Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Schumer
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
This is a major, huge bill, and a real victory for Joe Biden.
On one hand, the nookyoolar assplosion of the QOP has stolen the thunder from the nationable conversation, so there haven't been a lot of headlines. But on the bright side, the news about the documents proving our former president is a fucking thief and a foreign spy kind of helped the bill get completed. If it wasn't for Monday's search of the thief's home, the right-wing insanosphere would have been screaming 24/7 about this bill, and the QOP might have devised some underhanded method of stopping it at the last minute.
And in the final analysis, this bill passed AND the fucking spy, thief, liar, and asshole is getting repeatedly punched in the dick.
I, however, am enjoying life, and I feel constrained to repeat - IMHO, over the long run, history only moves in one direction, and that's FORWARD ~>>.
On one hand, the nookyoolar assplosion of the QOP has stolen the thunder from the nationable conversation, so there haven't been a lot of headlines. But on the bright side, the news about the documents proving our former president is a fucking thief and a foreign spy kind of helped the bill get completed. If it wasn't for Monday's search of the thief's home, the right-wing insanosphere would have been screaming 24/7 about this bill, and the QOP might have devised some underhanded method of stopping it at the last minute.
And in the final analysis, this bill passed AND the fucking spy, thief, liar, and asshole is getting repeatedly punched in the dick.
I, however, am enjoying life, and I feel constrained to repeat - IMHO, over the long run, history only moves in one direction, and that's FORWARD ~>>.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
I have been in some arguments, er, discussions with many people over the years about this very thing. Take two people. One works full-time for wages. This person receives a W-2 for, say $60,000. The other person works for wages and tips because this second person is in the hospitality industry or perhaps works in a salon. This second person earns $40,000 on a W-2 but $20,000 in tips. Yet the second person might only report (or have the employer report) $12,000 in tips. These people make the same amount of money, but the second pays less in tax.Ben-Prime wrote: ↑Sat Aug 13, 2022 5:35 amI think that's because in talking up or talking down the bill depending on which side one is on, many people use 'pay' when they mean 'owe'.
No such small business will OWE more than they do now, but some may PAY more because, as you say, they have been PAYING less than they OWE and now the bill will come due with increased enforcement.
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Another oldie but goodie:
"Can I ask you a question?"
"Sure."
"If a person pays me money to do something, and he does not send me a 1099, do I have to report it?"
"Why would you not have to report it?"
"Because no one would know about it."
"But I would."
Yes, it is not right that a self-employed person has to pay both halves of OASDI and Medicare on their 1040 when wage earner have half that amount deducted by their employer. (The employer kicks in the other half). It can be onerous to pay an additional 14.13%* in self-employment tax on top of income tax on self-employment earnings up to $147,000 (this year.) The Medicare Part A hit has no upper limit, so those earning >$147,000 have to pay 2.68% on their SE earnings that exceed 147K.
If you look at your Social Security benefit statement, the SS wage maximum in 1972 was $9,000. The combined SS and Medicare rate
was much lower--10.4%.
*SS = .124; Medicare = .029; individuals receive a deduction from gross income of half the SE tax paid (.0765.) So ([.124+.029])(.9235) = .1413.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Ah, yes, but the guy who owns his own business can legally pay himself a pittance in salary subject to payroll taxes and award himself a handsome dividend which is Capital Gains tax rate, better than his regular income tax rate plus b=double bonus no payroll tax due.
I'd also say if you go into business for yourself, well, that's a cost of doing business and most of the people who keep doing it only keep doing it because they're coming out ahead.
Whenever I cry for "tax justice" or bring up that I don't much mind the ta I pay friends will point out the many things I do to take advantage of the tax treatment and how I really do quite well because of it. I do. I would be stupid not to, but when they close the loopholes I use or change the rules so that my effective tax rate for total Income Tax, Capital Gains and Social Security/Medicare is higher than the girl who takes care of my dogs, I am not going to complain.
It's a long time coming.
I'd also say if you go into business for yourself, well, that's a cost of doing business and most of the people who keep doing it only keep doing it because they're coming out ahead.
Whenever I cry for "tax justice" or bring up that I don't much mind the ta I pay friends will point out the many things I do to take advantage of the tax treatment and how I really do quite well because of it. I do. I would be stupid not to, but when they close the loopholes I use or change the rules so that my effective tax rate for total Income Tax, Capital Gains and Social Security/Medicare is higher than the girl who takes care of my dogs, I am not going to complain.
