Home Forums Hunting & Shooting Hunter's Campfire Help me out regarding Top 1% tax Increase

Someone in the know can you help clarify something for me. I keep hearing that the majority of small business owners will not be affected by the increase in taxes to the top 1%. Well for starters $250,000 and > is this 1% starting point, how is it that most small business owners are not in that bracket? We don't make $250,000 but to me it would seem that most successful small business owners should make pretty darn close to that, so is it that there's enough deductions in owning the business that you don't show on paper that you make that much or do they really not make that much? I can't fathom a successful contractor with 20 craftsmen making decent wages doesn't earn $250k a year himself Someone please enlighten this dumb fireman. Thanks

It's called a marxist fig leaf.

What you think of as small business and what government thinks is small business are two different things. But the truth is there are a bunch of small businesses out there making over a million a year. They are going to look and the big picture and the cost of doing business. Oh and the cost of Obeecare. You are going to see continued downsizing and yes you guessed it outsourcing out of country.

People are going to find ways around the banana republic.

Is it 250L AGI or gross? I assume AGI. In other words, if you are an S corp, it does not matter what your gross is, it matters what your distribution is.

Am I wrong?

For every new $1 they take in they will spend almost $2. Taking in more money means they will just widen the gap even more.

Get spending under control, have some accountability on what you actually do with the money they already get, then and only then can we even begin to talk about sending more money to the federal government to retire our debt.

who can afford to pay more taxes, and still afford to drive Caddillacs, versus those if they had to pay additional taxes were to be forced from a Toyota Sequoia to a toyota corolla?

we don't want to affect anyone's std of living, pray tell?

rich people could pay a ton more, and still eat organic beef steaks every night.

but, is that fair??

What I eat and drive is none of your business or is it the business of the federal government. More people need to key in on that thought.

The profits of an S-corp are taxed as owner income no matter what the owner does with the money - including re-investing to grow the company.

Basically, if the owner pays himself a salary of $100K and re-invests $150K, he's on the hook to pay income taxes on $250K.

They just want to [bleep] the minority.......

THIS!!!!!! It's called freedom. We now think you have to defend your success against some liberal arrogance that says they know when the right amount for you has been reached. Oh yeah and which light bulb, toilet and everything you should have. That is called tyranny.

Right, but if I pay my bills only and then distribute everything else (after paying taxes) and my distribution is below $250K (including my salary), then am I considered over the 250K threshold? In other words, is it gross or AGI that they are talking about.

You better believe that it's going to be on gross income and not AGI.

Guys before you get all twisted up. It's AGI. If you gross 500k and pay 200k for materials and 100k for you labor, you are left with $200k. Then you try to keep shaving it down with more legitimate business expenses. To top it off, you will only pay the newer rates, assuming they pass, on the income above $250k.

Small business owners are quite adept at minimizing income. For example, you can write off close to $90k+ with a self employment retirement IRA for both wife and self. Then you buy yourself a nice new farm truck every few years, plus a new ATV for checking fence & working cows, plus all the depreciation, and actual expenses like your health insurance and out of pocket medical expenses.

I expect they'll extend the Bush-era tax cuts, but renegotiate what is meant by "rich" from $250K (joint return) to $500K or $1M. Mark my word.

Eric

By example only....

Sales = $500K
Cost of Sales = $250K (labor, materials,depreciation (non-cash expenses-replacement, etc..)

Profit = $250K

Taxes = $250x tax rates. (you only tap the top rate on over $250k, so effective rate is blended)

What you take home is $250K less taxes.

Much can be done to "manage" expenses and revenues in a "small" business.

Ak Cub,
This is on a need to know basis. "The Liar" has his top people working on it.......unless they too resigned today. Anyway, the top 1% is a "living and breathing document" like the Constitution. That means they can change the brackets as deemed fit.
Reid announced yesterday that they'll have to raise the debt ceiling another $2.4T by the end of '12 to $18.79Trillion.
That after they just raised it $2.4T in Aug. of 2011.

Hey, the Federal Gov. has bills to pay.

Oh, and check out my link on this topic line for the list of companies that have announced layoffs since "the liar" was re-elected.

The Liar will ask to carve out the middle class. Whatever that means and exempt them from the Bush Tax Rates expiring. The 1%?
Well they are in for a bitter pill to swallow. Look, the government can take ALL the 1% money and it wouldn't run the government for more than a couple of months.

Thanks for the insight guys, it's what I was thinking. I just couldn't understand how it was not gonna affect small businesses hence reduce job growth. It appears there's no way it won't. Couple it with obamacare and I just don't for the life of me understand how odipshit could possibly and truly want to create private sector jobs while putting forth these two plans.it really does seem like economic suicide!

What????? This conversation never led to that conclusion.

Mitt was going to let the rich slide, and take our deductions on student loans, mortgages and health insurance away. Rich people got minimal benefit from those deductions b/c they are capped or the alternative minimum tax would recapture them. Middle class people would have paid an even higher effective tax rate while the rich's declined.

A middle class person can use $5k more than a multi-millionaire can use $500k. The millionaire just tucks it into his property investments or stock portfolio. A middle class person will spend the $5k on his kids or new farm truck.

Rich people don't create job growth. Trickle down is horse crap.

Let me ask you a question, if you were a platoon leader and had two guys you were considering to hump the M60; one was a toothpick and weighed 150 lbs and the other weighed 240 lbs and was built like the Rock, who would you let carry the heavier weight? Wouldn't it be logical for the one who could handle the burden easier to be the one and create a more efficient system?