Lol. Ever heard of supply affecting demand? Or ever seen someone buy an iPhone before they were invented?
You're missing the point, in any event. If production worldwide doubled, everyone would have twice as much crap (on average) as they do now. This is unquestionable.
>>As a fiscally conservative republican/libertarian, i don't give a shit if it's a republican, democrat, or the Pope himself. This spending spree in Washington has got to stop. And the tax code needs to be completely restructured
Indeed. A lot of the reason for that, historically, is that when the government tried to directly regulate the economy under FDR, the Supreme Court slapped him down, saying that price controls and such were unconstitutional. They also sent a private note along with it saying that *taxation* though was perfectly legal, and so the government could control the economy indirectly that way.
That's why our tax code is such a mess - all that legislation gets stuffed into the tax code in order to push our society in the direction Congress or the president want it to go.
But I'm with you. A flat 10% income tax, with no deductions, is probably the best way to go.
As a "system" it falls flat on its face. What happens if EVERYONE who was poor jumped on your bandwagon and started "doing more with their lives and earning as much money as they wish they had"? I mean EVERYONE.
Simple: money is devalued and their buying power stays the same; aka price inflation.
Bzzt. Economics fail.
But don't worry, you're in good company - most liberals don't understand this basic concept.
Imagine an economy in which there are 10 workers making a combined total of only 1 widget a year. At the end of the year, they all get paid an arbitrary amount of money (it doesn't matter how much), but only one of them walks away with the widget. All the rest do without.
Now imagine an economy in which the 10 workers each make 10 widgets a year, a total of 100. At the end of the year, they all get paid (again, the numbers printed on the money don't matter), and they will all end up with an average of 10 widgets each.
They all just got 100 times richer. How did that happen?
The answer: because their real productivity increased. In terms of money, they might all have been making $10/year in the first year, and $1/year in the second, but in real, actual measures of wealth, they all became 100 times wealthier. (Again, the numbers printed on the money don't matter.)
Inflation is what happens when you have extra money chasing the same amount of goods and services around. It does *not* apply when you have increased goods and services. If you could double the output of all factories on the earth, our real per capita wealth would double.
Socialists and liberals have a mental block when it comes to this very simple principle - productivity is *not* a zero-sum game.
>>While I'm not going to enjoy paying the CA sales tax it will at least narrow the gap that makes it so hard for brick and mortar shops to compete
Hey, guess what? If you buy a $2000 TV on Amazon, you owe CA sales tax anyway. It's called Use Tax, because you bought it out of state but used it in California.
The state hasn't been enforcing it for individuals, but it has been on the books since the 1930s. But they've been stepping up enforcement for corporations, so I assume personal Use Tax will be next.
>>You mean the french, that have to buy power from our wind energy, because their bloody plants can't even withstand a summer heat wave and have to be shut down? That nuclear wonderland to our west? Yeah, right... thought so.
Oh, you silly German.
You don't realize your country imports 2/3rds of its energy, do you? Mainly in the form of nuclear energy, from France and the Czech Republic?
I've seen lots of deployed systems that still use text UIs.
Most of the time, the systems work just fine. When they try upgrading the systems, the companies spend millions and often end up with a product worse than what they had before.
>>I do not believe that this will address hunger in the world. Rather, it will simply push the price of food up so high that it will become impossible for the poor to eat. We'll have mass starvation like never before.
How would increased agricultural production translate into higher prices? Historically speaking, increased yields have resulted in dramatic drops in food prices.
Currently, we have the ethanol scam propping up corn prices at about twice what they should be. If you're concerned about high food prices making it hard for the poor to buy food, you should probably start there. Hell, even China outlawed corn ethanol last year.
>>Not just a little more, immensely more, astronomically more, and that absolutely and unequivocally IS socially toxic to society.
No, it's not. Besides socialists like yourself, most people in America (70%, according to the Economist today) believe in the Free Market system. Free Market Capitalism intrinsically means that some people will make more money than others. My wife was thinking about become a doctor, but realized the stress of medical school would be bad for her health. So she went into pharmacy school instead, and *absolutely does not begrudge the fact that doctors make more money than her*. I went to school in the ghetto, and never once heard someone complain that doctors make too much money, or that NBA players make more than their "fair" share. In fact, it was quite the opposite. The poor are glad those opportunities exist, and know that even if they can't make it themselves (especially in the case of immigrants), they can raise their kids to the next level.