It's a long time coming.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Gregg, no disrespect, but please don't give up your day job to pursue your lifelong dream of becoming a tax advisor.Gregg wrote: ↑Sat Aug 13, 2022 4:50 pm Ah, yes, but the guy who owns his own business can legally pay himself a pittance in salary subject to payroll taxes and award himself a handsome dividend which is Capital Gains tax rate, better than his regular income tax rate plus b=double bonus no payroll tax due.
I'd also say if you go into business for yourself, well, that's a cost of doing business and most of the people who keep doing it only keep doing it because they're coming out ahead.
Whenever I cry for "tax justice" or bring up that I don't much mind the ta I pay friends will point out the many things I do to take advantage of the tax treatment and how I really do quite well because of it. I do. I would be stupid not to, but when they close the loopholes I use or change the rules so that my effective tax rate for total Income Tax, Capital Gains and Social Security/Medicare is higher than the girl who takes care of my dogs, I am not going to complain.
It's a long time coming.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Gregg, a little more complicated than that. Corporations have a choice between being taxed as a regular (or C) corporation, or they can elect to be taxed as an S corporation.
The former pay income taxes at the 21% rate (cuz the Trumpian Tax Act of 2017 tells us so.) So, yes, the owner can pay a meager salary to himself, pay corporate income tax at 21% of the profits, then push those profits out as a dividend, taxable at 20% (plus the 3.8% Obamacare tax if his income is high enough.) I think this approach is a relic of bygone years because of the double taxation of the dividend.
S corporations do not pay income taxes. Instead, they pass all tax items through to the shareholders. Again, the shareholder-employee could pay himself a meager salary and take the balance out of the corporation tax-free because he is taxed on the profits anyway. But then the Service will look at a company carefully if this company has $700,000 in sales, $400,000 in expenses, including an officer salary of $24,000. They could (and frequently do) recharacterize some of the dividend distributions to the shareholder as wage income. This reclassification does not change the income tax liability** but it does subject this reclassification to additional SS and Medicare taxes. A $100,000 increase in salary would put $15,300 into the Treasury.
Likewise, partnerships don't pay any income taxes either. The profits are allocated to the partners by their profit and loss percentages. Partners who actively work as "employees" receive what are called guaranteed payments and are subject to SE taxes--partners do not receive paychecks.
**The aforementioned Trumpian Tax and Corporate Welfare Act added a deduction for self-employed individuals for "Qualified Business Income." This deduction can be as high as 20% of the net profit (with certain restrictions for wages paid, equipment owned, and types of businesses). So, in this S Corp example, the owner would receive a 20% deduction on the 300K profit ($60,000). After the adjustment for 100K for low balling his wage, the profit shrinks to 200K but the 20% QBI deduction drops to $40,000, so 20K more is subject to income tax.
Sorry for the detailed Taxation 201 spiel.![Can't Look :cantlook:](./images/smilies/idontwanttosee.gif)
The former pay income taxes at the 21% rate (cuz the Trumpian Tax Act of 2017 tells us so.) So, yes, the owner can pay a meager salary to himself, pay corporate income tax at 21% of the profits, then push those profits out as a dividend, taxable at 20% (plus the 3.8% Obamacare tax if his income is high enough.) I think this approach is a relic of bygone years because of the double taxation of the dividend.
S corporations do not pay income taxes. Instead, they pass all tax items through to the shareholders. Again, the shareholder-employee could pay himself a meager salary and take the balance out of the corporation tax-free because he is taxed on the profits anyway. But then the Service will look at a company carefully if this company has $700,000 in sales, $400,000 in expenses, including an officer salary of $24,000. They could (and frequently do) recharacterize some of the dividend distributions to the shareholder as wage income. This reclassification does not change the income tax liability** but it does subject this reclassification to additional SS and Medicare taxes. A $100,000 increase in salary would put $15,300 into the Treasury.
Likewise, partnerships don't pay any income taxes either. The profits are allocated to the partners by their profit and loss percentages. Partners who actively work as "employees" receive what are called guaranteed payments and are subject to SE taxes--partners do not receive paychecks.
