Philzone.org - Philzone Phansite Community Discussion Board: Politics: Politics - Archive 2012: WHO'S GREEDY? Obama Gave 1% to Charity, Romney? 15%

http://nation.foxnews.com/mitt-romney/2012/01/24/w hos-greedy-obama-gave-1-charity-romney-gave-15

Democratic presidential candidate Barack Obama and his wife Michelle gave $10,772 of the $1.2 million they earned from 2000 through 2004 to charities, or less than 1 percent, according to tax returns for those years released today by his campaign.

The Obamas increased the amount they gave to charity when their income rose in 2005 and 2006 after the Illinois senator published a bestselling book. The $137,622 they gave over those two years amounted to more than 5 percent of their $2.6 million income.

Romney charitable contributions

Tax year Taxable income Charitable donations Donations as % of income
2010 $21.7 million $2.98 million 13.73%
2011 (est) $20.9 million $4million 19.14%

I was wondering this morning...is all of that tax deductible?

>> is all of that tax deductible?

Assuming it's all deductible, because his effective tax rate is so low, he's still giving up 85% of that 15%.

How much did you give, Seabag and what charities did they give to?

If he's using it to lower his taxable income, then yes, but if it's just written off of his tax burden, then it's hardly really "giving" at all (in either Romney's or Obama's case).

Chance,
I don't think that's how it works (at least not on my taxes). If he gave $1000 and his tax rate was 15%, he'd only save $150 in taxes out of the $1000 and still REALLY be paying $850.

Then again, my knowledge of taxes/tax law, is limited to personal experience.

WASHINGTON (AP) - It was a wish list, not a to-do list.
President Barack Obama laid out an array of plans in his State of the Union speech as if his hands weren't so tied by political realities. There can be little more than wishful thinking behind his call to end oil industry subsidies - something he could not get through a Democratic Congress, much less today's divided Congress, much less in this election year.
And there was more recycling, in an even more forbidding climate than when the ideas were new: He pushed for an immigration overhaul that he couldn't get past Democrats, permanent college tuition tax credits that he asked for a year ago, and familiar discouragements for companies that move overseas.
A look at Obama's rhetoric Tuesday night and how it fits with the facts and political circumstances:
OBAMA: "We have subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that's rarely been more profitable, and double-down on a clean energy industry that's never been more promising."
THE FACTS: This is at least Obama's third run at stripping subsidies from the oil industry. Back when fellow Democrats formed the House and Senate majorities, he sought $36.5 billion in tax increases on oil and gas companies over the next decade, but Congress largely ignored the request. He called again to end such tax breaks in last year's State of the Union speech. And he's now doing it again, despite facing a wall of opposition from Republicans who want to spur domestic oil and gas production and oppose tax increases generally.
---
OBAMA: "Our health care law relies on a reformed private market, not a government program."
THE FACTS: That's only half true. About half of the more than 30 million uninsured Americans expected to gain coverage through the health care law will be enrolled in a government program. Medicaid, the federal-state program for low-income people, will be expanded starting in 2014 to cover childless adults living near the poverty line.
The other half will be enrolled in private health plans through new state-based insurance markets. But many of them will be receiving federal subsidies to make their premiums more affordable. And that's a government program, too.
Starting in 2014 most Americans will be required to carry health coverage, either through an employer, by buying their own plan, or through a government program.
---
OBAMA, asking Congress to pay for construction projects: "Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home."
THE FACTS: The idea of taking war "savings" to pay for other programs is budgetary sleight of hand. For one thing, the wars in Iraq and Afghanistan have been largely financed through borrowing, so stopping the wars doesn't create a pool of ready cash, just less debt. And the savings appear to be based at least in part on inflated war spending estimates for future years.
---
OBAMA: "Through the power of our diplomacy a world that was once divided about how to deal with Iran's nuclear program now stands as one."
THE FACTS: The world is still divided over how to deal with Iran's disputed nuclear program, and even over whether the nuclear program is a problem at all.
It is true that the U.S., Europe and other nations have agreed to apply the strictest economic sanctions yet on Iran later this year. But the global sanctions net has holes, because some of Iran's large oil trading partners won't go along. China, a major purchaser of Iran's crude, isn't part of the new sanctions and, together with Russia, stopped the United Nations from applying similarly tough penalties.
---
OBAMA: "Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that's built to last - an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values."
THE FACTS: Economists do see manufacturing growth as a necessary component of any U.S. recovery. U.S. manufacturing output climbed 0.9 percent in December, the biggest gain since December 2010. Yet Obama's apparent vision of a nation once again propelled by manufacturing - a vision shared by many Republicans - may already have slipped into the past.
Over generations, the economy has become ever more driven by services; not since 1975 has the U.S. had a surplus in merchandise trade, which covers trade in goods, including manufactured and farm goods. About 90 percent of American workers are employed in the service sector, a profound shift in the nature of the workforce over many decades.
The overall trade deficit through the first 11 months of 2011 ran at an annual rate of nearly $600 billion, up almost 12 percent from the year before.
---
OBAMA: "The Taliban's momentum has been broken, and some troops in Afghanistan have begun to come home."
THE FACTS: Obama is more sanguine about progress in Afghanistan than his own intelligence apparatus. The latest National Intelligence Estimate on Afghanistan warns that the Taliban will grow stronger, using fledgling talks with the U.S. to gain credibility and stall until U.S. troops leave, while continuing to fight for more territory. The classified assessment, described to The Associated Press by officials who have seen it, says the Afghan government hasn't been able to establish credibility with its people, and predicts the Taliban and warlords will largely control the countryside.
---
OBAMA: "On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world's number one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories."
THE FACTS: He left out some key details. The bailout of General Motors and Chrysler began under Republican President George W. Bush. Obama picked up the ball, earmarked more money, and finished the job. But Ford never asked for a federal bailout and never got one.
---
OBAMA: "We can also spur energy innovation with new incentives. The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation."
THE FACTS: With this statement, Obama was renewing a call he made last year to require 80 percent of the nation's electricity to come from clean energy sources by 2035, including nuclear, natural gas and so-called clean coal. He did not put that percentage in his speech but White House background papers show that it remains his goal.
But this Congress has yet to introduce a bill to make that goal a reality, and while legislation may be introduced this year, it is unlikely to become law with a Republican-controlled House that loathes mandates.
---
OBAMA: "Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households."
THE FACTS: It's true that a minority of millionaires pay a lower tax rate than some lower-income people. On average, though, wealthy people pay taxes at a much higher rate than middle-income taxpayers.
Obama's claim comes from a Congressional Research Service report that compared federal taxes paid by people making less than $100,000 with those paid by people making more than $1 million. About 10 percent of families with incomes under $100,000 paid more than 26.5 percent in federal income, payroll and corporate taxes. And about a quarter of millionaire taxpayers paid a rate lower than that.
---
OBAMA: "We can't bring back every job that's left our shores.... Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed."
FACT CHECK: Many of the jobs U.S. companies have created overseas won't return because they were never in the United States in the first place.
As Obama said in his speech, U.S. workers have become more productive and labor costs have fallen.
But there are powerful forces pushing the other way: Many of the overseas jobs in U.S. companies weren't transferred from the U.S. They were created in fast-growing markets in Latin America, Asia and elsewhere to serve customers in those markets. Companies in the Standard & Poor's 500 index now earn more than half of their revenue from overseas.
That has fueled more job creation abroad. U.S. multinationals cut more than 800,000 jobs in the United States from 2000 to 2009, according the Commerce Department. They added 2.9 million overseas in the same period.
---
OBAMA: "Anyone who tells you that America is in decline or that our influence has waned doesn't know what they're talking about ... That's not how people feel from Tokyo to Berlin; from Cape Town to Rio; where opinions of America are higher than they've been in years."
THE FACTS: Obama left out Arab and Muslim nations, where popular opinion of the U.S. appears to have gone downhill or remained unchanged after the spring 2011 reformist uprisings in the Middle East. A Pew Research Center survey in May found that in predominantly Muslim countries such as Turkey, Jordan and Pakistan, views of the U.S. were worse than a year earlier. In Pakistan, a major recipient of U.S. foreign aid that went unmentioned in Obama's speech, just 11 percent of respondents said they held a positive view of the United States.
---
Associated Press writers Tom Raum, Anne Gearan, Ricardo Alonso-Zaldivar, Martin Crutsinger, Jim Drinkard, Dina Cappiello, Erica Werner, Andrew Taylor, Christopher S. Rugaber and Stephen Ohlemacher contributed to this report.

