Politics......the republican spin machine

[mille125]

Go Barack - cut down the hideous profits made by "Big Plumbing"

Obama to Plumber: My Plan Will 'Spread the Wealth Around'

Barack Obama tells a plumber in Ohio he wants to "spread the wealth around," eliciting criticism that his economic recovery plan is socialist in nature.

FOXNews.com

Monday, October 13, 2008

Barack Obama told a tax-burdened plumber over the weekend that his economic philosophy is to "spread the wealth around" -- a comment that may only draw fire from riled-up John McCain supporters who have taken to calling Obama a "socialist" at the Republican's rallies.

Obama made the remark, caught on camera, after fielding some tough questions from the plumber Sunday in Ohio, where the Democratic candidate canvassed neighborhoods and encouraged residents to vote early.

"Your new tax plan is going to tax me more, isn't it?" the plumber asked, complaining that he was being taxed "more and more for fulfilling the American dream."

"It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance for success too," Obama responded. "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody ... I think when you spread the wealth around, it's good for everybody."

Obama's remarks drew fresh criticism on the blogosphere that the Illinois senator favors a breed of wealth redistribution -- as well as a rebuke from the McCain campaign.

"If Barack Obama's goal as President is to 'spread the wealth around,' perhaps his unconditional meetings with Hugo Chavez, Raul Castro, and Kim Jong-Il aren't so crazy -- if nothing else they can advise an Obama administration on economic policy," McCain spokesman Michael Goldfarb said in a written statement to FOXNews.com. "In contrast, John McCain's goal as president will be to let the American people prosper unburdened by government and ever higher taxes."

Obama frequently rails against what he calls a Republican concept that tax breaks for the wealthy will somehow "trickle down" to middle-class Americans.

Obama says he will not raise taxes on anyone making less than $250,000 a year.

However, McCain's aides and supporters argue that Obama wrongly wants to raise taxes on businesses in a time of economic distress.

Both candidates spent Monday discussing how they would resurrect the ailing economy. McCain again pointed to his plan to buy up cumbersome mortgages from homeowners and renegotiate them. Obama unveiled what he called an economic rescue plan for the middle class, which included a 90-day moratorium on foreclosures.

Fox News....now that is one unbiased source........

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[mille125]

This tax plan will hurt us plenty. Ultimately, we - and other small businessmen - will have to lay off employees. However they will be ok because Obama will send them those extra tax dollars so don't feel bad about it. Those laid off employees will be sharing in the success!

Five Things You Might Not Know About Obama's Small Business Tax Hikes

Last update: 11:50 a.m. EDT Oct. 15, 2008
WASHINGTON, Oct 15, 2008 /PRNewswire-USNewswire via COMTEX/ -- ***Record Tax Hike on Small Businesses Will Kill Last Job-Creating Sector***
Americans for Tax Reform today released the following "top five" facts related to the Obama tax hike on small businesses:

1. Two-thirds of small business profits are earned in households making more than $250,000 per year -- the very households Obama is shouting from the rooftops that he will raise taxes on (Source: IRS Statistics of Income
Bulletin*). Small business profits are used to create jobs and invest in
America. This is the answer to the Obama campaign's irrelevant
claim that the number of small businesses affected will be small -- the
fact is that the bulk of profits will face a tax hike.

2. Small businesses pay income taxes at the household level. This means
that the Obama plan to raise tax rates is a direct tax hike on small
businesses -- sole proprietorships, partnerships, S-corporations, and
family farms

3. The tax rate on the lion's share of small business income could
reach 54.9 percent under a President Obama (the individual top rate will
climb from 35 percent to 39.6 percent and the Social Security/Medicare
tax rate could climb from 2.9 percent to 15.3 percent. Put those
together, and you get 54.9 percent) (Source: www.barackobama.com)

4. This 54.9 percent tax rate would be the highest since the Carter
Administration, when America suffered through double-digit inflation and
unemployment (Source: Congressional Budget Office)

5. America's 26 million small businesses employers give a paycheck to
116 million employees (Source: Census Bureau). When small business taxes go up, millions of these employees will be at risk of being laid off.



"Obama's tax increases will only affect you if you have a 401(k), have any savings, buy things from small businesses or are looking for a job," said Grover Norquist, president of Americans for Tax Reform. "If you fall into one of these categories, his policies will screw you. Otherwise, you're fine."

* "Small business profits" is equal to the net profits less net losses of sole proprietors, S-corporation shareholders, and partners. According to the IRS, two-thirds of these small business profits are earned in households with adjusted gross income (AGI) equal to or greater than $200,000. In 2006, $473 billion of the $706 billion (two-thirds) of small business profits was earned in households Obama has said he would raise tax rates on.

I was not aware the Social Security plus Medicare equalled 2.9%. I guess I am paying too much.

 

[Mister Mxyzptlk]

Actually, taxes peaked under Jimmy Carter - yet another reason why I say that Obama will serve Carter's second term.

With the sneaky plan to drop the limit on Social Security taxes (currently capped at $102K of income), we might be launched into a much higher tax bracket than 39.6%. You will be taxed at 6.25% all the way up.

By the way, since employers pay 6.25% their cost will go up, so don't be surprised if salaries drop commensurately, or maybe go to zero as people are laid off.

My daughter is a rabid Obama supporter, attending a very expensive and prestigious school. I just sent her an email asking her if Obama wins will she agree to go to a state school or should I fire one or two employees in order to pay her hideous ($44K/yr) tuition?