**The aforementioned Trumpian Tax and Corporate Welfare Act added a deduction for self-employed individuals for "Qualified Business Income." This deduction can be as high as 20% of the net profit (with certain restrictions for wages paid, equipment owned, and types of businesses). So, in this S Corp example, the owner would receive a 20% deduction on the 300K profit ($60,000). After the adjustment for 100K for low balling his wage, the profit shrinks to 200K but the 20% QBI deduction drops to $40,000, so 20K more is subject to income tax.
Sorry for the detailed Taxation 201 spiel.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Yes. I am not a tax advisor, but in my work as a tax controversy attorney, I see my share of bad planning. The corporate tax rate of 21% on corporate profits + individual capital gains rate of 23.8% on any dividend payout seems like a high price to pay for avoiding a salary. The 12.4% SS tax phases out at the SS max (currently $147k). The highest individual marginal rates are 37%, and that only applies to income above $539,900. Plus, eligibility for putting money into corporate-sponsored retirement plans (deductible by the corporation and generally deferred by the employee until retirement distributions are made) is based on salary.
As far as paying a pittance of a salary to minimize SS taxes, the IRS could challenge the payment of a low salary as not being "reasonable compensation." They have done this with success - primarily with individuals who are owners of S corporations. I don't think they would go after C corporations who did this, but you never know.
I would recommend looking into an S corporation structure where you pay yourself a reasonable salary, and take the remainder as flow through income. There is a deduction in the amount of 20% of the business's net income under section 199A (provided you are not providing a specified service - law, medicine, accounting, etc., which are subject to additional limitations and a phase out). Any distributions you make to yourself from an S corporation are not subject to tax, provided they do not exceed the flow through income that you have already paid tax on.
Also, think about retirement planning. I put the 401k max into a Roth 401k account, paying taxes on this currently. I figure tax rates will likely be higher in the future, and having an account whose principal and earnings never attract tax cannot be a bad thing.
Apologies for the detour into tax nerd stuff.
Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
My thanks to Humblescribe and JColvin2 for laying out in some detail what I lacked the energy for after spending all day on I-75.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Okay, so maybe its a good thing that I pay someone to do my taxes. But there are ways around paying some taxes when you have a business that a W-2 wage earner can't use. I make enough to max out Social Security anyway from the day job. But when I had the little side gig which was pulling in almost twice what the Motorcar Company was doing, I know I didn't pay very much in taxes in the grand scheme of things.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
How long are those flights from Colombia anywho....?
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
But when it comes down to it, the IRS is going to enforce the tax law in this time and place*. If you want to argue fairness, that involves changes in the tax code which is a function of Congress. If you do have complex issues, or if you are running a business, it might pay to hire a tax professional to provide guidance as to alternatives.
* Sometimes the tax code is very straightforward, other times there are variations in interpretations. Sometimes it's not the law which is subject to different interpretations, but the circumstances which can be interpreted in different ways. For example, if a person's estate includes a going business or valuable artwork, the IRS's expert may assert a different value than the estate's expert.
* Sometimes the tax code is very straightforward, other times there are variations in interpretations. Sometimes it's not the law which is subject to different interpretations, but the circumstances which can be interpreted in different ways. For example, if a person's estate includes a going business or valuable artwork, the IRS's expert may assert a different value than the estate's expert.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
This is what it has become since I sold it... https://www.dieselsite.com/transmissions.aspx
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
crocodile tears
PFIZER CEO COMPLAINS TO INVESTORS ABOUT LOWER DRUG PRICES UNDER INFLATION REDUCTION ACT
Chief executive Albert Bourla said Manchin and Schumer were “wrong” to “single out” the pharmaceutical industry in seeking cost savings for the government.
Lee Fang
August 4 2022, 1:07 a.m.
PFIZER CEO ALBERT BOURLA is displeased by the legislative sprint to pass the Inflation Reduction Act, the sweeping energy bill financed in part by reductions in the price of key pharmaceuticals.
“I want to say it is very disappointing that they are choosing to single out one industry,” Bourla said during a call with investors last week.
The legislation, said Bourla, includes “specific measures to affect only the pharma industry, particularly when we are out of a pandemic, where this industry has proven the value that brings to public health and to the global economy.”
The bitter comments about the Inflation Reduction Act — the work of quiet negotiations led by Sen. Joe Manchin, D-W.Va., and Sen. Chuck Schumer, D-N.Y. — reflect the pharmaceutical industry’s opposition to a key financing provision for a range of energy incentive and deficit reduction plans. The legislation aims to finance these programs primarily through changes in the tax code and the revival of a drug price reduction plan from last year.