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>>don't think that's how it works (at least not on my taxes). If he gave $1000 and his tax rate was 15%, he'd only save $150 in taxes out of the $1000 and still REALLY be paying $850.

I wasn't aware that something being tax deductible simply meant that that amount of your income (that you donate) was simply not taxed.

Anyone know? I'm admittedly ignorant on specifics of manipulating your taxes like this (we just give and don't report it).

Not that there's anything wrong with using your charitable donations to reduce your tax burden.

>> Anyone know? I'm admittedly ignorant on specifics of manipulating your taxes like this (we just give and don't report it).

A gift to a qualified charitable organization may entitle you to a charitable contribution deduction against your income tax if you itemize deductions.

If the gifts are deductible, the actual cost of the donation is reduced by your tax savings. For example, if you are in the 33% tax bracket, the actual cost of a $100 donation is only $67 ($100 less the $33 tax savings). As your income tax bracket increases, the real cost of your charitable gift decreases, making contributions more attractive for those in higher brackets. The actual cost to a person in the lowest bracket, 15%, for a $100 contribution is $85. For a person in the highest bracket, 35%, the actual cost is only $65. Not only can the wealthy afford to give more, but they receive a larger reward for giving.

http://www.charitynavigator.org/index.cfm?bay=cont ent.view&cpid=31

Romney is actually giving more of this own money than others (per dollar of charitable donation), due to his low tax rate.

Let's also remember that Romney is investing money he has earned, that was already taxed.


If i buy apple stock, the money i use to buy that stock has already been taxed at my income tax rate,

Cap gains are lower, because it is double taxation.

why do y'all care?

I don't think charitable giving is relevant for any candidate, I just saw that it was a huge amount and was wondering about its being tax deductible.

I think his tax rate is relevant, though...silly to only pay 14% on that kind of money. Money made is money made...you only get taxed on the profit, anyway, so the "double taxation" doesn't hold up.

The money you bought the stock with was taxed already, but not the profit you made off of that stock. Such profits are income and should be taxed like all other income.

I'll also be interested to get some details on his Swiss accounts and what's going on with his money in the Caymans.

I have no doubt it's all legal (I think Romney is actually a pretty forthright, decent man), but I don't know if it will play well with a guy trying to explain what he wants to do with tax policy and how the upper income brackets should have their burdens reduced.

Chance


A man bought a house in 1960 for 45k. He sold it in 2005 for 500k.


What should the tax rate on that transaction be?

A man put 1000 dollars into home depot before it was public in 1985. He sold it last year for one million dollars. What should the tax rate on that transaction be?

All profit should be taxed like all other income. It's income. Tax it like income. Your example about a stock turning a profit is not an example of money being taxed twice.

Now assume that these folks are retired and have no other sources of income other than the almost zero percent interest they earn by having their funds in the bank?



What should the tax be on interest earned by having your money in a bank?


Then let's consider a 90 year old woman whom has her money in Con Edison stock. That stock pays a her a 5 percent dividend. So, let's assume, she gets 30k a year in dividends that she lives on. She has no other sources of income. What should her tax rate be?

I like how the same people claim these two things:


1) Corporations don't pay taxes, they pass taxes to consumers;

and

2) Shareholder dividends have already been taxed once, so shareholders are being double taxed.



As for Romney charity, most of it is mandatory tithing to the Mormon church.

The yield on Con Edison is 4.10%. So if this 90 year old woman gets 30k in dividends, she has $731,707 in investments.

Given that she's 90, I think she'd be fine spending her principle investment. Also, she has Social security as income.

(It's going to be really hard to sell your argument that the well off are victims.)