Contrast it with social mobility in the Soviet Union some time.
>>And you keep defending the rich by saying it's not personal income it's corporate income.
No, I'm saying that "income inequality" is one of the stupidest statistical measures ever invented, and that anyone using it is automatically discounted from being a member of intelligent society. It's an apples to oranges comparison. As I said, it's like saying that middle schoolers are shorter now than ever before because NBA players have gotten taller.
>>You're close to arguing that rich people don't exist, only wealthy corporations, which would be absurd.
For one thing, rich and wealthy are two different things. Rich is generally defined these days as making $250k or over a year. Wealthy is generally defined as having over $1M in assets. (Pick whichever benchmarks you'd like, though.)
And I am indeed arguing that very few people become rich or wealthy without drawing on corporate income, and that when you discount 1120 income and just look at W-2 income, a lot of your imagined income inequality vanishes.
>>Inequality is a huge problem and it's getting worse, fortunately the solutions are well known, tested and proven in many other countries, and could be implemented tomorrow if the political will was there.
Yes, it is called "becoming like France", and the cure would be worse than the problem.
>>this is the beginning of the end of nuclear power in japan. maybe the usa. probably europe
Lord, let's certainly hope not. You honestly expect France to transition away from nuclear power generation? Germany looks like it might, but that just means that it'll have to buy more power from France, which... comes from nuclear power.
But the beginning of the end in the USA was TMI. If we'd continued building nuclear plants here, we could have phased out coal and NG a long time ago, and have half the CO2 emissions we have now. Which far beyond any CO2 savings proposed by bullshit plans like Kyoto or other Cap and Trade schemes - note the difference between "cap" and "50% reduction".
Nuclear fearmongers like you should all be forced to live next to a coal power plant for a year. (I kid, I kid.)
I do understand what you are saying. You think that massive and increasing inequality is acceptable as long as there is a rising standard of living (as measured in various ways) for everyone. I reject this idea. EVEN IF the poor are better off than they used to be (which I am not convinced of either), it's still not acceptable to me that so much wealth is in the hands of so few. Even if the poorest person lived like a millionaire but there were people making 1000x that I'd still find that situation unacceptable. Such massive inequality is socially toxic all by itself, regardless of relative differences and increases in wealth and standards of living.
It's obvious you don't understand what I'm saying. Which is this: income inequality *does not matter*. People use it to substitute for statistics on "the health of the middle class" or "the poor get poorer", but it literally doesn't mean anything, as it is comparing corporate income against personal income. Apples and oranges.
Imagine if I created the 'Shaka Statistic' that compared the height of NBA players against middle schoolers over time, and used that as evidence that middle schoolers were more malnourished now than ever before (because NBA players have gotten taller). It is nonsense.
If you were against a world where all the poor could live like millionaires, in a world that had a few billionaires... then you hate the poor. I'm sorry. But professing to care for the poor while wanting their lives to be worse off is both cruel and hypocritical.
And there is nothing inherently "socially toxic" about some people making more than others.
>>Whenever I'm personally inconvenienced by some health issue or other, I often recall that meeting. And then I stop complaining abount my own lot in life.
My great-grandfather used to suffer from terrible gout. According to my grandmother, whenever he was feeling sorry for himself, he'd go out to the sidewalk and stand there, edge digging right on the painful joint, until he saw someone more unfortunate than himself walk by.
Of course, that was around 1900, where people missing arms and legs were a bit more common, but damn.
>>I doubt they'd be able to pass a modern test either.
Still. While they don't teach Latin or Greek very commonly these days, we should still be able to pass the history and algebra problems. The math seemed pretty straightforward, with just a lot of gruntwork because you wouldn't have a calculator. The history doesn't seem terribly difficult, otherwise. Though, also, a lot of the questions are based on having read The Anabasis (the question about "The ten thousand" which I was fortunate enough to have read back in November), stories about Rome and the Punic Wars (Hannibal crossed through Transalpine and Cisalpine Gaul on his march against Rome, and picked up a lot of Gaulish allies there), Leonidas (the 300!), comparing Athens vs. Sparta (trivial), Pericles (the famous orator), and so forth.
