and other pass-through entities already enjoyed a significant tax benefit over c-corps. The pass through entities aren't being double-taxed. They pay personal income taxes on their distributions, which seems fair to me. C-corps get a corporate tax cut to reduce the double taxation, and then still pay personal income tax on the distributions.

Right? So that's why the corporate income tax should be reduced: to lessen double taxation and bring them onto more equal footing with s-corps.

The question I have is why an owner (partner, shareholder, etc.) of an s-corp should pay less personal income tax than a W-2 wage earner. If the goal is to help "small businesses", the vast majority of those won't be impacted by this at all because their marginal personal income tax rate is already less than 25% (that's the proposed max rate for pass-throughs under the house bill). So the rate reduction would only seem to help folks who receive a big enough distribution from an s-corp that their marginal rate would exceed that 25%.

If we are trying to incentivize people to start businesses, seems like the s-corp structure was already a pretty good incentive: open a business and you won't pay any corporate income tax on your profits - you just pay personal income tax on what you take out of the business, same as everyone else.

I understand why Kansas eliminated taxes on s-corps: it was designed to lure businesses to Kansas. But that's a non-issue when implementing nationwide.

At the end of the day, I'm not begrudging anyone getting a better deal than me. I'm already getting a pretty sweet deal. Just seems odd to me that we'd allow two people earning the same amount to pay significantly different rates based on a legal fiction.

S corps and partnerships are taxed on their earnings. Its the distributions that are tax free.

I did not know this. So how's that different from a c-corp?

C corps are taxed on their earnings at a max rate of 35%, currently. Distributions (dividends) are taxed on the individual return at potentially beneficial rates.

S corps and partnerships are taxed on their earnings on each shareholder or partners individual return, potentially at a 39.6% marginal rate. S corp shareholders who work for their company (active investors) also receive a W-2 and are taxed on their wages.

Choice of entity isTaxes are complicated.

Offline Kat Kid

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 20444
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #862 on: December 13, 2017, 05:10:42 PM »
It looks like they are removing the stupid stuff that targeted grad students that you thought was a good idea.

If by "target" you mean "treat them like everyone else" (or more specifically, require the universities to provide adequate compensation such that they can pay taxes on their scholarships), then it would be a shame for the GOP to back away from this. The higher ed lobby wins again, I guess.

Treating scholarships the same thing as income is a pretty radical idea. But sure, you can pretend like you are a normal person.

Offline cfbandyman

  • Pak'r Élitaire
  • ****
  • Posts: 9215
  • To da 'ville.
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #863 on: December 13, 2017, 05:14:00 PM »
It looks like they are removing the stupid stuff that targeted grad students that you thought was a good idea.

If by "target" you mean "treat them like everyone else" (or more specifically, require the universities to provide adequate compensation such that they can pay taxes on their scholarships), then it would be a shame for the GOP to back away from this. The higher ed lobby wins again, I guess.

Treating scholarships the same thing as income is a pretty radical idea. But sure, you can pretend like you are a normal person.

:lol:
A&M Style: 1/19/13 Co-Champion of THE ED's College Basketball Challenge

The art of the deal with it poors

OG Elon hater with a tesla


Offline catastrophe

  • Pak'r Élitaire
  • ****
  • Posts: 15103
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #864 on: December 13, 2017, 05:17:03 PM »
let's give a tax cut to the w-2 earner who makes my latte omg that will help the economy  :ROFL:

You laugh, but I promise you it would help the economy more than cutting the corporate tax rate.  That money will go into bigger bonuses for top execs in the form of company shares which enjoy their own tax breaks and may end up in a trust somewhere just accumulating value.

At least if you give the barista a few more bucks in his pocket he is very likely to spend those at some overpriced cupcake shop or something which at least helps that owner stay employed.

Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #865 on: December 13, 2017, 05:24:29 PM »
It looks like they are removing the stupid stuff that targeted grad students that you thought was a good idea.

If by "target" you mean "treat them like everyone else" (or more specifically, require the universities to provide adequate compensation such that they can pay taxes on their scholarships), then it would be a shame for the GOP to back away from this. The higher ed lobby wins again, I guess.

Treating scholarships the same thing as income is a pretty radical idea. But sure, you can pretend like you are a normal person.

:lol:

If the "scholarship" is offered as compensation to do a job, its income. Please explain why TA's deserve a special tax break.
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline cfbandyman

  • Pak'r Élitaire
  • ****
  • Posts: 9215
  • To da 'ville.
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #866 on: December 13, 2017, 05:26:19 PM »
let's give a tax cut to the w-2 earner who makes my latte omg that will help the economy  :ROFL:

You laugh, but I promise you it would help the economy more than cutting the corporate tax rate.  That money will go into bigger bonuses for top execs in the form of company shares which enjoy their own tax breaks and may end up in a trust somewhere just accumulating value.