The drug price plan, which was formulated last year in the House of Representatives, is a compromise measure that falls short of progressive demands for Medicare to directly negotiate the price of all drugs it reimburses on behalf of seniors. Instead, it would allow the Centers for Medicare and Medicaid Services to negotiate the costs of 10 high-priced legacy drugs in 2023, for agreements that would take effect in 2025. Drugmakers that do not participate in the negotiations would face a special excise tax, and the provision contains several exemptions for newly released drugs and certain biologics that have been available for less than 12 years.
https://theintercept.com/2022/08/03/pfi ... g-pricing/
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Live Now: President Biden signing the IRA! On CNN and other cable networks. Yay! Great hearing everyone thanking the 699th for helping make this happen! ![Razz :P](./images/smilies/icon_razz.gif)
Biden is hopeful, optimistic, and forward-looking. This speech is really well written and Democrats should take this path from now until November.
It's set to start with the event at 36:53:
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Biden is hopeful, optimistic, and forward-looking. This speech is really well written and Democrats should take this path from now until November.
It's set to start with the event at 36:53:
Lt Root Beer of the Mighty 699th. Fogbow
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Do you notice that the music is John Philip Sousa's march, "The Washington Post", which was comissioned by the newspaper in 1889?
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
My favorite Sousa.much ado wrote: ↑Wed Aug 17, 2022 12:45 am Do you notice that the music is John Philip Sousa's march, "The Washington Post", which was comissioned by the newspaper in 1889?
https://www.you tube.com/watch?v=peidgSY8A50
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
Off Topic
Off topic, but if you're a Sousa fan you might find this interesting -
Foshay's check to Sousa bounced
Foshay's check to Sousa bounced
Today's Morning Edition music is from John Philip Sousa's "Foshay Tower" march.
The Foshay Tower in Minneapolis was dedicated on this day in 1929. At the time, it was the tallest building between Chicago and the West Coast at 32 stories.
It was built by businessman Wilbur Foshay. He made his fortune off of utilities, and owned companies in 30 states, Canada and Central America. He built the Foshay Tower to be his headquarters, telling reporters at the time that the design was inspired by the Washington Monument.
He held a three-day celebration for the opening, hiring Sousa to write and perform this march. It turned out to be Foshay's final hurrah.
The stock market crashed soon after and took the businessman down with it. In fact, Foshay's check to Sousa bounced, and Sousa forbid anyone to play the piece until the finances were settled.
Tim Walz’ Golden Rule: Mind your own damn business!
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
This. Both of them.Ben-Prime wrote: ↑Sat Aug 13, 2022 5:35 amI think that's because in talking up or talking down the bill depending on which side one is on, many people use 'pay' when they mean 'owe'.
No such small business will OWE more than they do now, but some may PAY more because, as you say, they have been PAYING less than they OWE and now the bill will come due with increased enforcement.
There's a reason that small business owners are audited. They are among the worst offenders when it comes to underreporting business income. How the IRS DIF score rates returns with Schedules C and E (the passthroughs of the business income/expenses to the owner(s) of the business) is a highly-kept secret, but it is pretty common knowledge among tax professionals that the DIF scoring turns up lots of red flags on these taxpayers.
CPAs and Enrolled Agents tend to decline to prepare the returns for business owners who cannot substantiate their returns with accurate books and records, but fly by night seasonal tax return preparation services rarely conduct due diligence on recordkeeping by their clients. Oh, the stories I could (but can't) tell.
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Re: Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Sch
As a student intern (practice teacher), I taught a lesson on " The March King" and "The Waltz King". I taught De Fledermaus and had the 4th grade students flap their arms like bats. Of course they goose stepped to Sousa.keith wrote: ↑Wed Aug 17, 2022 6:35 amMy favorite Sousa.much ado wrote: ↑Wed Aug 17, 2022 12:45 am Do you notice that the music is John Philip Sousa's march, "The Washington Post", which was comissioned by the newspaper in 1889?
https://www.you tube.com/watch?v=peidgSY8A50
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Inflation Reduction Act of 2022 - Climate Change, ACA Subsidies, Medicare, Corp Tax, Deficit Reduction - Manchin Schumer
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