Taxes

[Trades]

Originally Posted by parafly

Yeah, you pay to fill up your boat with thousands of dollars worth of gas, and then go on to say that $120/hr isn't what it used to be and $250K yearly salary is not alot.

My point: yes, it is ... and the reason you don't think so is due to your personal choices and lifestyle.

Whether that is true or not doesn't make anyone else entitled to a larger share of his earnings.

[Trades]

Originally Posted by southparkcpa

Fine but the tax increase on these people will do nothning..absolutely nothing.

It may hurt the restaurants in their neighborhood, cleaners, charities etc as their income decreases but the deficit will grow as will govt spending.

But it will do something it will raise costs because all business costs are always passed on to the consumer in the end. So the average American consumer can expect prices to go up due to these changes.

[parafly]

Originally Posted by southparkcpa

Fine but the tax increase on these people will do nothning..absolutely nothing.

It may hurt the restaurants in their neighborhood, cleaners, charities etc as their income decreases but the deficit will grow as will govt spending.

I agree. I am against tax increases, I am for tax reform. We don't need increased tax revenue levels, we need a simplified tax code. Revenue levels are fine, spending needs to come down.

[HessStation]

Originally Posted by chiefst2000

The problem with all of these arguments is that the baseline that is presented is completely false. When you take entitlement taxes like medicare and social security out of the mix, which is appropriate since those are not true taxes but rather forced savings, the average family making 100K per year in income pays an effective tax rate of around 12%. Even families making around 200K pay effective tax rates right around 15-18%. The is particularly tru for those living in States which have State income tax.This idea that the cap gains and dividend rates are dramatically less then what the average taxpayer pays is simply not true when actual numbers are used. Kicking incetsment income up to 35% then adding state and local taxes in bringing it up to 40+ % would absolutely stifle investment.

My little company just sold to a very big company last year. As a share holder, I essentially took home roughly 55% after all said and done, state feds. That's with cap gains only at 15%.

[Trades]

Denny's to charge 5% 'Obamacare surcharge' and cut employee hours to deal with cost of legislation



By James Nye
PUBLISHED: 00:59 EST, 15 November 2012 | UPDATED: 01:33 EST, 15 November 2012
President Obama's election victory ensured his Affordable Care Act would remain the centerpiece of his first term in power - but that has left some business owners baulking at the extra cost Obamcare will bring.

Florida based restaurant boss John Metz, who runs approximately 40 Denny's and owns the Hurricane Grill & Wings franchise has decided to offset that by adding a five percent surcharge to customers' bills and will reduce his employees' hours.

With Obamacare due to be fully implemented in January 2014, Metz has justified his move by claiming it is 'the only alternative. I've got to pass on the cost to the customer.'

A Florida restaurant owner who runs 40 franchises of the Denny's restaurant chain has threatened to add a five percent surcharge to customers bills in an effort to combat Obamacare

The fast-food business owner is set to hold meetings at his restaurants in December where he will tell employees, 'that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately.'

Claiming that he is not anti-insurance Metz has said that he understands the problems this will cause for his employees.

John Metz also owns Hurricane Grill & Wings which has 48 franchises around the country and falls under the umbrella of his firm RREMC Restaurants

'I think it's a terrible thing. It's ridiculous that the maximum hours we can give people is 28 hours a week instead of 40,' said Metz to the Huffington Post.
'It's going to force my employees to go out and get a second job.'

Obamacare requires businesses or franchises with more than 50 workers must offer an approved insurance plan or pay a penalty of $2,000 for each full-time worker over 30 workers.
The program mandates that only employees working more than 30 hours a week are covered under their employers health insurance plan, chains like Olive Garden and Red Lobster are already considering reduced worker hours.
'Obviously, I'd love to cover all our employees under that insurance,' said Metz.
'But to pay $5,000 per employee would cost us $175,000 per restaurant and unfortunately, most of our restaurants don't make $175,000 a year. I can't afford it.'

Obamacare supporters and protesters gather in front of the U.S. Supreme Court to find out the ruling on the Affordable Health Act June 28, 2012 - the Court upheld the controversial legislation

Several other restaurants including Papa John's, Apple Metro and Jimmy John's have announced plans to skirt Obamacare by reducing employees hours to make them part-time.

Indeed, Metz is adding the surcharge because he believes that eventually firms will be fined for not covering staff who complete over 30-hours in a week,

In November, a poll for Kaiser Health Tracking found that 43 percent of the United States had a favourable opinion of Obamcare, while 39-percent had an unfavourable one.

