PDA

View Full Version : How occutards see the world.



LWW
08-12-2012, 08:21 AM
Using current tax rates.

A thirty five year old plumber starts with a truck and some tools and quits his job to start hs own business.

Over the next thirty years he grows it from a garage and a truck into twenty trucks and a ten thousand square foot building ... employing twenty drivers, two people in the parts department and three in the office.

Their average salary is $40K ... or $1M annually.

At 10% to the IRS, 12.4% FICA and 2.9% MEDICARE ... which means his business generates $253K just in federal taxes.

Now, the owner himself earns another $500K in his last year before retiring. At 25% plus 12.4% plus 2.9% ... he pays another $201.5K in federal taxes.

Put simply ... of the $1.5M in wealth generated that year, the feds took $454.5K, or a little over 30%.

Now, at age 66 he takes his company valued at $5M ... buildings, tools, vehicles and equipment paid for with after tax dollars ... and sells the business.

Over his working career he has also invested in tax free gubmint bonds, helping the gubmint finance it's massive debt, and accumulated $5M in bond assets.

During ths first year of retirement his bonds pay him $150K per year, plus a $2.5M profit from the business.

Even though the business was built with after tax profits, he is taxed another $250K.

A sensible person looks at this and says the plumber is an outstanding citizen.

The occutard sees a guy who paid, using half the the last year as a 30 year average, generated roughly $6.8M in federal tax revenue to obtain his $7.5M net worth ... $15K per year for the rest of his life ... plus watching the state swallow another chunk upon his demise ... and screechs:

"YOU DIDN'T BUILD THAT ... AND YOUR TAX PERCENTAGE THIS YEAR IS LESS THAN A SECRETARY" and wants him punished.

Soflasnapper
08-12-2012, 03:02 PM
This is wrong in several different ways that more than cut your figures in half, because you apparently do not really understand accounting or taxes.

Start with your claim that the business was built with after-tax dollars. No it wasn't. It may have been started with them, but a going concern finances investment in equipment and current expenses with pre-tax dollars (which are mainly wholly deductible from the business gross income figure). (See: capitalism.)

Moreover, you are missing the real point, which is most critical in the discussion.

There is nothing sacred about current tax rates that date back only to 2003. In fact, when they were put in, they were scheduled to sunset back to the status quo ante as of 2010 (or before). All of them.

The tax treatment BEFORE 2000 yielded the greatest economic boom in US history, generating hundred billion dollar plus annual surpluses, paying down the publicly held national debt by $450 billion or so, resulting in a sub-4% UE-3 rate.

Now, under this tax rate regime, things are about 180 degrees reversed from those halcyon days. And we are forced to consider substantial cuts from programs that benefit the non-rich, and/or have the higher brackets set back at the previous rates, as a direct tradeoff.

Framed properly in this way, the question is why the rate cuts that were ineffective at doing their supposed economic miracle work MUST be kept in place (although yielding such a poor result), requiring still further cuts and deprivation to the non-wealthy, so that those best off can have an extra 4% off their top marginal income tax rate (or their preferred interest, dividend and cap gain rate, at about half the rate under Reagan's '86 tax reform).

Stretch
08-12-2012, 03:13 PM
Start taking notes Larry. /forums/images/%%GRAEMLIN_URL%%/grin.gif St.

LWW
08-12-2012, 03:40 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">This is wrong in several different ways that more than cut your figures in half, because you apparently do not really understand accounting or taxes.

Start with your claim that the business was built with after-tax dollars. No it wasn't. It may have been started with them, but a going concern finances investment in equipment and current expenses with pre-tax dollars (which are mainly wholly deductible from the business gross income figure). (See: capitalism.) <span style="color: #3333FF">MEANING AFTER TAX DOLLARS</span>

Moreover, you are missing the real point, which is most critical in the discussion.

There is nothing sacred about current tax rates that date back only to 2003. In fact, when they were put in, they were scheduled to sunset back to the status quo ante as of 2010 (or before). All of them. <span style="color: #3333FF">THANKS. A HIGHER TAX RATE IMPROVES MY ANALOGY AND MAKES THE OCCUTARD POSITION, WELL, EVEN MRE OCCUTARDED</span>

The tax treatment BEFORE 2000 yielded the greatest economic boom in US history, generating hundred billion dollar plus annual surpluses, paying down the publicly held national debt by $450 billion or so, resulting in a sub-4% UE-3 rate. <span style="color: #3333FF">THAT CLAIM IS A COMMON OCCUTARD LIE ... AND FURTHERMORE CHANGES NOTHING IN MY CLAIM</span>

Now, under this tax rate regime, things are about 180 degrees reversed from those halcyon days. And we are forced to consider substantial cuts from programs that benefit the non-rich, and/or have the higher brackets set back at the previous rates, as a direct tradeoff. <span style="color: #3333FF">BRAVO SIERRA AND IRRELEVANT TO THE POINT IN DISCUSSION</span>

Framed properly in this way, the question is why the rate cuts that were ineffective at doing their supposed economic miracle work MUST be kept in place (although yielding such a poor result), requiring still further cuts and deprivation to the non-wealthy, so that those best off can have an extra 4% off their top marginal income tax rate (or their preferred interest, dividend and cap gain rate, at about half the rate under Reagan's '86 tax reform). <span style="color: #3333FF">ALSO BOTH INACCURATE AND IRRELEVANT</span>


</div></div>

Next shameless defense of the regime?