I'm waiting to see how far political ideology goes when there is a personal stake involved.

 

[Mister Mxyzptlk]

Fox News....now that is one unbiased source........

Tell us which statement is a misrepresentation by Fox news:

1. the stats from the IRS
2. the statement about S corps, partnerships, sole proprietorships and family farms
3. the stats from the Congressional Budget Office
4. the stats from the Census Bureau
5. Obama's tax plan as documented on his web site

 

[Mister Mxyzptlk]

I was not aware the Social Security plus Medicare equalled 2.9%. I guess I am paying too much.

So you can bump up the calculated tax burden by the correct amount. Let's make it an even 60%. Happier now?

 

[Doctodd]

i found these numbers interesting.....please someone tear them apart as yay or nay.

Obama McCain
If you make... you'd save... you'd save...
less than $19,000 $567 $21
$19,000-$37,600 $892 $118
$37,600-$66,400 $1118 $325
$66,400-$111,600 $1264 $994
$111,600-$161,000 $2135 $2584
$161,000-$227,000 $2796 $4437


If you're in the top 5% of earners:

Obama McCain
you'd pay an extra... you'd save...
$227,000-$603,400 $121 $8159
$603,400-$2.87 million $93,709 $48,862
more than $2.87 million $542,882 $290,708

*Source: Tax Policy Center. Numbers have been rounded. For complete details, go to TaxPolicyCenter.org.

 

[Mister Mxyzptlk]

I'll have to pay an extra $542,882!!??

 

[ERzone]

It's a fact!!

 

[Mister Mxyzptlk]

I don't understand how, if Obama abolishes the cap on FICA and raises the upper bracket to 39.6%, they come up with these numbers. For instance, the difference between $227K and the current cap of $102K is $125K, times 6.25% = $7815. For those of us who are self-employed, multiply that by 2. And that's just the FICA piece.

If you hire a new doc your employer share of FICA on that new hire will run all the way up to his/her full salary. In the past, a new hire making $200K to start would cost you 6.25% of $102K, but with Obama it will be roughly double that.

If I were asked to come up with a way to destroy small businesses, this tax plan is how I would start.

 

[mille125]

I don't understand how, if Obama abolishes the cap on FICA and raises the upper bracket to 39.6%, they come up with these numbers. For instance, the difference between $227K and the current cap of $102K is $125K, times 6.25% = $7815. For those of us who are self-employed, multiply that by 2. And that's just the FICA piece.

If you hire a new doc your employer share of FICA on that new hire will run all the way up to his/her full salary. In the past, a new hire making $200K to start would cost you 6.25% of $102K, but with Obama it will be roughly double that.

If I were asked to come up with a way to destroy small businesses, this tax plan is how I would start.

Correct me if I am wrong, but the last time I looked at the Obama Tax Plan he was proposing a "donut hole" in payroll taxes in the 100K to 250K tax range. In other words you will pay social security tax up until 100K and you will then pay nothing (in social security tax) from 100K to 250K. You and your employer will then pay social security tax again after 250K. This is how Obama is claiming that their will be no tax increase on those making under 250K. So to answer your question about your associate, your tax increase in that scenario will be zero dollars.


Everyone is fixated on the increase of the upper tax bracket from 35 to 39%. Let me remind you that this tax bracket begins near 336K of TAXABLE INCOME which will equate to 400-500K of earnings (you will get many deductions). You then only pay the 39% on the income that exceeds this threshold. For example if you make 340K of taxable income then you only by 39% on 4000 (not on 340K). This will undoubtedly affect some physicians. However the vast majority of physicians make substantially less than this.


I am firmly in the soon to be 39% bracket and using online formulas that are available my actual tax bill increased by less than $4000. It is not the end of the world.

 

[Mister Mxyzptlk]

Thanks for the clarification. A donut hole up to $250K. I'm sure all the pain docs making $250K or less will breathe easier now.

Some day I too want to be rich enough to shrug off a $4,000 tax increase. In the 39% tax bracket that's a lot of ESI's. I suspect that for many others the bite will be much bigger than $4K.

No matter how you slice it, Obama believes in taking the fruits of your labor and giving it to somebody else so they can "share in your success", or some such BS as was explained to Joe the Plumber.

You cannot create wealth by redistributing it. All that does is kill incentive. Let's look at the last great effort at social engineering - the Great Society/War on Poverty. 30 years after inception, that program cost $5.4 trillion dollars (adjusted for inflation). In 1995 that much money would have been enough to buy every factory in America, the maritime fleet, and all of the office buildings with change left over. Yet there was more poverty than when we started.

Obamanomics is BS and Obama himself is an empty suit.

 

[mille125]

Thanks for the clarification. A donut hole up to $250K. I'm sure all the pain docs making $250K or less will breathe easier now.

Some day I too want to be rich enough to shrug off a $4,000 tax increase. In the 39% tax bracket that's a lot of ESI's. I suspect that for many others the bite will be much bigger than $4K.

No matter how you slice it, Obama believes in taking the fruits of your labor and giving it to somebody else so they can "share in your success", or some such BS as was explained to Joe the Plumber.
You cannot create wealth by redistributing it. All that does is kill incentive. Let's look at the last great effort at social engineering - the Great Society/War on Poverty. 30 years after inception, that program cost $5.4 trillion dollars (adjusted for inflation). In 1995 that much money would have been enough to buy every factory in America, the maritime fleet, and all of the office buildings with change left over. Yet there was more poverty than when we started.