What if a person has no other income?

15 percent on long term capital gains is higher than then poor pay.

Shouldn't a person also be rewarded by investing in a small business or something else that creates jobs?


It is clealy double taxation. Nobody would invest jack dick if all capital Ganesh were taxed at ordinary income.

Are yiou in favor of the elimination of 401ks, Roth Ira's, etc etc?


How should a an invested pension be taxed?

You put in 100k over your working career. It is invested.

You then retire and it is your only income.

How would you like that to be taxed? How should we tax your pension gains?



Stop being a simpleton and think through the tripe you post.

Stick to Judy blume,

Romney and the Burden of Double Taxation
The disclosure of tax returns can be a teachable moment for the GOP candidates.
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By JOHN BERLAU AND TREY KOVACS

When Mitt Romney releases his tax returns, as he is expected to do on Tuesday, thousands of green eyeshades will pore over every line. One of the most important revelations, however, may be overlooked. When double taxation of investment income is taken into account, Mr. Romney most likely underestimated his effective tax rate on the campaign trail.

The former Bain Capital CEO and Massachusetts governor caused a brouhaha last week when he estimated the tax rate on his investment income at 15%. "How unfair!" pundits exclaimed, noting that the top marginal rate for wage income is more than 30%.

The tax rate on investors is unfair, but for the opposite reason. Our tax code layers taxation of dividends and capital gains on top of a top corporate tax rate of 35%—which even President Obama acknowledges is one of the highest in the world.

This is ironically the embodiment of the "corporate personhood" legal doctrine otherwise so decried by the left. The law taxes corporations as if they were separate beings from the shareholders who own them and then levies a separate tax on shareholder payouts and gains. This double taxation brings the effective tax rate on investment income to as much as 44.75%.

In other words, after the combined top tax rates hit $100 of corporate income, $55.25 remains for the investor. And this figure doesn't even include various state and local taxes, or the death tax. Moreover, like the rest of us, Mr. Romney paid income taxes before investing, except on pretax contributions such as an IRA or 401(k).

Though Mr. Romney is by far the richest candidate in the race, he is not the only one with investments. Ron Paul, according to his House financial disclosure form, has a portfolio between $2.5 million and $5.5 million. His investment choices of numerous gold and silver mining stocks seem to mirror his views on monetary policy.

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Dr. Paul, Mr. Romney and other presidential candidates should use the opportunity of releasing their tax returns to make an important policy statement. They should include not only their individual returns, but information about the taxes their corporations pay.

They should also present the amount that will be paid through the death tax, the 35% rate of which, according to the American Family Business Institute, is fifth-highest among advanced economies. Then they should calculate what their taxes will be should the dividend, capital-gains and death-tax rates increase as scheduled at the end of 2012.

In this way the candidates can help explode the myth of the U.S. as a low-tax nation. As Cato Institute tax experts Chris Edwards and Daniel J. Mitchell write in their book, "Global Tax Revolution," while the U.S.'s "overall tax burden . . . is lower than in many other nations," the country "imposes more punishing taxes on savings and investment than many advanced economies."

The most popular tax reforms—from the "9-9-9 plan" of former candidate Herman Cain to flat tax proposals—all have in common the reduction or elimination of double taxation on investment. Research suggests that as they build their portfolios, middle-class savers become more sympathetic to tax reductions on dividends and capital gains.

Related Video


Kim Strassel on the flap over Mitt Romney's tax returns and what Newt Gingrich's returns reveal.

In his 1999 Cato study "The Rise of Worker Capitalism," the late researcher and conservative activist Richard Nadler found that middle-income members of the growing investor class had "internalized their new role as capitalists." The new shareholders, he wrote, "display favorable attitudes toward programs that reduce taxes on savings and investment."

Nadler's longtime colleague Tom Donelson, research associate at Americas Majority Foundation, says that unpublished data he collected in 2010 shows that this pattern still holds among middle-class investors. According to Mr. Donelson, voters at various income levels with $25,000 or more in a portfolio, including retirement accounts such as 401(k)s, were against raising taxes to reduce the deficit and favored further cuts in capital gains and business taxes.

It is also important to point out that capital formation is essential for wage growth. The late New York Congressman Jack Kemp, known for connecting with blue-collar and minority constituencies, showed how to turn this data into a populist point. "You can't have capitalism without capital," he would often say.

If the traditional disclosure of tax returns is elevated into a "teachable moment" about the burdens of double taxation, all Americans could be winners.

Mr. Berlau is director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute, where Mr. Kovacs is a policy analyst.

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http://online.wsj.com/article/SB100014240529702037 18504577178831519223426.html

>>Stop being a simpleton and think through the tripe you post.
Stick to Judy blume,

Interesting...give me a moment to consider your well reasoned argument as well as to look up the term "capital Ganesh" and I'll try to get back to you.

how about some jobs

http://www.youtube.com/watch?v=_UTGh5iMXtc&feature =related

>>It is clealy double taxation

It's actually not.

1. You start with money you earned (already taxed).
2. You invest it in something (not taxed again).
3. You make some money above the original investment, which is new money (and is, thus, taxed).

All of that money was taxed once.

is your savings account/money market account earnings double taxation?

If it's the interest, then no...you make the money, they tax the profit. If they tax the principle each year, then yes.

I agree with Chance.

I really don't see how this would stifle investment. What else are people going to do with the money?

im right in line with y'all here.

It is no surprise distill it down to that.

Once again, you have no clue.


Do some homework on this issue,

Jesus, it impossible to have a disusion with someone who doesn't even have a cursory knowledge of business or economics.


Are corporations taxed chance?

According to you, they are and they should pay more.

Every dollar invested in that business is taxed. In fact, money invested in a business is often triple taxed. Taxed before it is put in, taxed while invested in the business, taxed when dividends are paid out, or interest is paid out on bonds then subject to cap gains tax afterwards.


Read up on the subject. It is a bit more difficult reading than Judy Blume, but not that much harder.





Hell, must read the article above for starters.

