Here is 34 major areas of over spending that would save 100 billion a year... http://www.gao.gov/new.items/d11318sp.pdf Liberals don't seem to care.. http://blog.heritage.org/2011/03/02/morning-bell-why-liberals-love-government-waste/

One of the biggest - if not the single biggest - reason this country has such a high corporate tax rate, yet still generates less overall corporate taxes than other countries is due to the very high percentage of businesses that are structured as "pass-through" tax entities. There are a number of ways that a business/corporation can structure themselves so as not to pay any federal taxes - i.e., S Corps, Partnerships, LLC's, etc... In these instances, income is only taxed when it passes through to the individual returns of the owners and investors. The key to increasing revenue generated from corporate taxation in the U.S. is not to increase the already-high rate, but to broaden the corporate tax base by eliminating most/all of the tax structures that don't require businesses to pay any corporate taxes. I believe I saw a stat somewhere that stated that almost 50% of the business income generated in the U.S. is by corporations that pay no federal income tax because they are structured as one of the available "pass-through" entities.

 

I'll address this..... S Corps and Partnerships are indeed "pass through" entities in that the income passes through to the shareholders/partners who pay income taxes on the income passed through. I doesn't matter if the partnership or S Corp actually distributes cash to the shareholders/partners or keeps the profits in their accounts, because the income is still taxed to the shareholder/partner. Thus, pass-through entities are not creating tax avoidance AT ALL because the income is being taxed to the shareholders/owners. Keep in mind that the top corporate income tax rates and personal income tax rates are 35%. However, as noted in my earlier post, there is a 38% rate for C corps with income in the 15-18 million range.

 

For clarification, LLC's are established in order to provide certain legal protections for its owners. There is no separate tax status for an LLC. A single member LLC is by default a sole proprietor and is taxed the same exact way for federal tax purposes as an unicorporated business owner. A multi-member LLC is by default a partnership for tax purposes and its income is passed through to the members of the LLC. Both a single and multi-member LLC can elect to be recognized as an S Corp by filing Form 2553 with the IRS and income would also be passed through to the members of the LLC as previously described.

What do we overspend on?

 

You do realize the federal budget has risen to 3.73 trillion dollars under Obama. I wasn't happy with the spending growth under Bush. I'm definitely not happy with it under Obama.

 

Rising spending—not low revenues—is driving the long-term budget deficits. By 2020, spending is projected to be 6.2 percent of GDP above the historical average, while projected 2020 revenues are 0.2 percent of GDP above the historical average. Thus, the entire expanded budget deficit will be caused by rising spending, rather than by falling revenues

 

In 2010, the federal government will spend $30,543 per household, collect taxes of $17,879 per household, and run a budget deficit of $12,664 per household.

 

Entitlements account for 56 percent of all federal spending and 14 percent of GDP—up from 10 percent of GDP three years ago.

 

Based on the rate we're going. The federal deficit will be 90% of GDP by 2020.

 

At some point you have to understand that revenue is limited, just like in an household. You set your tax system to bring in a certain percentage of GDP - 18% or so, then you give each section of the government a percentage of the revenues, and they have to live within their means.

 

Lets go with the Michael Moore "money is a national resource" theory and take moey away from all those evil reich people and corporations so we can give it to the poor mistreated middle class.

Lets go with the Michael Moore "money is a national resource" theory and take moey away from all those evil reich people and corporations so we can give it to the poor mistreated middle class.

 

He is such a putz, and has no clue.

Lets go with the Michael Moore "money is a national resource" theory and take moey away from all those evil reich people and corporations so we can give it to the poor mistreated middle class.

 

He is such a putz, and has no clue.

I can't stand to look at him. After seeing that interview I wondered if Mr. Moore wrote his check to the government yet.

What do we overspend on?

Every department of the federal government overspends.

I'll address this..... S Corps and Partnerships are indeed "pass through" entities in that the income passes through to the shareholders/partners who pay income taxes on the income passed through. I doesn't matter if the partnership or S Corp actually distributes cash to the shareholders/partners or keeps the profits in their accounts, because the income is still taxed to the shareholder/partner. Thus, pass-through entities are not creating tax avoidance AT ALL because the income is being taxed to the shareholders/owners. Keep in mind that the top corporate income tax rates and personal income tax rates are 35%. However, as noted in my earlier post, there is a 38% rate for C corps with income in the 15-18 million range.

 

They most certainly are creating some tax avoidance in that they aren't paying any corporate taxes. These businesses pay no separate corporate income tax, as their earnings are only taxed once - on the returns of their owners. As a result of the growth of these pass-through entities, we are now in a situation in which 85% of corporate income tax in the U.S. is generated by less than 0.5% of all C-corps.