All stuff that would be fairly easy to answer if you'd spent four years studying Latin and Greek, as you always absorb history and stories alongside a language.
>>One of the extra benefit of being a corporation is that, when the business fails, the owners can just walk away from the bills.
I'm pretty sure that's baked into the 50 cents a kilowatt hour we're paying for power, and has nothing to do with the 1.5% bonus taxes you get to pay for being a S-Corp. Do you honestly expect the state reimburses PG&E when someone goes bankrupt?
Your argument begs an obvious question: If things are so terrible, why did you (or the company's founders) choose to set up as an S-Corp? I wouldn't presume to guess at your particular reasons, but choosing the structure of a company is a set of trade-offs between protecting yourself from liability, providing a means to raise outside investment, giving the owners and employees a way of sharing profits, addressing tax issues, and so on. Setting aside the tax _rates_ for a moment, the tax _code_ is mostly designed to allow people to set up companies that address those kinds of issue while stopping people from avoiding paying taxes using the same mechanisms.
So, to take a small example, a small businessperson might think it's worth paying California $800 a year to limit their personal liability from their business's operations. They could choose not to limit my liability by operating as a sole proprietor and save the $800.
Much as we like to moan about these things (don't get me started on how self-employment taxes punish small businesses), as a business owner one does get to choose how one is incorporated and taxed, which does have its benefits. Once you've made those choices, you do have to accept the trade-offs, I think.
Protection from liability, partial ownership, a bit of status from being called a corporation. We knew about the $800/year we'd be paying for it. I didn't know it was either 1.5% or $800 (though that's a mea culpa). However, the retroactive Use Tax scam came out of left field. Because the state hadn't been enforcing it, nobody really knew about it or cared about it. I knew we'd have to run payroll, which is an additional headache and expense, but having a paperwork trail is worth it to me.
Is protection from liability worth $800/year? I don't particularly think so, especially since we have to pay about $800 a year (additionally) to the Hartford for $2M worth of liability insurance.
All told, it's worth it for us to stay as an S-Corp. My sister will probably close her corporation, though, due to the fees and headaches, and just go back to being a sole proprietor.
>>My taxes were really $250,000 on $100,000 in income
Yeah, yeah.
Funny story though, when a friend of mine got audited, the IRS claimed he owed exactly that much tax on a little bit more than that in income.
The auditor was so lazy, she just tallied up all of his deposits across all of his accounts to determine his income. Not realizing that most of it was him shuffling money between accounts and banks trying to maximize his interest rate.
>>I believe that there is an error in your post. The shareholders pay capitol gains taxes on the money which passes to them. Capitol gains taxes are significantly lower than income taxes.
What was the error? The problem with C-corps is exactly the problem of double taxation. It's why we incorporated as an S-Corp. I didn't specify which taxes were paid in each case.
>>That being said I am all for the removal of BOTH corporate and capitol gains taxes in favor of income taxes alone.
Short term ( 1 year) capital gains are taxed at your normal income tax rate. Long term capital gains rate are being raised from 15% to 20% in 2013 (lower for people in lower income tax brackets). They need to be a little bit lower in order to account for inflation.
>>An AC without details asserting some percentage is more likely lying by having taken some calculator like that and just calculating the worst case.
Oh, worst case would be a lot worse. I didn't include property taxes, local tax assessments, business tax, fees (pay $800 a year minimum to run a corporation in CA), capital gains, penalties, Use Tax, etc. I was just making the point that losing 40% from your salary in taxes isn't especially extraordinary.
Two rich family members dying in a row can trigger an over 100% tax assessment on assets.
>>Real people invest in things like 401(k)s and such that reduce taxes.
Retirement plans don't reduce taxes, they defer taxes. So they don't count.
>>Or have families
Slashdot.
>>Or mortgages with lots of deductible interest.
Property taxes offset a lot of the supposed benefit.
Anyhow, the point is, we're taxed plenty. The government should be able to make do with the money it takes in.