Double taxation is the systematic imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes). It refers to taxation by two or more countries of the same income, asset or transaction, for example income paid by an entity of one country to a resident of a different country. The double liability is often mitigated by tax treaties between countries.
The term 'double taxation' is additionally used, particularly in the USA, to refer to the fact that Corporation profits are taxed and the shareholders of the corporation are (usually) subject to further personal taxation when they receive dividends or distributions of those profits.
Contents  [hide] 
1 International double taxation agreements
2 European Union savings taxation
2.1 Cyprus double tax treaties
2.2 German taxation avoidance
3 India
4 United States
4.1 U.S. citizens and resident aliens abroad
4.2 Double taxation within the United States
5 'Double taxation' of Corporate dividends
6 See also
7 Notes
8 External links
[edit]International double taxation agreements

Main article: Tax treaty
It is not unusual for a business or individual who is resident in one country to make a taxable gain (earnings, profits) in another. This person may find that he is obliged by domestic laws to pay tax on that gain locally and pay again in the country in which the gain was made. Since this is inequitable, many nations make bilateral double taxation agreements with each other. In some cases, this requires that tax be paid in the country of residence and be exempt in the country in which it arises. In the remaining cases, the country where the gain arises deducts taxation at source ("withholding tax") and the taxpayer receives a compensating foreign tax credit in the country of residence to reflect the fact that tax has already been paid. To do this, the taxpayer must declare himself (in the foreign country) to be non-resident there. So the second aspect of the agreement is that the two taxation authorities exchange information about such declarations, and so may investigate any anomalies that might indicate tax evasion.[citation needed]
[edit]European Union savings taxation

Main article: European Union withholding tax
In the European Union, member states have concluded a multilateral agreement on information exchange.[1] This means that they will each report (to their counterparts in each other jurisdiction) a list of those savers who have claimed exemption from local taxation on grounds of not being a resident of the state where the income arises. These savers should have declared that foreign income in their own country of residence, so any difference suggests tax evasion.
(For a transition period, some states have a separate arrangement.[2] They may offer each non-resident account holder the choice of taxation arrangements: either (a) disclosure of information as above, or (b) deduction of local tax on savings interest at source as is the case for residents).
[edit]Cyprus double tax treaties
Cyprus has concluded 34 double tax treaties which apply to 40 countries. The main purpose of these treaties is the avoidance of double taxation on income earned in any of these countries. Under these agreements, a credit is usually allowed against the tax levied by the country in which the taxpayer resides for taxes levied in the other treaty country and as a result the tax payer pays no more than the higher of the two rates. Further, some treaties provide for tax sparing credits whereby the tax credit allowed is not only with respect to tax actually paid in the other treaty country but also from tax which would have been otherwise payable had it not been for incentive measures in that other country which result in exemption or reduction of tax.[3]
[edit]German taxation avoidance
If a foreign citizen is in Germany for less than a relevant 183-day period (approximately six months) and is tax resident (i.e., and paying taxes on his or her salary and benefits) elsewhere, then it may be possible to claim tax relief under a particular Double Tax Treaty. The relevant 183 day period is either 183 days in a calendar year or in any period of 12 months, depending upon the particular treaty involved.
So, for example, the Double Tax Treaty with the UK looks at a period of 183 days in the German tax year (which is the same as the calendar year); thus, a citizen of the UK could work in Germany from 1 September through the following 31 May (9 months) and then claim to be exempt from German tax (whilst still paying the UK tax).
[edit]India

India has comprehensive Double Taxation Avoidance Agreements (DTAA ) with 79 countries. This means that there are agreed rates of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. Under the Income Tax Act 1961 of India, there are two provisions, Section 90 and Section 91, which provide specific relief to taxpayers to save them from double taxation. Section 90 is for taxpayers who have paid the tax to a country with which India has signed DTAA, while Section 91 provides relief to tax payers who have paid tax to a country with which India has not signed a DTAA. Thus, India gives relief to both kind of taxpayers.
A large number of foreign institutional investors who trade on the Indian stock markets operate from Mauritius. According to the tax treaty between India and Mauritius, capital gains arising from the sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Therefore, a company resident in Mauritius selling shares of an Indian company will not pay tax in India. Since there is no capital gains tax in Mauritius, the gain will escape tax altogether.
The Indian and Cypriot tax treaty is the only other such Indian treaty to provide for the same beneficial treatment of capital gains.
It must be noted that India has and is making attempts to revise both the Mauritius and Cyprus tax treaties to eliminate this favourable treatment of capital gains tax. The Indian government periodically check for its DTAA with many countries and come up with amendments.
[edit]United States

[edit]U.S. citizens and resident aliens abroad
The U.S. requires its citizens to file tax returns reporting their earnings wherever they reside. However, there are some measures designed to reduce the international double taxation that results from this requirement.[4]
First, an individual who is a bona fide resident of a foreign country or is physically outside the United States for an extended time is entitled to an exclusion (exemption) of part or all of their earned income (i.e. personal service income, as distinguished from income from capital or investments.) That exemption is $91,400 for 2009, pro-rated.[4] (See IRS form 2555.)
Second, the United States allows a foreign tax credit by which income taxes paid to foreign countries can be offset against U.S. income tax liability attributable to foreign income. This can be a complex issue that often requires the services of a tax advisor. The foreign tax credit is not allowed for taxes paid on earned income that is excluded under the rules described in the preceding paragraph (i.e. no double dipping).[4]
[edit]Double taxation within the United States
Double taxation can also happen within a single country. This typically happens when subnational jurisdictions have taxation powers, and jurisdictions have competing claims. In the United States a person may legally have only a single domicile. However, when a person dies different states may each claim that the person was domiciled in that state. Intangible personal property may then be taxed by each state making a claim. In the absence of specific laws prohibiting multiple taxation, and as long as the total of taxes does not exceed 100% of the value of the tangible personal property, the courts will allow such multiple taxation.[citation needed]
[edit]'Double taxation' of Corporate dividends

Some comentators[who?] assert that shareholders are often also subject to double taxation, as the Corporation they own is taxed on its profit as a legal entity and they are taxed again at the individual level when they receive distributions. The opposite of this is called pass-through taxation, where a business entity is not taxed as a legal entity; instead, its profits are taxed at the individual level after they have paid distributions. Business entities which benefit from pass-through taxation include S-Corporations, LLCs, and partnerships, and this is a significant advantage over other business forms which are subject to double taxation.