LWW
08-12-2012, 03:41 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Stretch</div><div class="ubbcode-body">Start taking notes Larry. /forums/images/%%GRAEMLIN_URL%%/grin.gif St. </div></div>

Oh, I did ... It's a shame you didn't.

Soflasnapper
08-12-2012, 09:08 PM
Now, the owner himself earns another $500K in his last year before retiring. At 25% plus 12.4% plus 2.9% ... he pays another $201.5K in federal taxes.

Here you reveal your ignorance of the FICA tax.

The FICA tax is capped to only apply to the first $104k, and does not apply to the whole $500k. Rounding a bit, if you wanted to make this claim, you should have said 3.1% (of that total), not 12.4% (that is, 25% of the rate you claimed, because only approx. 25% of that income is subject to the tax).

Even that is a gross error, because for a long time now, small business don't file C-Corp status, but either sub-chapter S status, LLC status, etc.

That eliminates FICA and MC tax levies on corporate profits sent through to the owner altogether.

You've also claimed that the taxes this man's EMPLOYEES pay are paid by him. That's not true. The corporation does pay the FICA/MC match, half the figures you cite on that measure, and none of the FIT figures you cite (which are paid by the workers).

Upon sale of the company, NONE of the money he put into it is taxable (it becomes his basis, and counts as being simply returned to him). Anything over the basis is taxed at capital gains rates.

US Treasuries' paid interest is not free of federal income tax charge, so his purchase of tax free bonds did NOT serve to finance the massive debt. Generally speaking, most such bond purchases are done in the secondary, after market setting, FROM OTHER INVESTORS, so it doesn't finance ANYTHING. Only if the purchase were at the original auction would his purchase of such bonds go to pay for something, but in the case you describe, it would be cities or counties bond issues (which are the only ones that are free of FIT on their proceeds).

Qtec
08-13-2012, 01:38 AM
Why don't you do the same analysis on Romney? How much did Romney make while he was unemployed?

Should a guy who works day in and day out actually doing something, be taxed at a higher rate than some who earns their money sitting on their ass?

As Romney has shown, the mega rich make their money by exploiting the tax code. Its a scam and its not good for the economy.

Q

LWW
08-13-2012, 03:29 AM
Good catch on te FICA ... but it' doesn't change te overall point, which has again escaped you.

LWW
08-13-2012, 03:30 AM
The anlysis applied to MR would be even more convincing of how whacked the Occutard thinking is.

The rest of your rant merely reinforces that you have no clue what you are talking about.

Qtec
08-13-2012, 03:39 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The anlysis applied to MR would be even more convincing of how whacked the Occutard thinking is. </div></div>

Love to hear it.

Q

LWW
08-13-2012, 03:52 AM
Easy ... anyoe who beleves that MR accumulating a net worth of $250M idn't create a similar amount of federal revenue is a fool.

To explain it at a deeper level requires that younknowwhat a capital gain actually is. You don't. When you do, get back with me.

Qtec
08-13-2012, 04:02 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">Easy ... anyoe who beleves that MR accumulating a net worth of $250M idn't create a similar amount of federal revenue is a fool.

To explain it at a deeper level requires that younknowwhat a capital gain actually is. You don't. When you do, get back with me. </div></div>

LOL

If Romney paid so much tax, why doesn't he release his tax returns and PROVE to us all how much tax he paid. Eh????????
It would be sooooooooooooo simple.

Anyone who thinks Mitt is only worth 250$ M is an idiot.

Q

Qtec
08-13-2012, 04:03 AM
You seem to know a lot about this. /forums/images/%%GRAEMLIN_URL%%/crazy.gif

Q. How much tax did Mitt pay on the 100Million that he has in his IRS?

Q

LWW
08-13-2012, 04:27 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Qtec</div><div class="ubbcode-body">You seem to know a lot about this. /forums/images/%%GRAEMLIN_URL%%/crazy.gif

Q. How much tax did Mitt pay on the 100Million that he has in his IRS?

Q </div></div>

Actually I do.

If he as it in a regular IRA he paid the top rate on anything over, currently $6K per year, the allowable contribution ... assuming Mitt is 60 ... and the balnc would e taxable as he withdrew it.

I would guess however ... anything beyond the standard IRA limits ... that he has it in a Roth IRA, which would mean it was all taxed at his rate in te beginning nd the end profits would ten be tax exempt.

IOW ... he functioned under te sam laws as everyone else.

Now, in your own words, what is an IRA and what is a ROTH IRA?