http://abcnews.go.com/Politics/wireStory?id=790711
“”We should not cut the benefits of any law-abiding retiree by one dime or raise the taxes of any law-abiding worker by one dime until we have done our best to ensure that all taxpayers are complying with the current tax laws,” said Sen. Max Baucus of Montana, the top Democrat on the Senate Finance Committee.
J. Russell George, the Treasury Department’s inspector general for taxation, told lawmakers that the government loses billions of dollars annual because businesses avoid paying the employment taxes that fund Social Security and Medicare.
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The committee chairman, Sen. Charles Grassley, said some proposals to collect unpaid taxes or expand the reach of employment taxation might be too difficult to pass.
He said lawmakers should not be too optimistic about tax collections and view such proposals as “ripe fruit on the ground waiting to be picked up.”
Businesses organized as sole proprietorships pay employment tax on all reported profits. Businesses organized as S corporations pay tax only on the amount described as salary.
George said these S corporations have become a multibillion-dollar employment tax shelter for single-owner businesses.
“Determination of a salary is unilateral, highly subjective and influenced by the knowledge that a higher salary will result in higher employment taxes and therefore lower profits,” George said in his report.
The auditors studied tax returns filed by businesses for 2000. They found that 79 percent of S corporations were owned entirely or mostly by a single person. The government would have collected $5.7 billion more in taxes if those businesses were organized differently and paid employment tax on their income.
“I’m very troubled about the fact that a substantial number of extremely wealthy people aren’t contributing their share,” said Sen. Ron Wyden, D-Ore. “They are what I call the Social Security scofflaws.” “
“George Yin, chief of staff for the Joint Committee on Taxation, offered other suggestions for collecting more employment taxes.
Eliminating the $90,000 cap for taxable wages would raise $1.2 trillion over a decade, Yin said.
If Congress applied the tax to 90 percent of wages paid, as lawmakers have done in the past, it would effectively raise the cap from $93,000 to $170,000 next year and bring in $578 billion over a decade.
The government also could consider applying employment taxes to more worker benefits, such as health insurance, dependent care assistance and transit benefits, or they could reconsider the taxation of students or state and local government employees, Yin said. “
Replies
Another Democrat who wants to raise taxes.
Suppose I own a Sub S Corp and hire someone to run it while I sit on my butt while he makes money for me. Why should I have to pay social security tax on my dividends? Its just the same as Theresa Heinz sitting on her butt and collecting dividends. Should she have to pay social security tax too?
You get out of life what you put into it......minus taxes.
Marv
Yeah... maybe you should have to pay social security taxes on dividends earned while you sit on your butt.... why not? I'd venture a guess that a disproportionate number of people earning dividends are on the upper end of the economic spectrum, and can afford the taxes more easily than working stiff who barely even know what a corporate dividend is, let alone get any. So pay up.
Hey, if you feel so strongly about it I suggest you send in additional money as a voluntary contribution. How about we get all the lazy-#### deadbeats off their asses and get them to work and end the Earned Income Credit?
Much to the chagrin of tax-and-spend liberals (commies) the point of the Tax Code is not intended to be income redistribution.
Glad you got your political categories all worked out. Let me know the plan for getting the deadbeats off their butts too... like... what's the first step?
The first step is to end the EIC, end the handouts, close the borders to keep the illegals out, and let them get jobs or go hungry.
old house fan... y don't u blow it out ur azs?Mike Smith Rhode Island : Design / Build / Repair / Restore
Actually I left off the first paragraph that identified this as a Democratic "plan".The idea was not a political thread or discussion of SS.But rather the discussion of changing the meaning of earned income for the purpose of computing SS taxes in two areas, fringe benifits and sub-chap S business.I know a lot of people here like to use sub-chap S for that reason.
Hey, I like it too. I have a sub S corp and can take some earnings as dividends and there's no FICA taken. In fact I'll probably take as much advantage of this as possible, because it appears likely that my FICA contributions will be unavailable to me when I retire, unless there's a dramatic turnabout in the system.
Off-topic rant: I feel fairly righteous about the whole thing because I recently learned a little known fact about Washington work comp law... if you work in more than one comp category during a day, with different comp rates, you have to pay the highest comp rate on all of the hours worked.
I.E. In one day I spend 4 hours doing "wood frame building construction" (comp rate = $2.79 per hour) and 4 hours doing "outside sales" (comp rate = $.20 per hour) and I have to pay 8 x $2.79 as the day's comp premium. SOMEONE TELL ME THIS MAKES SENSE!! @$%&#)
(comp rate = $2.79 per hour)
Maybe I should move to your neck of the woods.
Florida comp rate for that kind of work is 37.5% of wage.