What is the double taxation of dividends?
After all is said and done, companies that have made a profit can do one of two things with the excess cash. They can (1) take the money and reinvest it to earn even more money, or (2) take the excess funds and divide them among the company's owners, the shareholders, in the form of a dividend.

If the company decides to pay out dividends, the earnings are taxed twice by the government because of the transfer of the money from the company to the shareholders. The first taxation occurs at the company's year-end when it must pay taxes on its earnings. The second taxation occurs when the shareholders receive the dividends, which come from the company's after-tax earnings. The shareholders pay taxes first as owners of a company that brings in earnings and then again as individuals, who must pay income taxes on their own personal dividend earnings.

This may not seem like a big deal to some people who don't really earn substantial amounts of dividend income, but it does bother those whose dividend earnings are larger. Consider this: you work all week and get a paycheck from which tax is deducted. After arriving home, you give your children their weekly allowances, and then an IRS representative shows up at your front door to take a portion of the money you give to your kids. You would complain since you already paid taxes on the money you earned, but in the context of dividend payouts double taxation of earnings is legal.

The double taxation also poses a dilemma to CEOs of companies when deciding whether to reinvest the company's earnings internally. Because the government takes two bites out of the money paid as dividends, it may seem more logical for the company to reinvest the money into projects that may instead give shareholders earnings in capital gains. (For more on this subject, check out Dividend Tax Rates: What Investors Need To Know and Dividend Facts You May Not Know.)

A capital gain is the difference between the price received from selling an asset and the price paid for it. An asset can be a home, a farm, a ranch, a family business, or a work of art, for instance.3 In most years, slightly less than half of the capital gains that the U.S. government taxes are on the sale of corporate stock. For all the controversy surrounding the tax treatment of capital gains, that tax brings in surprisingly little revenue for the federal government. From 1990 to 1995, capital gains tax collections were between $25 billion and $40 billion a year, less than 3 percent of federal tax revenues. During the Internet boom, when stock gains were huge, capital gains tax collections peaked at $119 billion in 2000 before rapidly falling back below $50 billion (see Table 1 for a breakdown of the sources of federal revenue).

The capital gains tax is different from almost all other forms of federal taxation in that it is relatively easy to avoid. Because people pay the tax only when they sell an asset, they can legally avoid payment by holding on to their assets—a phenomenon known as the “lock-in effect.”

The tax treatment of capital gains has other unique features. One is that capital gains are not indexed for inflation: the seller pays tax not only on the real gain in purchasing power, but also on the illusory gain attributable to inflation. The inflation penalty is one reason that, historically, capital gains have been taxed at lower rates than ordinary income. In fact, Alan Blinder, a former member of the Federal Reserve Board, noted in 1980 that, up until that time, “most capital gains were not gains of real purchasing power at all, but simply represented the maintenance of principal in an inflationary world.”4

Table 1 Sources of Federal Revenue (billions of 2003 dollars)
Capital gains tax 45
Corporate income tax 132
Individual income tax 794
Social Security taxes 713
Total revenues 1,782
Source: Historical Tables: Budget of the United States Government, Fiscal Year 2005 (Washington, D.C: Government Printing Office, 2004), Table 2.1, p. 22. Capital Gains from CBO.
Note: Columns do not add because not all sources of federal revenue are shown.
Another strange feature of the tax is that individuals are permitted to deduct only a portion of the capital losses they incur, whereas they must pay taxes on all of the gains. When taxpayers undertake risky investments, the government taxes fully any gain they realize if the investment has a positive return. But the government allows only partial tax deduction (of up to three thousand dollars per year) if the venture results in a loss. That introduces a bias in the tax code against risk-taking.5

One other peculiar aspect of the capital gains tax has made many economists conclude that it is economically inefficient: it is a form of double taxation on capital formation. Economists Victor Canto and Harvey Hirschorn explained:

A government can choose to tax either the value of an asset or its yield, but it should not tax both. Capital gains are literally the appreciation in the value of an existing asset. Any appreciation reflects merely an increase in the after-tax rate of return on the asset. The taxes implicit in the asset’s after-tax earnings are already fully reflected in the asset’s price or change in price. Any additional tax is strictly double taxation.6

Take, for example, the capital gains tax paid on a pharmaceutical stock. The value of that stock equals the discounted present value of all of the company’s future proceeds. If the company is expected to earn $100,000 a year for the next twenty years, the sales price of the stock will reflect those returns. The “gain” the seller realizes from the sale of the stock will reflect those future returns, and thus the seller will pay capital gains tax on the future stream of income. But the company’s future $100,000 annual returns will also be taxed when they are earned. So the $100,000 in profits is taxed twice—when the owners sell their shares of stock and when the company actually earns the income. That is why many tax analysts argue that the most equitable rate of tax on capital gains is zero.


http://www.econlib.org/library/Enc/CapitalGainsTax es.html

Chance 1
Marvin 0

Let's see if we can make this simple enouigh for a BSBA:

1) I buy 100 shares of Apple stock yesterday afternoon, for $420/share, using after-tax money.
Cost=$42,000.
2) I sell it today @$450...receipt: $45,000.

$45,000 - $42,000 = $3,000 capital gain.
The $3,000 will be taxed.
Once.

Math works!

Apple pays an effective corporate tax rate of 28 percent.

Taxed
Take, for example, the capital gains tax paid on a pharmaceutical stock. The value of that stock equals the discounted present value of all of the company’s future proceeds. If the company is expected to earn $100,000 a year for the next twenty years, the sales price of the stock will reflect those returns. The “gain” the seller realizes from the sale of the stock will reflect those future returns, and thus the seller will pay capital gains tax on the future stream of income. But the company’s future $100,000 annual returns will also be taxed when they are earned. So the $100,000 in profits is taxed twice—when the owners sell their shares of stock and when the company actually earns the income. That is why many tax analysts argue that the most equitable rate of tax on capital gains is zero.