This should be modded up, but I'll reiterate it since the poster was an AC. The parent wanted to gain the ability to claim business expenses. Having been an S-corp myself, I know the hassle of filing quarterly taxes and then doing personal on top of it. But I still came out ahead. I love the concept of an S-corp. I love that I get business expense deductions, not to mention the limited personal liability in the advent of my company being sued. I wouldn't say California is not business friendly. Many businesses thrive in California. I will accept some alternative reasons though such as: life is hard, paying taxes is a bitch no matter where you live, things cost more in California, and my favorite the Franchise Tax Board seems to be run by incompetent monkeys that really make the experience rougher than it has to be.
You can claim business expenses even as a sole proprietor or partnership, that wasn't an issue. We were a partnership for years before incorporating.
It's not just the FTB, though we've had to deal with idiots from there from time to time - the retroactive Use Tax scam was from the Board of Equalization.
Compared with other states, California is pretty business unfriendly. If we had more money, we'd probably set up shop in Nevada, like Microsoft.
>>Yes, but in no other state will simple inaction or bad record keeping automatically double the sales tax you are supposed to pay.
More than double. They charge you late penalties and punitive penalties on the Use Tax you failed to pay. Cumulative across four years, it can be quite a bit. You can appeal to have the punitive penalties waived, but not the late fees.
I have records of every transaction for my corporation, but my accountant didn't record if I'd paid CA sales tax on each transaction or not (since it didn't matter), which meant I had the fun of going back through years of receipts and tossing them into two separate piles.
>>The corporation ON TOP OF THAT, pay a corp tax to pay for the ADDITIONAL burden they pause on the local utility or governement services.
Bullshit. Corporations pay for their additional burden on local utilities... by paying for the extra utilities. At power rates in California about 5x higher than the US average. Due to the way power is tiered in California, it means you get the privilege of paying around 50c/kWh for power.
Local government services? The state mails out some form letters, and does everything else on its web site. When you file your statement of information (the only real interface you have with the state), they charge you separately for that. The 1.5%/$800 minimum tax on corporations is just a squeeze.
>>The existence of a corporation is supposed to be contingent on the public good.
I think keeping a thousand people employed in your city is a public good, right?
>>Leash the damn corporations already and stop this race to the bottom.
Leash the tax-hungry legislators that caused this mess to begin with.
The controversy was over the extra-special 1.5% of *expenses* "San Francisco Tax" Twitter would be paying over what they'd pay if they relocated 45 minutes south to San Jose. Hopefully the SF city council will realize that their hostile environment to businesses is bad for the city as a whole, and repeal the damn law.
Slashdot Mirror
>>Demand drives modern economies, not supply.
Lol. Ever heard of supply affecting demand? Or ever seen someone buy an iPhone before they were invented?
You're missing the point, in any event. If production worldwide doubled, everyone would have twice as much crap (on average) as they do now. This is unquestionable.
>>Ehm, if you are going to describe a self-subsistance system why would you even introduce the concept of money?
To explain the difference between inflation and actual production gains.
If everyone in the world worked twice as hard (producing twice as many goods), we'd all be twice as wealthy (in reality).
By contrast, if the governments printed twice as much money, we'd have twice the wealth on paper, but be no more wealthy in reality.
>>You just swept under the carpet all the complications that make economics a still unsolved problem.
The concept is not really that hard to understand.
>>The only thing I don't understand is why the guy waited so long to sue
Yeah. It might cost him any hope of winning, too:
http://en.wikipedia.org/wiki/Laches_(equity)
>>As a fiscally conservative republican/libertarian, i don't give a shit if it's a republican, democrat, or the Pope himself. This spending spree in Washington has got to stop. And the tax code needs to be completely restructured
Indeed. A lot of the reason for that, historically, is that when the government tried to directly regulate the economy under FDR, the Supreme Court slapped him down, saying that price controls and such were unconstitutional. They also sent a private note along with it saying that *taxation* though was perfectly legal, and so the government could control the economy indirectly that way.
That's why our tax code is such a mess - all that legislation gets stuffed into the tax code in order to push our society in the direction Congress or the president want it to go.
But I'm with you. A flat 10% income tax, with no deductions, is probably the best way to go.