Yeah, it's more like 11% here if you're paying a carpenter $25 per hour. Of course if you're paying them $10 per hour then it's a much bigger percentage... the same $2.79/hr. regardless of wage. I've never had an accident so it's not any higher than that, until next year when they send the new rate card.
Unemployment is 6%.
Try a payroll service. I used one for years and one of the big benefits was that I could cut my employees hours into different comp rates depending on what job they were doing.
I can sort out the hours myself. The LAW is that if you work more than one category per day, you pay comp premiums for the whole day at the highest rate.
But rather the discussion of changing the meaning of earned income for the purpose of computing SS taxes in two areas, fringe benifits and sub-chap S business.
The law states that you should take a reasonable salary and the remainder of your income is dividends. Just because it is hard to enforce doesn't mean all of your earnings should be subject to ss and medicare. If you did this, then all Sub S corporations would drop status and become regular C Corps. They would still take a resonable salary and may or may not pay dividends.You get out of life what you put into it......minus taxes.
Marv
Couldn't think of anything intelligent to say, eh Komrade?
Typical liberal - always takes a straight line to the gutter.
generally speaking.... you sound like michael savidge...
speaking personally .. you sound like a jerk
Mike Smith Rhode Island : Design / Build / Repair / Restore
Another confirmation you have nothing intelligent to say - not that I blame you - you're clearly incapable. It's Savage, Moron.
I realize you bedwetting liberals are frustrated and angry because decent people have rejected your dogma and you can't win an election, but for you to turn a discussion into a personal attack on a message board is really unnecessary and shows what a true loser you are.
I came to read and talk about the topic of the board, you started with the juvenile insults. If you want to continue with the jabs, that's fine, but be aware I will clean the floor with you, little man.
There is the taveren section for political posts.This is in the business section and strictly about sub-chap s and taxes.
Yes, I realize that, but perhaps you should address your point to Mikey, unless you think "Blowing it out your azz" is appropriate here?
In fact, the entire thread should probably be there since the initial post was essentially a political rant from some tax and spend liberal.
old and useless...
here's what you had to say in your very first post....
<<<<
Hey, if you feel so strongly about it I suggest you send in additional money as a voluntary contribution. How about we get all the lazy-#### deadbeats off their asses and get them to work and end the Earned Income Credit?
Much to the chagrin of tax-and-spend liberals (commies) the point of the Tax Code is not intended to be income redistribution.>>>
any time ... any place.... mr. anonymous
since about 1/3 of those of voting age fall into the liberal category.. you are much too quick to disregard other's opinions...
your ability to mouth what you hear on talk radio doesn't impress anyone here... we've all heard it beforeMike Smith Rhode Island : Design / Build / Repair / Restore
"old and useless..."
Don't be so hard on yourself, Mikey. A lack of intelligence doesn't necessarily mean useless.
here's what you had to say in your very first post....
I know what I said. You see, Mikey, I addressed the idea in the post - that people should just "pay up" because, Gosh darn it! a liberal SAID SO! LOL
any time ... any place.... mr. anonymous
LOL Online "tough guy," eh, little man? Like I said, if you want to continue with your pathetic and juvenile attacks I will mop the floor with you. That you resort to your baser, neanderthal instincts does not surprise me, but I would take you apart in that arena too.
since about 1/3 of those of voting age fall into the liberal category.. you are much too quick to disregard other's opinions...
Not at all. 1/3 doesn't win elections, "Genius." You can see that very clearly in the results of recent elections. Yes, there are several people on the Looney Left, whacked out commies IMO, but their extreme ideas (when they have one) have been soundly rejected.
your ability to mouth what you hear on talk radio doesn't impress anyone here... we've all heard it before
Yeah, OK, Mikey, I'm STILL waiting for you to say something that indicates an ability to utilize more than your brain stem. I've read several of your (misspelled) posts - I'm no longer optimistic.
Bottom line, little man - I commented on the post, you (in typical lib/commie fashion) immediately turn it to a personal attack. Oh well, there's one in every group. In this one it's apparently you.
Mike Smith Rhode Island : Design / Build / Repair / Restore
Couldn't think of anything intelligent to say,...
tiny person, why don't you link to something you have posted that you think of as intellegent? you're just a loud hole hiding behind an anonomous - - take your rants to the tavern, or better yet, take it somewhere else entirely - it's obvious you have nothing of substance to offer here - -
"there's enough for everyone"
Well, I would take it there, but it was posted here, and little Mikey seems to want to play, so I'm going to indulge him and make him look like a fool (not that he needs much help in that area).
BTW, who appointed you board "mommy?" Are you Mikey's "partner?"
One last thing - it's spelled intelligent. How about you grapple with spelling it before commenting on it? Thanks!
Boys, don't feed the trolls, it make 'em feel important<G> Don't worry, we can fix that later!