You lose again manfred.

Blair. 10000

Manfred. 0

The former Bain Capital CEO and Massachusetts governor caused a brouhaha last week when he estimated the tax rate on his investment income at 15%. "How unfair!" pundits exclaimed, noting that the top marginal rate for wage income is more than 30%.

The tax rate on investors is unfair, but for the opposite reason. Our tax code layers taxation of dividends and capital gains on top of a top corporate tax rate of 35%—which even President Obama acknowledges is one of the highest in the world.

This is ironically the embodiment of the "corporate personhood" legal doctrine otherwise so decried by the left. The law taxes corporations as if they were separate beings from the shareholders who own them and then levies a separate tax on shareholder payouts and gains. This double taxation brings the effective tax rate on investment income to as much as 44.75%.

In other words, after the combined top tax rates hit $100 of corporate income, $55.25 remains for the investor. And this figure doesn't even include various state and local taxes, or the death tax. Moreover, like the rest of us, Mr. Romney paid income taxes before investing, except on pretax contributions such as an IRA or 401(k).

>>Apple pays an effective corporate tax rate of 28 percent.

I don't think that has anything to do with the taxes an investor would pay on their profits from investing in Apple.


>>So the $100,000 in profits is taxed twice—when the owners sell their shares of stock and when the company actually earns the income. That is why many tax analysts argue that the most equitable rate of tax on capital gains is zero.

No, it's taxed once...the owner sells the stock and then pays tax on the profits. Those profits are taxed once (the investor pays tax on them only once). That the company then pays taxes on their profits does not mean anything is being taxed twice.

^^The shareholders pay taxes first as owners of a company that brings in earnings and then again as individuals, who must pay income taxes on their own personal dividend earnings.

That is just not true. Corporations are people too. (Where have I heard that before?) Therefore the corporate entity, which is a person, pays their taxes on their income. They then pay dividends to their shareholders who are taxed on their profits.

If I pay my taxes on my income and then use some of that income to pay someone to put a new roof on my house should the roofing company be taxed? After all, I have already paid taxes on the money I pay them with.

Need a roof. Give me a call!

Chance stayed at a holiday inn express last night,

Thank god you aren't my tax attorney,

You are so far off course that I am done with this issue,

Stay ignorant my friends,

Blair, have you ever had a hardship or have had to struggle in your life or did you live a life of privelege?

>>>>No, it's taxed once...the owner sells the stock and then pays tax on the profits.


Maybe they didn't get that far in the book in the BSBA program.


http://www.fre.devry.edu/BSBADepartment.html

I have already proved why that is not true

Let me repeat myself....manfred.




In the case of capital gain on company stock, the price of the stock reflects
the value of the company, i.e. the net present value of the expected future
income it generates - income *after* tax has been paid. If there was no tax on
the company's income, the value of the company would be greater, so the stock
price must reflect the company's future tax liability.

So any capital gain on selling the stock already reflects a corresponding
increase in the company's expected future tax liability. Hence taxing the
capital gain can indeed be viewed as taxing the future income
stream twice.



I am surprised a man of your stature and investing acumen cannot comprehend such a simple reality.

they didnt teach you that at north Texas?

a) The University of North Texas, formerly known as North Texas State, has a top-rated School of Music.
b) I'm not an alum.

c) Your example is silly. What if the stock price rose due to decreasing risk aversion due to more certainty about future cash flows?
Prices can fluctuate based not only on cash flows, but on changes in the discount rate.
Or, what if Romney wins and lowers corporate taxes and as a result, share prices rise?
The rise in prices would be due to a reduction of taxes, so those capital gains would be FROM the elimination of taxes...
...and so taxing capital gains that come from tax reductions is clearly not double taxation - altho it comes pretty close to double talk.

d) What about capital gains from rising municipal bond prices?
e) or real estate?
f) or gold?
g) or oil futures?

but, much more interestingly, I'm pretty sure that you, Blair, have argued for quite some time that corporations do not pay taxes, their customers do.

Which is it?
Do the shareholders pay corporate taxes, or do the customers?


Score remains:
Chance 1
Marvin 0

Drawbacks of Using C Corporation Format

There are also several reasons that argue against forming a C corporation if your business has the option to form under a different legal structure. These include the following:

The potential for "double taxation." The chief drawback of a C corporation is the so-called "double taxation" potential. "Profits are first taxed to the corporation," Weltman says. "Then, when they are distributed to shareholders in the form of dividends, they are taxed again; the corporation cannot deduct dividend distributions.


Sorry hand.

Try to keep up.

Never Hold Your Real Estate In C Corporation
| More in Real Estate Protection




One of the crucial sins of real estate asset protection is take your estate’s title in the name of a C corporation or third party. However, there are certainly advantages or benefit is terms of using a C corporation in business. Please take into consider too, there is a huge disadvantage behind the reality of C corporation for real es tate, which can be expressed in one short word: taxes.

As you probably know this fact whereby  C corporations will face a double tax if you hold your estate there. You have to pay taxes once at the company level and then again when dividends are be distributed to share holders. For example, you with an S corporation, LLC, or LP you pay tax only once at the com pany level. A simple chart show at below will show the how to differences between double taxation and flow through from your taxation.

So what happens if you have a capital gain or earn quite a number of profit on the sale of real estate held by a C corporation? You must pay a lot more in taxes. Consider this situation whereby a $600,000 long-term capital profit had being made on the sale of real estate held for longer than one year.

Your can calculate how funds you need to pay when you need to pay twice. You will pay more than $144,500 in federal taxes by using a C corporation instead of an LLC. In the market, some people may confuse with this. Such as will any investors join your deal if you propose by using a C corporation for assets protection? Actually they’ll know but you don’t know what actually you are do ing. So safety purpose, please avoid the professional who advises you to use a C corporation to hold any interest in real estate. They just don’t know what they are doing to your later statement.