 

Corporate taxation is what it is - a type of double taxation in which the corporation pay taxes on their income and then individuals additionally pay tax on the corporation's distributions or on the capital gains of the corp's stock. When half the business income in the U.S. is generated by pass-through businesses not subject to this corporate taxation, it results in a tremendous amount of lost tax revenue. The ultimate result is that we currently have the 2nd highest corporate income rate in the world because we have such a narrow corporate base on which to tax.

 

It is unfair that businesses of similar size and involved in similar activites can structure themselves differently and face different tax rates. Yet at the same time, these pass-through businesses are able to use the same accounting rules and (generally) benefit from the same deductions and credit as corporate businesses. There needs to be a move from a system of one with a high tax rate and narrow tax base to one with a broader tax base and lower tax rate. One of the ways to do this is to require businesses with certain "corporate" characteristics - i.e., publicly-traded businesses; businesses meeting/holding certain levels of income/asset; businesses with large numbers of shareholders - to pay the corporate income tax. This would serve to enlarge the corporate tax base by applying the corporate tax to more businesses, many of whom are now structured as one of the aforementioned "pass-through" entities.

They most certainly are creating some tax avoidance in that they aren't paying any corporate taxes. These businesses pay no separate corporate income tax, as their earnings are only taxed once - on the returns of their owners. As a result of the growth of these pass-through entities, we are now in a situation in which 85% of corporate income tax in the U.S. is generated by less than 0.5% of all C-corps.

 

Corporate taxation is what it is - a type of double taxation in which the corporation pay taxes on their income and then individuals additionally pay tax on the corporation's distributions or on the capital gains of the corp's stock. When half the business income in the U.S. is generated by pass-through businesses not subject to this corporate taxation, it results in a tremendous amount of lost tax revenue. The ultimate result is that we currently have the 2nd highest corporate income rate in the world because we have such a narrow corporate base on which to tax.

 

It is unfair that businesses of similar size and involved in similar activites can structure themselves differently and face different tax rates. Yet at the same time, these pass-through businesses are able to use the same accounting rules and (generally) benefit from the same deductions and credit as corporate businesses. There needs to be a move from a system of one with a high tax rate and narrow tax base to one with a broader tax base and lower tax rate. One of the ways to do this is to require businesses with certain "corporate" characteristics - i.e., publicly-traded businesses; businesses meeting/holding certain levels of income/asset; businesses with large numbers of shareholders - to pay the corporate income tax. This would serve to enlarge the corporate tax base by applying the corporate tax to more businesses, many of whom are now structured as one of the aforementioned "pass-through" entities.

 

How many times is your federal income taxed?

 

S Corps are limited in the number of shareholders to I believe 100 currently. LLC's have no limitation other than the sheer processing that would have to take place if a very large company elected that form of ownership. In both cases they are usually fairly small companies, not the corporate big dogs; although I believe Price Waterhouse may still be the largest LLC. They have tens of thousands of employees world wide.

How many times is your federal income taxed?

 

S Corps are limited in the number of shareholders to I believe 100 currently. LLC's have no limitation other than the sheer processing that would have to take place if a very large company elected that form of ownership. In both cases they are usually fairly small companies, not the corporate big dogs; although I believe Price Waterhouse may still be the largest LLC. They have tens of thousands of employees world wide.

 

Just once and thankfully so.

 

I didn't make up the rules regarding corporate taxation. You would need to speak to Congress about that. But that IS what corporate taxation is all about, whether you or I or anyone else thinks it's fair or not. What isn't fair is to have extremely high corporate tax rates because it's the only way to generate enough revenue to offset the relatively small percentage of businesses (compared to the business sector as a whole) that pays these taxes. The fact is that two businesses can be the same size and operate in the same manner and same environement, yet one has to pay corporate taxes because they're structured as a Schedule C corp and the other does not because they are structured as a pass-through entity.

Just once and thankfully so.

 

I didn't make up the rules regarding corporate taxation. You would need to speak to Congress about that. But that IS what corporate taxation is all about, whether you or I or anyone else thinks it's fair or not. What isn't fair is to have extremely high corporate tax rates because it's the only way to generate enough revenue to offset the relatively small percentage of businesses (compared to the business sector as a whole) that pays these taxes. The fact is that two businesses can be the same size and operate in the same manner and same environement, yet one has to pay corporate taxes because they're structured as a Schedule C corp and the other does not because they are structured as a pass-through entity.

 

And one's owners have to pay tax on the income regardless of distribution while the other owners do not.