Bzzt. Economics fail.
But don't worry, you're in good company - most liberals don't understand this basic concept.
Imagine an economy in which there are 10 workers making a combined total of only 1 widget a year. At the end of the year, they all get paid an arbitrary amount of money (it doesn't matter how much), but only one of them walks away with the widget. All the rest do without.
Now imagine an economy in which the 10 workers each make 10 widgets a year, a total of 100. At the end of the year, they all get paid (again, the numbers printed on the money don't matter), and they will all end up with an average of 10 widgets each.
They all just got 100 times richer. How did that happen?
The answer: because their real productivity increased. In terms of money, they might all have been making $10/year in the first year, and $1/year in the second, but in real, actual measures of wealth, they all became 100 times wealthier. (Again, the numbers printed on the money don't matter.)
Inflation is what happens when you have extra money chasing the same amount of goods and services around. It does *not* apply when you have increased goods and services. If you could double the output of all factories on the earth, our real per capita wealth would double.
Socialists and liberals have a mental block when it comes to this very simple principle - productivity is *not* a zero-sum game.
>>While I'm not going to enjoy paying the CA sales tax it will at least narrow the gap that makes it so hard for brick and mortar shops to compete
Hey, guess what? If you buy a $2000 TV on Amazon, you owe CA sales tax anyway. It's called Use Tax, because you bought it out of state but used it in California.
http://www.boe.ca.gov/sutax/sutprograms.htm
The state hasn't been enforcing it for individuals, but it has been on the books since the 1930s. But they've been stepping up enforcement for corporations, so I assume personal Use Tax will be next.
http://en.wikipedia.org/wiki/Economy_of_Germany
>>You mean the french, that have to buy power from our wind energy, because their bloody plants can't even withstand a summer heat wave and have to be shut down? That nuclear wonderland to our west? Yeah, right... thought so.
Oh, you silly German.
You don't realize your country imports 2/3rds of its energy, do you? Mainly in the form of nuclear energy, from France and the Czech Republic?
http://economicsnewspaper.com/policy/spain/germany-doubled-its-imports-of-nuclear-energy-from-france-9106.html
But hey, let me know how that wind power thing works out for you.
I've seen lots of deployed systems that still use text UIs.
Most of the time, the systems work just fine. When they try upgrading the systems, the companies spend millions and often end up with a product worse than what they had before.
>>I do not believe that this will address hunger in the world. Rather, it will simply push the price of food up so high that it will become impossible for the poor to eat. We'll have mass starvation like never before.
How would increased agricultural production translate into higher prices? Historically speaking, increased yields have resulted in dramatic drops in food prices.
Currently, we have the ethanol scam propping up corn prices at about twice what they should be. If you're concerned about high food prices making it hard for the poor to buy food, you should probably start there. Hell, even China outlawed corn ethanol last year.
>>Not just a little more, immensely more, astronomically more, and that absolutely and unequivocally IS socially toxic to society.
No, it's not. Besides socialists like yourself, most people in America (70%, according to the Economist today) believe in the Free Market system. Free Market Capitalism intrinsically means that some people will make more money than others. My wife was thinking about become a doctor, but realized the stress of medical school would be bad for her health. So she went into pharmacy school instead, and *absolutely does not begrudge the fact that doctors make more money than her*. I went to school in the ghetto, and never once heard someone complain that doctors make too much money, or that NBA players make more than their "fair" share. In fact, it was quite the opposite. The poor are glad those opportunities exist, and know that even if they can't make it themselves (especially in the case of immigrants), they can raise their kids to the next level.
America has higher social mobility rates than socialists can wrap their tiny brains around. There's a pretty nice interactive data browser you can view here: http://www.nytimes.com/pages/national/class/index.html
Contrast it with social mobility in the Soviet Union some time.
>>And you keep defending the rich by saying it's not personal income it's corporate income.
No, I'm saying that "income inequality" is one of the stupidest statistical measures ever invented, and that anyone using it is automatically discounted from being a member of intelligent society. It's an apples to oranges comparison. As I said, it's like saying that middle schoolers are shorter now than ever before because NBA players have gotten taller.