We often listen some of the clients discuss how great some asset protection “guru” or other sales person had advised them to set up their structure as the following below:

Example, the rationale is that the two pieces of rental property are owned by the LLCs and each LLC is in turn owned by a C corporation. The gurus will state that all kinds of deductions can be taken with a C corporation. The problem occurs at flow through entities. The profits flow from the LLCs to a C corpo­ration will be required to pay taxes twice, one is at LLCs and other one is at C corporation. This clearly show that you are still in a bad tax position.

If you are intent on using a C corporation in your entity mix (and please be cautious of promoters who overly tout the supposed glorious benefits of the C Corporation) a better scenario is the following:

At the structure below, the title holding of the property are held by an asset protecting LLC, thus providing flow through taxation throughout the structure. For those desiring the write offs of a C corporation, a manage ment C corporation is used. For each of title holding LLC require to pays a certain amount of management fee to the  C corporation so that they can earn some benefits.

Thus, there will be no ownership of real estate at the side of  C corporation, due to avoiding the double taxation of profits that we had in the first instance.

So, please also beware of promoters who would have you set up more entities than you need. The management corporation may provide some benefits in later years when there is plenty of cash flow. At the start, do you really need one? So be very careful with those sales person who put their best interest as first priority instead of yours.

Related Posts:

Entitlements Is Equal To Profits
Living Trusts Actually Offer No Asset Protection
Interest Rate Vesus Property Investment Strategy
Two Most Common Ways Of Taking Title To Your Real Estate Do Not Provide Asset Protection
Asset Protection
Filed in Real Estate Protection | Tags: business, Business Sense, Capital Profit, cash flow, financial statement, Fund Management, Investment, Investment Analysis, Investment benefit, Investor, Long Term Investment, property investment, Property manage ment, Property Owner, real es tate, share holders, taxation


http://estatebelonging.com/real-estate-protection/ never-hold-real-estate-in-a-c-corporation/

>>You are so far off course that I am done with this issue

Kind of like when we were talking about Greece. Off you go, then.

Yeah, kind of.

How did day care go today?

^^The potential for "double taxation." The chief drawback of a C corporation is the so-called "double taxation" potential. "Profits are first taxed to the corporation," Weltman says. "Then, when they are distributed to shareholders in the form of dividends, they are taxed again; the corporation cannot deduct dividend distributions.


CORPORATIONS ARE PEOPLE!!!

Therefore they should be taxed. Once.

Then they pay dividends which are then taxed once.

You should have learned this in college preparatory school.

How much spare change did you collect tonight?


Was it a good night?

No need to spange tonight. I just got my Social Security direct deposit today so I am flush. Thank you so much for your contribution.

Billionaire Warren Buffett has given away $1.93 billion in company shares to charity this year, after pledging to give away 99% of his wealth to good causes in 2006.

The money is split between five charities – the Bill and Melinda Gates Foundation, the Sherwood Foundation, the Howard G. Buffett Foundation, the NoVo Foundation, and the Susan Thompson Buffett Foundation.

The donation follows last month’s online auction to have lunch with the business legend, which raised $2.63 million for the Glide Foundation, a diverse, cutting-edge church and nonprofit offering innovative programs to poor and marginalized people. The foundation serves 700,000 free meals a year and provides dozens of other social services on a $12 million budget, according to Cecil Williams, the foundation’s chief executive officer and minister of the associated church.

The auction is held annually.



Read more: http://www.looktothestars.org/news/4703-warren-buf fett-makes-annual-charity-donation#ixzz1kgeZUhik


Makes Mitt Romney look kind of cheap.

According to a 2007 Chicago Tribune story:



"Only a few of the tax returns released by Obama detail the recipients of his charity. In 1998, when the Obamas reported a combined household income of $191,146 and $1,100 in cash donations to charity, the biggest gift went to Trinity. It totaled $400, about 0.2 percent of their combined income.

"In 2005 they gave the church $5,000 and in 2006 it received $22,500."


So, in two of the three years for which we have numbers (1998 and 2006), Wright's Trinity church was the top recipient of the Obama family's contributions. Now, 2006 really wasn't very long ago...


Obama's donations went to his racist bigotted polititcal organization he was a member of for 23 years..

Yeah Obama


Money for Hate

what a guy

Thanks for the pic, again.

I would think a racist such as yourself would have a much better collection to choose from.

And Bert gave zero to the Zone.

Nice job Reverend Bert

Most of Romney's charitable donations were to his church. His church then used that money to campaign for Proposition 8, denying marriage rights to same sex individuals.

To quote the PhilZone's favorite scholar:

"Money for Hate
what a guy"

AlbanyGregg,
Any contributions made to the Prop 8 campaign would not be tax deductible.

>> His church then used that money to campaign for Proposition 8, denying marriage rights to same sex individuals.

Nope:
"The Church as an institution made no direct monetary contributions to the "Yes on 8" campaign. All monetary donations came from individual Church members, who decided if and how much they would contribute."

Why can't you just be happy he's a generous man? Forget about politics, he's doing what everyone, right or left, thinks is admirable - he's giving his own money to help other people.

Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time. Consequently, a tax-free institution would have needed 4.3% interest annually from bond investments over that period to simply maintain its purchasing power. Its managers would have been kidding themselves if they thought of any portion of that interest as "income."

For taxpaying investors like you and me, the picture has been far worse. During the same 47-year period, continuous rolling of U.S. Treasury bills produced 5.7% annually. That sounds satisfactory. But if an individual investor paid personal income taxes at a rate averaging 25%, this 5.7% return would have yielded nothing in the way of real income. This investor's visible income tax would have stripped him of 1.4 points of the stated yield, and the invisible inflation tax would have devoured the remaining 4.3 points. It's noteworthy that the implicit inflation "tax" was more than triple the explicit income tax that our investor probably thought of as his main burden. "In God We Trust" may be imprinted on our currency, but the hand that activates our government's printing press has been all too human.


http://finance.fortune.cnn.com/2012/02/09/warren-b uffett-berkshire-shareholder-letter/

>>>And Bert gave zero to the Zone.
Nice job Reverend Bert


Bwahahahahaa!!

>>>no direct monetary contributions to the "Yes on 8" campaign

How about indirectly? .. his church Inc. is so big it could funnel money around easily.