At least if you give the barista a few more bucks in his pocket he is very likely to spend those at some overpriced cupcake shop or something which at least helps that owner stay employed.

I think that's what he was getting at but the whole exchange was weird. But yes, that is what will happen

Quote
That money will go into bigger bonuses for top execs in the form of company shares which enjoy their own tax breaks and may end up in a trust somewhere just accumulating value.
A&M Style: 1/19/13 Co-Champion of THE ED's College Basketball Challenge

The art of the deal with it poors

OG Elon hater with a tesla


Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #867 on: December 13, 2017, 05:28:50 PM »
I also think it is a great idea to help small businesses. But I don't think the proposed rate reduction does that, because most truly small business won't pay a high enough marginal personal income tax rate to hit that max 25%. A better model to help small businesses would be make a certain amount of s-corp income tax free, rather than just imposing a max rate of 25% that most won't ever hit. As things currently stand, this is a nice windfall for the wealthy. I'm all about reducing taxes on the wealthy, but seems like everyone should get the same reduction regardless of whether you're a wealthy w-2 earner or pass-through recipient.

What you are proposing is the treatment that passthroughs get in the Senate version of the bill.

Quote
(a) In General.—In the case of a taxpayer other than a corporation, there shall be allowed as a deduction for any taxable year an amount equal to the lesser of—

“(1) the combined qualified business income amount of the taxpayer, or

“(2) an amount equal to 23 percent of the excess (if any) of—

“(A) the taxable income of the taxpayer for the taxable year, over

“(B) any net capital gain (as defined in section 1(h)) of the taxpayer for the taxable year.

Oh. Well how bout that? I should be a senator. This is a much better plan. Probably better for DD, too!
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline catastrophe

  • Pak'r Élitaire
  • ****
  • Posts: 15103
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #868 on: December 13, 2017, 05:32:23 PM »
KSUW could be the next Roy Moore.

The Big Train

  • Guest
Taxes (GOP 2017 edition)
« Reply #869 on: December 13, 2017, 07:27:25 PM »
KSUW could be the next Roy Moore.

Theme parks are becoming the next great youngster hangout spot since malls are dying off.

Offline K-S-U-Wildcats!

  • Pak'r Élitaire
  • ****
  • Posts: 10040
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #870 on: December 13, 2017, 07:45:10 PM »
DEAL. With the exception of the Super Special TA Tax Break, everything about the House and Senate's compromise bill sounds even better than before!  :Woot:

https://mobile.nytimes.com/2017/12/13/us/politics/tax-bill-republicans-deal.html

(And they're sticking with the Senate's idea of using a small deduction for pass-throughs, rather than a max rate).
« Last Edit: December 13, 2017, 07:49:57 PM by K-S-U-Wildcats! »
I've said it before and I'll say it again, K-State fans could have beheaded the entire KU team at midcourt, and K-State fans would be celebrating it this morning.  They are the ISIS of Big 12 fanbases.

Offline Dugout DickStone

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 51305
  • BSPAC
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #871 on: December 13, 2017, 09:16:37 PM »
W is more liberal than me.  These are strange times guys

Offline sys

  • Contributor
  • Pak'r Élitaire
  • *****
  • Posts: 40472
  • your reputation will never recover, nor should it.
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #872 on: December 14, 2017, 12:19:44 AM »
shareholders of c corps are subject to double taxation.  this is mitigated by the ability of c corps to retain earnings (deferring second taxation) and because both dividends from c corps and cap gains are subject to lower rates than ordinary income.

anything can be an s corp.  i have a guy at work who tells me almost every day that i should turn myself into an s corp.  "shareholders" in an s corp pay tax on profits as ordinary income.  the tax break is that they don't have to pay payroll taxes.  that's why people turn themselves into s corps, to pay themselves a wage that is less than their profit and only pay payroll taxes on the wage part of their profit.


the pass through tax breaks are pretty much a huge scam that r johnson and his ilk assume people are too dumb to figure out because americans instinctively hate big businesses (c corps) and fellate small businesses (pass throughs).  99.9% of pass throughs aren't comparable to c corps, they're comparable to wage earners. 
"experienced commanders will simply be smeared and will actually go to the meat."

Offline catastrophe

  • Pak'r Élitaire
  • ****
  • Posts: 15103
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #873 on: December 14, 2017, 07:02:40 AM »
Sys, you’re usually pretty good at this, but there are a couple pretty bad takes in the above.

Offline sys

  • Contributor
  • Pak'r Élitaire
  • *****
  • Posts: 40472
  • your reputation will never recover, nor should it.
    • View Profile
Re: Taxes (GOP 2017 edition)
« Reply #874 on: December 14, 2017, 08:40:59 AM »
there's always a chance that i'm wrong, but it's far more likely that you are.
"experienced commanders will simply be smeared and will actually go to the meat."