Obamanomics is BS and Obama himself is an empty suit.

BS is a good way to describe Joe the Plumber. On further questioning he admitted:

1) He is not a licensed plumber. Both he and his employer will likely face sanctions from his state on this one. This is not good for his job security.

2) He makes 40K (based on 2006 divorce records) and therefore is really in no position to buy the practice that employs him. When confronted with this he admits that he never really made any serious offer to buy the business.

3) Tax records do not support the claim that the business makes $250-280K as he alleges. Tax records reveal that the business makes near 100K.



With all of this said, the tax rate of Joe the Plumber will not change under the Obama plan. When faced with this, he readily agrees. However, he still suggests that he is opposed to Obama because "others" will have to pay more (how altruistic of him). He could have just said that he supports McCain from the beginning and he could have saved us all this exercise.

 

[mille125]

Thanks for the clarification. A donut hole up to $250K. I'm sure all the pain docs making $250K or less will breathe easier now.

Some day I too want to be rich enough to shrug off a $4,000 tax increase. In the 39% tax bracket that's a lot of ESI's. I suspect that for many others the bite will be much bigger than $4K.No matter how you slice it, Obama believes in taking the fruits of your labor and giving it to somebody else so they can "share in your success", or some such BS as was explained to Joe the Plumber.

You cannot create wealth by redistributing it. All that does is kill incentive. Let's look at the last great effort at social engineering - the Great Society/War on Poverty. 30 years after inception, that program cost $5.4 trillion dollars (adjusted for inflation). In 1995 that much money would have been enough to buy every factory in America, the maritime fleet, and all of the office buildings with change left over. Yet there was more poverty than when we started.

Obamanomics is BS and Obama himself is an empty suit.

No it wont. Most people who are in that bracket do not get most of their income from W2 earnings. For those of you making 300-600K or more all in W2 income, heaven help you...

 

[mille125]

Thanks for the clarification. A donut hole up to $250K. I'm sure all the pain docs making $250K or less will breathe easier now.

Some day I too want to be rich enough to shrug off a $4,000 tax increase. In the 39% tax bracket that's a lot of ESI's. I suspect that for many others the bite will be much bigger than $4K.No matter how you slice it, Obama believes in taking the fruits of your labor and giving it to somebody else so they can "share in your success", or some such BS as was explained to Joe the Plumber.

You cannot create wealth by redistributing it. All that does is kill incentive. Let's look at the last great effort at social engineering - the Great Society/War on Poverty. 30 years after inception, that program cost $5.4 trillion dollars (adjusted for inflation). In 1995 that much money would have been enough to buy every factory in America, the maritime fleet, and all of the office buildings with change left over. Yet there was more poverty than when we started.

Obamanomics is BS and Obama himself is an empty suit.

I am not doing cartwheels over it but it is not the end of the world either. If it used to decrease the national debt, help curb our oil dependence, or help educate our children, then it will be far worth it. Only time will tell..


All you Obama haters need to come to terms with whats coming........

 

[Doctodd]

Im coming to terms, although i wouldnt characterize myself as an Obama hater. From my superficial diligence on the issues, ive come to reluctantly support McCain. My reluctance comes from him being in the same party that got us here. I wasnt in business when Clinton was president, but im impressed with the charisma he has/had, and i think we had a huge budget surplus. Now being in private practice, i come to rely on those with more knowledge than me about these political issues.

I take heart in the fact that our president and country will be better off no matter who gets elected. Just Buck Fush and get him out quickly to ruin some other corporation/industry/war/country/baseball team.

 

[Tenesma]

1) first of all... once you make more than 250k, you lose almost ALL of your deductions except for mortage interest (up to a certain amount) and your dependent exemptions.... so 336k of taxable income is true for anybody making over 380k...

2) i am an employer, and i am one of the employees... so, let's say i pay myself a salary of 500k (example) --- that means just for FICA w/ soc. security increase (and taking into account donut hole) i will pay an extra 22k as the employee and an extra 22k as an employer... that 44k COULD have been spent on that front desk assistant to help w/ referrals and other miscellaneous stuff... but heck, who wants to keep people employed - it would be better for me to just get rid of that job and give her responsibilities to my other staff...

3) AND my federal income tax burden will increase by another 17k....

4) because i am sub-chapter S - my business gets the real royal treatment by Obama...

5) the interesting thing is that Obama keeps on repeating the mantra that he is lowering the taxes for 95% of americans.... ... well the top 5% (anybody who earns more than 145k) of americans already pay 60% of ALL tax revenues... so the bottom 95% of americans don't really pay that much to begin with...

I don't mind paying more taxes if it is to pay for 1) national security 2) infra-structure development, etc...

I DO MIND PAYING more taxes if it is for the government to re-package as a credit for the poor --- i don't mind some welfare (i see the results of it in my office every day), but I do mind income distribution... and the democrats are pushing this based on "fairness" --- because I am successful, it is now "fair" for me to hand over my hard-earned money (after many years of work, sweat, blood, tears, and the CONSTANT risk of litigation) to those who spent money on Nike sneakers instead of heating oil, for those who are on disability but can afford $6/day for cigarettes, for those who purchased stuff on credit cards that they couldn't afford to begin with, for those who purchased homes that were out of their league and now want to walk away from those homes?, and the list goes on.