>>You're close to arguing that rich people don't exist, only wealthy corporations, which would be absurd.
For one thing, rich and wealthy are two different things. Rich is generally defined these days as making $250k or over a year. Wealthy is generally defined as having over $1M in assets. (Pick whichever benchmarks you'd like, though.)
And I am indeed arguing that very few people become rich or wealthy without drawing on corporate income, and that when you discount 1120 income and just look at W-2 income, a lot of your imagined income inequality vanishes.
>>Inequality is a huge problem and it's getting worse, fortunately the solutions are well known, tested and proven in many other countries, and could be implemented tomorrow if the political will was there.
Yes, it is called "becoming like France", and the cure would be worse than the problem.
>>this is the beginning of the end of nuclear power in japan. maybe the usa. probably europe
Lord, let's certainly hope not. You honestly expect France to transition away from nuclear power generation? Germany looks like it might, but that just means that it'll have to buy more power from France, which... comes from nuclear power.
But the beginning of the end in the USA was TMI. If we'd continued building nuclear plants here, we could have phased out coal and NG a long time ago, and have half the CO2 emissions we have now. Which far beyond any CO2 savings proposed by bullshit plans like Kyoto or other Cap and Trade schemes - note the difference between "cap" and "50% reduction".
Nuclear fearmongers like you should all be forced to live next to a coal power plant for a year. (I kid, I kid.)
It's obvious you don't understand what I'm saying. Which is this: income inequality *does not matter*. People use it to substitute for statistics on "the health of the middle class" or "the poor get poorer", but it literally doesn't mean anything, as it is comparing corporate income against personal income. Apples and oranges.
Imagine if I created the 'Shaka Statistic' that compared the height of NBA players against middle schoolers over time, and used that as evidence that middle schoolers were more malnourished now than ever before (because NBA players have gotten taller). It is nonsense.
If you were against a world where all the poor could live like millionaires, in a world that had a few billionaires... then you hate the poor. I'm sorry. But professing to care for the poor while wanting their lives to be worse off is both cruel and hypocritical.
And there is nothing inherently "socially toxic" about some people making more than others.
>>Whenever I'm personally inconvenienced by some health issue or other, I often recall that meeting. And then I stop complaining abount my own lot in life.
My great-grandfather used to suffer from terrible gout. According to my grandmother, whenever he was feeling sorry for himself, he'd go out to the sidewalk and stand there, edge digging right on the painful joint, until he saw someone more unfortunate than himself walk by.
Of course, that was around 1900, where people missing arms and legs were a bit more common, but damn.
>>I doubt they'd be able to pass a modern test either.
Still. While they don't teach Latin or Greek very commonly these days, we should still be able to pass the history and algebra problems. The math seemed pretty straightforward, with just a lot of gruntwork because you wouldn't have a calculator. The history doesn't seem terribly difficult, otherwise. Though, also, a lot of the questions are based on having read The Anabasis (the question about "The ten thousand" which I was fortunate enough to have read back in November), stories about Rome and the Punic Wars (Hannibal crossed through Transalpine and Cisalpine Gaul on his march against Rome, and picked up a lot of Gaulish allies there), Leonidas (the 300!), comparing Athens vs. Sparta (trivial), Pericles (the famous orator), and so forth.
All stuff that would be fairly easy to answer if you'd spent four years studying Latin and Greek, as you always absorb history and stories alongside a language.
>>One of the extra benefit of being a corporation is that, when the business fails, the owners can just walk away from the bills.
I'm pretty sure that's baked into the 50 cents a kilowatt hour we're paying for power, and has nothing to do with the 1.5% bonus taxes you get to pay for being a S-Corp. Do you honestly expect the state reimburses PG&E when someone goes bankrupt?
Protection from liability, partial ownership, a bit of status from being called a corporation. We knew about the $800/year we'd be paying for it. I didn't know it was either 1.5% or $800 (though that's a mea culpa). However, the retroactive Use Tax scam came out of left field. Because the state hadn't been enforcing it, nobody really knew about it or cared about it. I knew we'd have to run payroll, which is an additional headache and expense, but having a paperwork trail is worth it to me.