'Instead of indirectly charging customers by raising prices, he is directly charging and making a political statement,' said Paul Fronstin, director of the health research program at the Employee Benefit Research Institute in Washington.

Here to stay: President Barack Obama's landmark health care legislation has been cemented into law by his re-election

'Potentially 43 percent of this person's customers may find the explicit charge a turnoff, and vote with their feet and their money and choose not to eat there.'

Despite this, Metz has admitted he is willing to take the heat should the decision backfire on him.

'We're trying to get more restaurant operators rallied around the concept of adding a 5 percent surcharge to their bill to cover the costs of Obamacare as opposed to raising prices,' he said.
Earlier this week Papa John's CEO John Schnatter told shareholders in a conference call this week that Obamacare would cost the company 11 to 14 cents per pizza, a cost that would be passed on to customers.

Find this story at www.dailymail.co.uk/news/article-2233221/Dennys-charge-5-Obamacare-surcharge-cut-employee-hours-deal-cost-legislation.html

Published by Associated Newspapers Ltd

[palmetto defender]

Originally Posted by Warfish

I have no idea how you could become so wealthy with such an inaccurate understanding of the way Corporations work.

No sir, it's not yours. You have (via stock ownership) a claim on assets ONLY if the Corporation ends, and less their outstanding liabillities. You cannot walk your stock certificate up to IBM and ask them for $100 woth of stuff in exchange for the stock on your demand.

The Corporation, and yourself, are two absolutely disstinct legal entities. You are not, in fact, an "owner" in the way your're claiming simply because you won stock, and the profit is not yours (the Corporation is under no obligation to issue a dividend).

If the system worked as you claim, where their profits are yopur profits, the reverse would also be true, their liabillities would be your liabillities, and when a company went out of business, you (as the supposed owner) would have to pony up your own personal assets to make good any liabillities outstanding at the time of termination......which clearly does not occur.

And income the business makes is not yours in any legal form until such time as they choose to issue a dividend. Then and only then does the money become income for you.

You're not being taxed twice anymore than my paycheck is taxed twice. I am not my employer, and you are not IBM just because you won a few shares.

Actually I have a very good idea how corporations work.
No I can't go up to IBM and get product. Or any other company. But a piece of the ownership IS mine.
If the company ends (bankruptcy), the liabilities outweigh assets and the BONDHOLDERS have first claim, after primary debt holders. Stockholders get 0. Hence risk. And dividends are a partial reward for risk.
Yes, a corporation is set up with various charters to protect individuals. Size has nothing to do with it. Nor the number of owners.
I, along with others, DECIDE who runs my company.
Let's say it's PD Enterprises. Market cap (stock value) of $10mill. on day one. Of that $2 million is my capital - $8mill someone elses. I own 20%.
Profit year one is $1mill. 20% of that is theoretically mine.
The tax on it is @34%. So PAT is $660k. I paid $68k basically.
If there is a dividend from the $660, I and others pay again.

What if the stock was 100% in my hands. Same situation.
Simplified but the way it is.

[palmetto defender]

Originally Posted by parafly

Yeah, you pay to fill up your boat with thousands of dollars worth of gas, and then go on to say that $120/hr isn't what it used to be and $250K yearly salary is not alot.

My point: yes, it is ... and the reason you don't think so is due to your personal choices and lifestyle.

By now you must know that I joke around. Yes, I do have a boat and yes I use gas. My choice. No complaint. I pay as I go. CPA may not agree with my philosophy but I also have ZERO debt and have not foy years. Debt averse.

[palmetto defender]

Originally Posted by HessStation

My little company just sold to a very big company last year. As a share holder, I essentially took home roughly 55% after all said and done, state feds. That's with cap gains only at 15%.

A beating. You should have called southpark. LOL.

[HessStation]

Originally Posted by palmetto defender

A beating. You should have called southpark. LOL.

My accountant is my friend's brother. I think he did his best, at least i think, LOL!

[southparkcpa]

Originally Posted by HessStation

My little company just sold to a very big company last year. As a share holder, I essentially took home roughly 55% after all said and done, state feds. That's with cap gains only at 15%.

Asset sale or stock sale????


I do a lot of this and you paid about the highest that could be paid.




Tell your CPA to read the martin Ice cream case.

[HessStation]

Originally Posted by southparkcpa

Asset sale or stock sale????


I do a lot of this and you paid about the highest that could be paid.




Tell your CPA to read the martin Ice cream case.

I owned most of my shares. They were given out annually as options that I/we the employee would have to buy based on current evaluations. So only shares owned for at least 1 year were at the lower 15% CG bracket. If memory serves, options that were purchased less than 1 year from sale were even higher.