 

[morpheus md]

Thanks for the clarification. A donut hole up to $250K. I'm sure all the pain docs making $250K or less will breathe easier now.

Some day I too want to be rich enough to shrug off a $4,000 tax increase. In the 39% tax bracket that's a lot of ESI's. I suspect that for many others the bite will be much bigger than $4K.

No matter how you slice it, Obama believes in taking the fruits of your labor and giving it to somebody else so they can "share in your success", or some such BS as was explained to Joe the Plumber.

You cannot create wealth by redistributing it. All that does is kill incentive. Let's look at the last great effort at social engineering - the Great Society/War on Poverty. 30 years after inception, that program cost $5.4 trillion dollars (adjusted for inflation). In 1995 that much money would have been enough to buy every factory in America, the maritime fleet, and all of the office buildings with change left over. Yet there was more poverty than when we started.

Obamanomics is BS and Obama himself is an empty suit.

As someone who sincerely hopes to be in that >250,000 tax bracket in a couple of years, I think an extra $4000 is a small price to pay to get the country out of the skid that it is currently in. I am not a Democrat, but my impression is that Obama is much more capable of taking this country to a better place for my son's generation than McCain is. And the future me making +250 K is more able to pay for the necessary improvements than the present me making 50 K.

Sometimes the bottom line isn't always the bottom line, just my .02

 

[Tenesma]

mille --- are you reading the huffingtonpost --- does Paul Begala have a side-office in your clinic?!

i can't believe we are busy dis-crediting the guy who raised the question that led to Obama stating that this is about "spreading the wealth" around.

it is clear that Joe The Plumber is an idiot (for many reasons), but the questions he asked and the answers he got are the key sticking-points here.

i have an idea - since you don't mind paying an extra 4k... why don't you start handing out that money... give $75 a week to a patient who is in financial need... i am sure they will spend it well and further stimulate the economy

see, i don't trust the government with income re-distribution - i'd rather give 10% of GROSS earnings to a charity that I know will spend it well (local church, cancer research, meals-on-wheels)....

i have an idea --- why don't we just all accept a salary of 50k with the guarantee that we get a house, car, gas, food, healthcare, vacations, education, and NO malpractice --- all paid for by the government... that is where we are heading... i have lived in a socialist country, and that SUCKED.

i can tell you the long term implications of this strategy - less jobs, less productivity...

 

[Mister Mxyzptlk]

I am not doing cartwheels over it but it is not the end of the world either. If it used to decrease the national debt, help curb our oil dependence, or help educate our children, then it will be far worth it. Only time will tell..


All you Obama haters need to come to terms with whats coming........

Well it's NOT going to be used for any of those things. This is a bread-and-circuses platform. He's promising people more money if they vote for him by sticking it to the people who are least likely to support him.

"When the people find they can vote themselves money, that will herald the end of the republic." --Ben Franklin

As of 2007, the top 5% of earners in this country (Obama's target population) paid 59% of the personal income taxes. The lowest 40% (121 million people) paid none. http://www.taxpolicycenter.org/numb...ocID=1390&topic2ID=40&topic3ID=41&DocTypeID=2

I guess there is no cap on how many people are we expected to carry.

I don't hate the guy, I am scared to death of him. His own running mate is on record saying he's not fit for the job.

 

[mille125]

1) first of all... once you make more than 250k, you lose almost ALL of your deductions except for mortage interest (up to a certain amount) and your dependent exemptions.... so 336k of taxable income is true for anybody making over 380k...

2) i am an employer, and i am one of the employees... so, let's say i pay myself a salary of 500k (example) --- that means just for FICA w/ soc. security increase (and taking into account donut hole) i will pay an extra 22k as the employee and an extra 22k as an employer... that 44k COULD have been spent on that front desk assistant to help w/ referrals and other miscellaneous stuff... but heck, who wants to keep people employed - it would be better for me to just get rid of that job and give her responsibilities to my other staff...

3) AND my federal income tax burden will increase by another 17k....

4) because i am sub-chapter S - my business gets the real royal treatment by Obama...

5) the interesting thing is that Obama keeps on repeating the mantra that he is lowering the taxes for 95% of americans.... ... well the top 5% (anybody who earns more than 145k) of americans already pay 60% of ALL tax revenues... so the bottom 95% of americans don't really pay that much to begin with...

I don't mind paying more taxes if it is to pay for 1) national security 2) infra-structure development, etc...

I DO MIND PAYING more taxes if it is for the government to re-package as a credit for the poor --- i don't mind some welfare (i see the results of it in my office every day), but I do mind income distribution... and the democrats are pushing this based on "fairness" --- because I am successful, it is now "fair" for me to hand over my hard-earned money (after many years of work, sweat, blood, tears, and the CONSTANT risk of litigation) to those who spent money on Nike sneakers instead of heating oil, for those who are on disability but can afford $6/day for cigarettes, for those who purchased stuff on credit cards that they couldn't afford to begin with, for those who purchased homes that were out of their league and now want to walk away from those homes?, and the list goes on.