Is protection from liability worth $800/year? I don't particularly think so, especially since we have to pay about $800 a year (additionally) to the Hartford for $2M worth of liability insurance.
All told, it's worth it for us to stay as an S-Corp. My sister will probably close her corporation, though, due to the fees and headaches, and just go back to being a sole proprietor.
>>My taxes were really $250,000 on $100,000 in income
Yeah, yeah.
Funny story though, when a friend of mine got audited, the IRS claimed he owed exactly that much tax on a little bit more than that in income.
The auditor was so lazy, she just tallied up all of his deposits across all of his accounts to determine his income. Not realizing that most of it was him shuffling money between accounts and banks trying to maximize his interest rate.
(And no, he didn't end up paying $250k.)
>>I believe that there is an error in your post. The shareholders pay capitol gains taxes on the money which passes to them. Capitol gains taxes are significantly lower than income taxes.
What was the error? The problem with C-corps is exactly the problem of double taxation. It's why we incorporated as an S-Corp. I didn't specify which taxes were paid in each case.
>>That being said I am all for the removal of BOTH corporate and capitol gains taxes in favor of income taxes alone.
Short term ( 1 year) capital gains are taxed at your normal income tax rate. Long term capital gains rate are being raised from 15% to 20% in 2013 (lower for people in lower income tax brackets). They need to be a little bit lower in order to account for inflation.
>>boo fucking hoo.
Thanks, Jerry Brown. :p
>>An AC without details asserting some percentage is more likely lying by having taken some calculator like that and just calculating the worst case.
Oh, worst case would be a lot worse. I didn't include property taxes, local tax assessments, business tax, fees (pay $800 a year minimum to run a corporation in CA), capital gains, penalties, Use Tax, etc. I was just making the point that losing 40% from your salary in taxes isn't especially extraordinary.
Two rich family members dying in a row can trigger an over 100% tax assessment on assets.
>>Real people invest in things like 401(k)s and such that reduce taxes.
Retirement plans don't reduce taxes, they defer taxes. So they don't count.
>>Or have families
Slashdot.
>>Or mortgages with lots of deductible interest.
Property taxes offset a lot of the supposed benefit.
Anyhow, the point is, we're taxed plenty. The government should be able to make do with the money it takes in.
You can claim business expenses even as a sole proprietor or partnership, that wasn't an issue. We were a partnership for years before incorporating.
It's not just the FTB, though we've had to deal with idiots from there from time to time - the retroactive Use Tax scam was from the Board of Equalization.
Compared with other states, California is pretty business unfriendly. If we had more money, we'd probably set up shop in Nevada, like Microsoft.
>>Yes, but in no other state will simple inaction or bad record keeping automatically double the sales tax you are supposed to pay.
More than double. They charge you late penalties and punitive penalties on the Use Tax you failed to pay. Cumulative across four years, it can be quite a bit. You can appeal to have the punitive penalties waived, but not the late fees.
I have records of every transaction for my corporation, but my accountant didn't record if I'd paid CA sales tax on each transaction or not (since it didn't matter), which meant I had the fun of going back through years of receipts and tossing them into two separate piles.
>>The corporation ON TOP OF THAT, pay a corp tax to pay for the ADDITIONAL burden they pause on the local utility or governement services.
Bullshit. Corporations pay for their additional burden on local utilities... by paying for the extra utilities. At power rates in California about 5x higher than the US average. Due to the way power is tiered in California, it means you get the privilege of paying around 50c/kWh for power.
Local government services? The state mails out some form letters, and does everything else on its web site. When you file your statement of information (the only real interface you have with the state), they charge you separately for that. The 1.5%/$800 minimum tax on corporations is just a squeeze.
>>The existence of a corporation is supposed to be contingent on the public good.
I think keeping a thousand people employed in your city is a public good, right?
>>Leash the damn corporations already and stop this race to the bottom.
Leash the tax-hungry legislators that caused this mess to begin with.
The controversy was over the extra-special 1.5% of *expenses* "San Francisco Tax" Twitter would be paying over what they'd pay if they relocated 45 minutes south to San Jose. Hopefully the SF city council will realize that their hostile environment to businesses is bad for the city as a whole, and repeal the damn law.