[Winstonbiggs]

Great thread. What this comes down to is people who are investors have saved money and people who aren't investors haven't.

We are running huge deficits you think we can get more money from those who haven't saved any money or are in debt or those who actually have saved money?

The government needs money and it's going to punish those who save it and give to those who don't. Why make this more complicated than it is?

[HessStation]

Talk about getting screwed, just for **** and giggles, I manage 25% of total volume an probably closer to 40% of gross profit. However I came to the party late where shares were already given out and somewhat deluded. The company sold for 300M and I came away with roughly 40k. Keep in mind my shares were given as options I had to purchase 1 year in advance of sale to get 15% cap gains. Anything else I think, went to 40%?

[Warfish]

Originally Posted by Winstonbiggs

Great thread. What this comes down to is people who are investors have saved money and people who aren't investors haven't.

We are running huge deficits you think we can get more money from those who haven't saved any money or are in debt or those who actually have saved money?

The government needs money and it's going to punish those who save it and give to those who don't. Why make this more complicated than it is?

Describing all investors as "people who saved money" is a rather sizeable oversimplification.

The Govt. needs money, and it is going to get it. One question being asked is, why should those who earn it via labor be taxed at a higher rather than those who earn it via investments.

Now, I've long argued for a flat tax, and I think that applies here. If I work an hour, and make $20 or you invest $1,000 and make $20, the tax rate on that income should be the same. The State should not be playing favorites, pickign winners and losers, via the tax code.

Only the truly poor and disabled should escape this uniform universal tax rate.

[Winstonbiggs]

Originally Posted by Warfish

Describing all investors as "people who saved money" is a rather sizeable oversimplification.

The Govt. needs money, and it is going to get it. One question being asked is, why should those who earn it via labor be taxed at a higher rather than those who earn it via investments.

Now, I've long argued for a flat tax, and I think that applies here. If I work an hour, and make $20 or you invest $1,000 and make $20, the tax rate on that income should be the same. The State should not be playing favorites, pickign winners and losers, via the tax code.

Only the truly poor and disabled should escape this uniform universal tax rate.

All savings, even saving put under a matress is an investment. You have already expossed your complete lack of understanding of investments earlier in the thread. The oversimplification is the thread concept that investment income and wages are part of the same income stream and desereve equal treatment in the tax system.

[Axil]

Originally Posted by Winstonbiggs

All savings, even saving put under a matress is an investment. You have already expossed your complete lack of understanding of investments earlier in the thread. The oversimplification is the thread concept that investment income and wages are part of the same income stream and desereve equal treatment in the tax system.

I agree with your main point. However i do think there is a distinction between investment and savings.

People who put their money "under a mattress", don't have any reasonable expectation of growth. Every definition of investment I've come across requires an expectation of growth.

[Warfish]

Originally Posted by Winstonbiggs

All savings, even saving put under a matress is an investment.

That is incorrect. Money put under a mattress is a net loss, as inflation and time value of money concepts will conspire to reduce the value of that inactive money.

You have already expossed your complete lack of understanding of investments earlier in the thread.

Says the guy who considers money under a mattress an investment?

The oversimplification is the thread concept that investment income and wages are part of the same income stream and desereve equal treatment in the tax system.

Thats not an argument against an equal-taxation system. How the income was earned does not make them different, they are both income. If anything, the fact that one stream requires personal labor, and the other does not would lead one to the idea that investment income should face a higehr tax rate, not a lower one, than that for labor.

There is no "deserve" in a tax system, there is only what we via our representatives feel tax rates should be to serve the purposes and operations of Government.

[MnJetFan]

Originally Posted by parafly

I agree. I am against tax increases, I am for tax reform. We don't need increased tax revenue levels, we need a simplified tax code. Revenue levels are fine, spending needs to come down.

All Obama wants is higher taxes so he has more money to spend. He could careless about the deficit.

[HessStation]

Originally Posted by Winstonbiggs

All savings, even saving put under a matress is an investment. You have already expossed your complete lack of understanding of investments earlier in the thread. The oversimplification is the thread concept that investment income and wages are part of the same income stream and desereve equal treatment in the tax system.

I'm dumb as a bag of rocks...are you talking about cap gains in terms of investment income vs. salary? i don't understand what savings, "under the matress" has to do with it.

[southparkcpa]

Originally Posted by HessStation

I owned most of my shares. They were given out annually as options that I/we the employee would have to buy based on current evaluations. So only shares owned for at least 1 year were at the lower 15% CG bracket. If memory serves, options that were purchased less than 1 year from sale were even higher.

OK..big company. Got it. 83b should have been used.