Concerning point number 1: You do not seem to understand so let me give you an illustration. You are a pain management doctor. You are in solo practice and in an S Corp or C Corp. You pay yourself 200K in W2 income and 40 K in shareholder distributions. You set up a CCorp to handle your billing and another Ccorp that performs management services. You pay both C Corps a set contract rate of 8k per month (96 K per year). You use the power of c corp deductions to decrease this 96K to 50K (no AMT here). This is very easy to do because things such as annual meeting expenses, achievement awards, medical reimbursement accounts, etc are legitimate C-corp deductions. You also have 200K in real estate gains and 150K in capital gains.

Actual income 200K (W2) + 40K (shareholder distribution) + 96K + 96K + 200K + 150K equals $782,000

Payroll tax is only on 200K because your W2 is the only thing that triggers payroll tax. As I told you earlier this is in the donut hole.

Taxable income 200K + 40K is taxed at the new rate of 36%
96K is reduced to 50K which is taxed at 15% because the first 60K of C corp income is taxed at 15%. You would repeat this exercise for the other corporation.
200K of real estate gains is taxed at 15% if it was held for one year
150K of capital gain will have a new rate of 20%. If it is done inside a corporation it will actually be 0% because Obama will repeal capital gains for small business.


What is the effective tax rate?

240K (36%) plus 392K (15%) plus 150K (20%) equals a total rate of 22%. If the 782K was all W2 you would be an additional $145,000 in tax including the new payroll tax.



Wow you say!!! The rich and ultrarich have been doing this for centuries and will continue to do it under the Obama plan with minimal change in their tax rates. I actually used the Obama new tax rates in these calculations. This is actually a very conservative illustration.




Concerning points number 2,3, and 4: You are doing this to yourself by not changing your s-corp to a c-corp. Talk to a tax advisor.


I have no response to point 5.

 

[mille125]

mille --- are you reading the huffingtonpost --- does Paul Begala have a side-office in your clinic?!

i can't believe we are busy dis-crediting the guy who raised the question that led to Obama stating that this is about "spreading the wealth" around.

it is clear that Joe The Plumber is an idiot (for many reasons), but the questions he asked and the answers he got are the key sticking-points here.

i have an idea - since you don't mind paying an extra 4k... why don't you start handing out that money... give $75 a week to a patient who is in financial need... i am sure they will spend it well and further stimulate the economy
see, i don't trust the government with income re-distribution - i'd rather give 10% of GROSS earnings to a charity that I know will spend it well (local church, cancer research, meals-on-wheels)....

i have an idea --- why don't we just all accept a salary of 50k with the guarantee that we get a house, car, gas, food, healthcare, vacations, education, and NO malpractice --- all paid for by the government... that is where we are heading... i have lived in a socialist country, and that SUCKED.

i can tell you the long term implications of this strategy - less jobs, less productivity...

Remind me again what was his wonderful question? He was simply a McCain supporter who was trying to get attention (and it worked).


Actually I do give to the needy and it far exceeds $75 per week. This year I gave 25K to a free medical clinic. My wife and I have created a foundation which helps the needy in our county. For every deadbeat who is trying to beat the system, there are dozens of hardworking people like you who are in a "bad stretch" and just need a hand. I had a patient and her spouse who are hard working members of society (police officer and nurse). They nearly lost their home and had to file bankruptcy secondary to devastation from a very high medical bill. We were able to save their house and they were very appreciative. Maybe this is why I have a different perspective of this then the rest of you. Yes there are many deadbeats out there, but there are also many hardworking productive members of society as well.

 

[mille125]

Well it's NOT going to be used for any of those things. This is a bread-and-circuses platform. He's promising people more money if they vote for him by sticking it to the people who are least likely to support him.

"When the people find they can vote themselves money, that will herald the end of the republic." --Ben Franklin

As of 2007, the top 5% of earners in this country (Obama's target population) paid 59% of the personal income taxes. The lowest 40% (121 million people) paid none. http://www.taxpolicycenter.org/numb...ocID=1390&topic2ID=40&topic3ID=41&DocTypeID=2

I guess there is no cap on how many people are we expected to carry.

I don't hate the guy, I am scared to death of him. His own running mate is on record saying he's not fit for the job.

well, that remains to be seen. Dont damn him before he gets into office. Give him a chance..

 

[Doctodd]

mille125......those are great explanations. Hopefully that is what will happen and is accurate. Im going to talk to my accountant.

 

[Tenesma]

EXCEPT the IRS will destroy you for not paying yourself a fair salary (and they look at 50% of MGMA for your area as fair salary)...

AND you are forgetting that you still get federal and state income tax on that revenue - so while you have tricked your way out of some payroll tax - OBAMA will still make you pay more because of increases in tax rates for that type of income...

 

[mille125]

EXCEPT the IRS will destroy you for not paying yourself a fair salary (and they look at 50% of MGMA for your area as fair salary)...

AND you are forgetting that you still get federal and state income tax on that revenue - so while you have tricked your way out of some payroll tax - OBAMA will still make you pay more because of increases in tax rates for that type of income...

i challenge you to show me how 200K is not a fair salary for our specialty.....

 

[mille125]

EXCEPT the IRS will destroy you for not paying yourself a fair salary (and they look at 50% of MGMA for your area as fair salary)...

AND you are forgetting that you still get federal and state income tax on that revenue - so while you have tricked your way out of some payroll tax - OBAMA will still make you pay more because of increases in tax rates for that type of income...[/QUOTE]




COMO?

 

[PMR 4 MSK]

This has nothing to do with pain medicine, please move it to another forum.

Maybe it will open it up to others who will similarly accomplish nothing arguing numbers.