The LDS church has taken ambitious strides to preserve and grow its wealth over the years. Beneficial Financial Group, a $3.1 billion insurance company with annual revenues exceeding $600 million, is wholly owned by the church. LDS also owns the Deseret Morning News, Utah’s second-largest newspaper. Bonneville International Corporation, which controls over two dozen top radio stations across six states, is also wholly owned by LDS through Deseret Management Corporation, the church’s for-profit arm. Another $6 billion of church money was said by Time to be tied up in “unspecified investments"

http://www.mint.com/blog/investing/how-churches-in vest-05172010/.”

It's like Romney loaning money to his campaign only to pay himself back later.(with interest) CPA's

Is it a love letter from liberal Mormons to their church, or a Michael Moore-style hit piece on Mormon leaders?

The film 8: The Mormon Proposition, explores the role of the Church of Jesus Christ of Latter-day Saints in repealing same-sex marriage in California nearly two years ago. After debuting at last winter's Sundance Film Festival, the film opens in 15 cities nationwide today.

Director Reed Cowan had originally set out to document homeless and suicidal Mormon teens when another topic caught his attention.

In 2008, about six months after California's Supreme Court had struck down a ban on gay marriage, voters approved Proposition 8, a referendum that restricts marriage to heterosexual couples.

The LDS church's support for the referendum went all but unnoticed — for a time - until Mormons' significant deployment of moral and financial capital was discovered. Earlier this month, the LDS church agreed to pay a $5,500 fine for not reporting all of its nonmonetary contributions in support of Prop. 8.

In the documentary, gay Mormon couples, families and ex-church members chronicle the church's campaign behind Proposition 8.

Televised advertisements endorsed by the church urged the public to preserve traditional families. Church leaders warned that same-sex marriages ruin society and endanger souls and mobilized their congregations accordingly.

"Money, volunteers and a message. One organization with all three of these rose above the rest that summer, saying to the rest, 'Come follow me,' " says Dustin Lance Black, a narrator of the film. Black, known for penning the screenplay for the Oscar-winning film Milk, also writes for HBO's Big Love, which explores polygamy among modern fundamentalist Mormons not affiliated with the LDS church.

Black is not the only cast or crewmember with Mormon roots. Cowan, co-director Steven Greenstreet and producer Emily Pearson also grew up in the faith.

"I feel like this film in a lot of ways was my second mission," Greenstreet said. "I served a mission for the church - went out and pounded pavement and knocked on doors - so this is my second."

Mormon youth were taught how to persuade their friends and families to vote on Proposition 8, according to 8. Elder Quentin L. Cook, a Mormon leader, called on devotees to donate their "means and time" to the cause.

Critics of the film, including the Mormon church, said 8 takes a biased stance against the church.

"Clearly, anyone looking for balance and thoughtful discussion of a serious topic will need to look elsewhere," said Kim Farah, a LDS church spokesperson.

David Melson, head of the gay and lesbian Mormon organization Affirmation, said the film was not so much anti-Mormon as a "love letter" to the church.

"As a gay Latter-day Saint, I had to kind of emotionally separate my belief in the doctrines of the church with my belief in their political structure," he said.

Melson converted to the faith years after he came out as gay. He said he was clear about his sexuality from the start - out to his bishop and church leaders.

For director Cowan, the most important audience of the film are potential voters.

"This is not a gay film. This film is an examination of faith, obedience and incursions in to politics by religion," he said.

http://www.chron.com/life/houston-belief/article/T he-Mormon-role-behind-Proposition-8-1704751.php?cm pid=twitter

The Mormon Money Behind Proposition 8
By The Daily Dish

It's actually even bigger than previously understood. Yesterday, I linked to stories alleging up to 40 percent of the financing for the California proposition to strip gay couples of their right to marry was coming from LDS Church members. Now, the numbers claimed by the opponents of Proposition 8 are even higher - more like a staggering 77 percent:

Californians Against Hate released figures Tuesday showing that $17.67 million was contributed by 59,000 Mormon families since August to groups like Yes on 8. Contributions in support of Prop. 8 total $22.88 million. Additionally, the group reports that Mormons have contributed $6.9 million to pass a a similar law, Proposition 102, in Arizona...




Karger said Californians Against Hate came up with the figures by cross-referencing donor information from the California secretary of state with Brigham Young University alumni lists, church memberships, and other personal documentation that could identify Mormon Church members. He said the surge in support has been an attempt to boost the church's social standing among the greater religious community.

"For whatever reason, they're trying to get some respect from other religions," he told The Advocate Tuesday. "They've always been looked down upon by the Christians, the Catholics, and evangelicals." Success with the marriage amendment would give the church credibility, Karger said.

(Photo: Same-sex couple Shani Lyons (L) and Melanie Franklin (R) exchange rings during their wedding ceremony October 15, 2008 at City Hall in San Francisco, California. Same-sex couples are rushing to get married before the November election in fear that anti-gay marriage initiative proposition 8 will pass and gay marriages will once again be illegal in California. By Justin Sullivan/Getty.)


This is about consolidating the Mormon church into the wider Christianist movement. If the Mormons can prove their anti-gay mettle, they will be less subject to suspicion from evanglicals. Just ask Hewitt. It''s a project dear to his heart. You can help counter-balance the Mormon money flood by donating here.

http://www.theatlantic.com/daily-dish/archive/2008 /10/the-mormon-money-behind-proposition-8/209748/

Check out this video on YouTube:

http://www.youtube.com/watch?v=luo40WjBKWI&feature =youtube_gdata_player

No.

Nice, Blair. And don't let ANYONE tell you that that video is racist stereotyping. Anyone.

http://www.youtube.com/watch?v=4LWlkXRZ3CA&feature =fvwrel


Who would want to work in America?

Damn.

Albany loves hearing such iispiational stories.

^^Albany loves hearing such iispiational stories.



What I really love is when you make up new words.

Are you drunk all the time?

It's the ipad Gregg.

also the turbulence makes his fingers slip and as you know Blair only zones while cruising on his private jet.

Always.