 

[pmrmd]

Concerning point number 1: You do not seem to understand so let me give you an illustration. You are a pain management doctor. You are in solo practice and in an S Corp or C Corp. You pay yourself 200K in W2 income and 40 K in shareholder distributions. You set up a CCorp to handle your billing and another Ccorp that performs management services. You pay both C Corps a set contract rate of 8k per month (96 K per year). You use the power of c corp deductions to decrease this 96K to 50K (no AMT here). This is very easy to do because things such as annual meeting expenses, achievement awards, medical reimbursement accounts, etc are legitimate C-corp deductions. You also have 200K in real estate gains and 150K in capital gains.

Actual income 200K (W2) + 40K (shareholder distribution) + 96K + 96K + 200K + 150K equals $782,000

Payroll tax is only on 200K because your W2 is the only thing that triggers payroll tax. As I told you earlier this is in the donut hole.

Taxable income 200K + 40K is taxed at the new rate of 36%
96K is reduced to 50K which is taxed at 15% because the first 60K of C corp income is taxed at 15%. You would repeat this exercise for the other corporation.
200K of real estate gains is taxed at 15% if it was held for one year
150K of capital gain will have a new rate of 20%. If it is done inside a corporation it will actually be 0% because Obama will repeal capital gains for small business.


What is the effective tax rate?

240K (36%) plus 392K (15%) plus 150K (20%) equals a total rate of 22%. If the 782K was all W2 you would be an additional $145,000 in tax including the new payroll tax.



Wow you say!!! The rich and ultrarich have been doing this for centuries and will continue to do it under the Obama plan with minimal change in their tax rates. I actually used the Obama new tax rates in these calculations. This is actually a very conservative illustration.




Concerning points number 2,3, and 4: You are doing this to yourself by not changing your s-corp to a c-corp. Talk to a tax advisor.


I have no response to point 5.

wonderfully elaborate business set-up. the point is it should not have to be that way. its nice to see that you have some good deeds behind your opinions, but your charity was just that--charity, voluntary, and not what will happen with obama. under obama it is forced charity, which is not charity at all. i don't want more of my money going to fund a bigger government than what we have already. this current financial mess is from a GOVERNMENT problem--the government backed bad loans. no commercial bank would loan money to people who couldn't afford it if they didn't have the knowledge they could just unload it to fannie/freddie. government makes problems and this has shown to be true again and again. markets, incentive, and private enterprise solve problems, albeit with a threat of the gov't's heavy hand to keep them straight.

 

[teri78]

I remember when this used to be a pain medicine forum, and not a political bloging site. Those were the good ole days.

 

[Tenesma]

agreed... no more political postings from me on this forum.

 

[Doctodd]

i learned something as it pertains to me and my pain practice, so i appreciate the info. I dont see it as opinion if there are numbers to at least justify it.

 

[mille125]

I think that a debate concerning tax policy and the election of our next president definitely relates to pain medicine. However, if the consensus is to close the thread, feel free and I do not object. I will not discuss it anymore.

 

[Jeff05]

i challenge you to show me how 200K is not a fair salary for our specialty.....

i live in New york city, where 200k is NOTHING. yea, i could move to north carolina, but that's not where i'm from and that's not where everyone i know lives.

what obama fails to see is that 200k means very different things in different parts of this huge country.

physicians have been lumped in the very very bottom of the top tax group. while most of the taxes from this group are derived from multi-millionares and an increase will NOT make much difference in providing them with the things that really matter (nice home, cars, EDUCATION for kids, vacations, retirement, etc). for physicians who just made it into the tax bracket the new taxes are stifling.

DO NOT trust the online calculators. i have sat down with my accountant and a projected salary of 400k will mean 84k MORE in taxes under OBama.

 

[drrinoo]

It is interesting that no one has reframed this discussion from the perspective of time lost (i.e., the tax on time).

Since all of us have a finite amount of time, an increased tax on earned income is ultimately a tax on time, i.e., there is no way to define who is wealthy from the standpoint of how much time they have left.

Physicians have spent an extraordinary amount of time dedicated to work/study and I would argue that physicians (at work) try their best to use time efficiently

If we measured how productively an individual used their time or how stressful an average unit of time is, these tax plans would be seen in a different light--with particular impact on physicians

For example, in an situation with a high tax burden it makes more sense to spend 3-4 hours watching tv instead of 3-4 hours seeing patients. Remember, seeing 3-4 hours of patients generates 1-2 hours of uncompensated administrative tasks.

So, this discussion about taxation should be reframed as a referendum on how much 'time' you have to donate, unwillingly.

 

[mille125]

i live in New york city, where 200k is NOTHING. yea, i could move to north carolina, but that's not where i'm from and that's not where everyone i know lives.

what obama fails to see is that 200k means very different things in different parts of this huge country.

physicians have been lumped in the very very bottom of the top tax group. while most of the taxes from this group are derived from multi-millionares and an increase will NOT make much difference in providing them with the things that really matter (nice home, cars, EDUCATION for kids, vacations, retirement, etc). for physicians who just made it into the tax bracket the new taxes are stifling.

DO NOT trust the online calculators. i have sat down with my accountant and a projected salary of 400k will mean 84k MORE in taxes under OBama.[/QUOTE]




Then with all due respect you and your accountants are doing something wrong in your calculations. Of note the payroll formula will not take effect for 10 years. With deductions 400K of W2 would not even have you in the top bracket which begins at $349K. I just dont understand how your situation could look that bad. If you dont mind sharing your calculation, I would love to see it.....


And, yes, 400-450 K in New york city is in the 50th-80th percentile for pain management...

 

[mille125]

It is interesting that no one has reframed this discussion from the perspective of time lost (i.e., the tax on time).

Since all of us have a finite amount of time, an increased tax on earned income is ultimately a tax on time, i.e., there is no way to define who is wealthy from the standpoint of how much time they have left.

Physicians have spent an extraordinary amount of time dedicated to work/study and I would argue that physicians (at work) try their best to use time efficiently

If we measured how productively an individual used their time or how stressful an average unit of time is, these tax plans would be seen in a different light--with particular impact on physicians

For example, in an situation with a high tax burden it makes more sense to spend 3-4 hours watching tv instead of 3-4 hours seeing patients. Remember, seeing 3-4 hours of patients generates 1-2 hours of uncompensated administrative tasks.

So, this discussion about taxation should be reframed as a referendum on how much 'time' you have to donate, unwillingly.

So I take it that you have found a way to bring in compensation while watching TV (other than being salaried). I understand your reasoning concerning time lost but I dont think I understand your example...

 

[drrinoo]

'watching TV' was meant to be an allegorical reference to work/life balance; specifically, you can spend the time however you wish,i.e., with family, sports, reading, or watching tv

physicians spend a substantial amount of time on uncompensated clinical and administrative care. Hence, if you see patients for x hours a day--you have to spend 1.5 to 2x to generate revenue from those x hours worked. However, most other individuals work x hours and earn x hours (e.g., accountants, lawyers, nurses) and some individuals (tenured professors) work .5-.7x hours and earn x hours worth of income.

the current crop of physicians are seeking greater work life balance--this is in conflict with future demands on doctors--a physician shortage and increased administrative and uncompensated clinical demands.

If a burdensome tax policy is thrown into the mix, physicians may opt to work less and benefit from the increased time with their families, instead of spending it with patients.

It is conceivable that physicians will be paying taxes on hours, in which, they do not make any money or in fact lose money (because of student loans)--with a burdensome tax policy.

So, some physicians may curtail their hours and spend that time engaging in other pursuits--such as spending time with family (something, which many physicians compromised during the healthiest and most vibrant years of their life--their 20s)

annals of internal medicine

 

[lobelsteve]

i challenge you to show me how 200K is not a fair salary for our specialty.....

That is a brazen and reckless statement. Forget the context of stating it as part of a tax declaration. You really drank a lot of that Kool-Aid.

I can see it now. Obamacare will pay me $100k a year to be a doctor. My student loans are $250k, but I'm sure there will be no loan forgiveness. I can move my wife and kid into an apartment, but at least we won't be homeless.

After 2 months of my usual workload, I catch on and scale back my visits to improve the QUALITY of care. At 6 months I'm down to 5 patients a day and no longer doing procedures. Too much malpractice risk for that anymore.
I'd take a side job as a gardener to make some under the table cash and get some sun. Sounds very European.

 

[drusso]

This has nothing to do with pain medicine, please move it to another forum.

Maybe it will open it up to others who will similarly accomplish nothing arguing numbers.

It's okay to have political discussion in this forum as the discussion are coming from the perspectives of those of us in Pain Medicine. Let's just keep it confined to one thread.

Sincerely, Your Moderator

 

[mille125]

That is a brazen and reckless statement. Forget the context of stating it as part of a tax declaration. You really drank a lot of that Kool-Aid.

I can see it now. Obamacare will pay me $100k a year to be a doctor. My student loans are $250k, but I'm sure there will be no loan forgiveness. I can move my wife and kid into an apartment, but at least we won't be homeless.

After 2 months of my usual workload, I catch on and scale back my visits to improve the QUALITY of care. At 6 months I'm down to 5 patients a day and no longer doing procedures. Too much malpractice risk for that anymore.
I'd take a side job as a gardener to make some under the table cash and get some sun. Sounds very European.

Steve, you are taking this out of context. Please go back and read the thread. I was actually talking about a situation in which you could pay some of your salary as W2 and some in dividends. Another responder said that the W2 salary that you take has to be "close to a usual pain management salary according to MGMA". I then said that I thought that paying yourself a W2 salary of 200K would be viewed as "reasonable" by the powers that be.....I did not imply that all pain management docs should be pain 200K.

 

[lobelsteve]

Steve, you are taking this out of context. Please go back and read the thread. I was actually talking about a situation in which you could pay some of your salary as W2 and some in dividends. Another responder said that the W2 salary that you take has to be "close to a usual pain management salary according to MGMA". I then said that I thought that paying yourself a W2 salary of 200K would be viewed as "reasonable" by the powers that be.....I did not imply that all pain management docs should be pain 200K.

I know. I said I was taking it out of context. Fox News Style. But still a scary thing to say. Because the next line from the commentator goes: If that is a "fair" salary, then that is what they all sould get paid. Rich greedy doctors.

 

[mille125]

I know. I said I was taking it out of context. Fox News Style. But still a scary thing to say. Because the next line from the commentator goes: If that is a "fair" salary, then that is what they all sould get paid. Rich greedy doctors.

ok...whatever you say

 

[Mister Mxyzptlk]

well, that remains to be seen. Dont damn him before he gets into office. Give him a chance..

Give him a chance?

He's already helped bring us the sub-prime crisis that has brought the world to its knees. He was an ACORN lawyer who sued Citibank under the CRA and forced them to make sub-prime loans. Google Obama and Buycks-Roberson v Citibank.

ACORN also had a strategy called "direct action" whereby they sent their activists to bankers' home to intimidate them and their families. Obama helped devise these strategies and train ACORN activists.

And BTW, forcing banks to make sub-prime loans was proudly announced by the Clinton administration's Andrew Cuomo on April 6, 1998. During the press conference Cuomo admitted that there would be a higher default rate on these loans. They did it anyway.

The Clinton Administration subsequently forced Fannie Mae to guarantee those bad mortgages. Later on, Franklin Raines, the CEO of Fannie Mae cooked the books so he could make more money. Franklin Raines is now an Obama adviser.

During the Democratic primary debate Obama was asked by Charles Gibson to explain his plan to raise the capital gains tax. Gibson pointed out that historically whenever the capital gains tax was raised, the taxes collected went DOWN, and when capital gains taxes were lowered the revenues from capital gains tax went UP. Obama's reply was, "I would look at raising the capital gains tax for purposes of fairness."

"Purposes of fairness"? That's an economic theory? He is willing to decrease tax revenues in order to be "fair".

This is a recurring Marxist theme of wealth redistribution, most recently exposed in his famous statement, "I think when you spread the wealth around, it’s good for everybody."

I am perplexed that someone who spent a long time giving complicated financial advice on how to avoid paying taxes in one thread suddenly supports tax increases in another thread.

 

[mille125]

Give him a chance?

He's already helped bring us the sub-prime crisis that has brought the world to its knees. He was an ACORN lawyer who sued Citibank under the CRA and forced them to make sub-prime loans. Google Obama and Buycks-Roberson v Citibank.

ACORN also had a strategy called "direct action" whereby they sent their activists to bankers' home to intimidate them and their families. Obama helped devise these strategies and train ACORN activists.

And BTW, forcing banks to make sub-prime loans was proudly announced by the Clinton administration's Andrew Cuomo on April 6, 1998. During the press conference Cuomo admitted that there would be a higher default rate on these loans. They did it anyway.

The Clinton Administration subsequently forced Fannie Mae to guarantee those bad mortgages. Later on, Franklin Raines, the CEO of Fannie Mae cooked the books so he could make more money. Franklin Raines is now an Obama adviser.

During the Democratic primary debate Obama was asked by Charles Gibson to explain his plan to raise the capital gains tax. Gibson pointed out that historically whenever the capital gains tax was raised, the taxes collected went DOWN, and when capital gains taxes were lowered the revenues from capital gains tax went UP. Obama's reply was, "I would look at raising the capital gains tax for purposes of fairness."

"Purposes of fairness"? That's an economic theory? He is willing to decrease tax revenues in order to be "fair".

This is a recurring Marxist theme of wealth redistribution, most recently exposed in his famous statement, "I think when you spread the wealth around, it’s good for everybody."

I am perplexed that someone who spent a long time giving complicated financial advice on how to avoid paying taxes in one thread suddenly supports tax increases in another thread.

My comments to the above rant:

1) Obama is going to win and you will need to come to terms with it.
2) No one is in favor of more taxes. I do not support tax increases. I just find it interesting how so many people are belly aching over it when it is not going to have a big effect. My taxes will go up by under $4000. If this helps us combat some of our many problems then I am for it. I think that everyone will agree that the current tax system is not fair and is legally manipulated by the rich and ultrarich.
3) Bush and the House Democrats have equal blame for the current state of affairs.
4) We can sit here and throw out all kinds of "dirt" on both candidates. Some people may think that it is important. McCain committed adultry and left a disfigured former wife for an rich heirress. Obama has ACORN and Ayers. We can go on and on. If you truly feel that McCain is better equipped to lead us out of the current crises then you should vote for him. Thus far you have not offered any evidence as to why he is more qualified to do this (and neither has his campaign). If choosing Palin is a sign of his judgement, then I am very scared.

5) The financial advice that I gave in another thread is applicable to both an Obama and a McCain white house.

 

[Tenesma]

oh geez

1) he has a good chance of winning - i give you that --- and he can thank the plummeting economy for that boost in numbers

2) your taxes are go up by $4000 --- my taxes will go up by more than that - and based on his payroll taxes it would be advantageous to cut one of my salaried positions...
---- 3.3% of the population earns more than 250k .... and they pay >60% of tax revenues -- that would imply that the rich haven't been very good at lobbying for better taxation...

3) blame for the current crisis: pointless to point fingers --- everybody is to blame --- but the BIGGEST culprits are the american public - purchasing goods without the collateral or income to back it up, has to be the dumbest mistake ever - and now they want to be bailed out.

4) I LOVE the liberals who argue that it is ONLY fair to pay more taxes... THERE IS NOTHING STOPPING YOU FROM SENDING MORE MONEY TO THE IRS.... in some states, they even give you the option to pay at a higher tax rate (ie: Massachusetts)... why don't you send an extra 4k right now?

 

[mille125]

oh geez

1) he has a good chance of winning - i give you that --- and he can thank the plummeting economy for that boost in numbers

2) your taxes are go up by $4000 --- my taxes will go up by more than that - and based on his payroll taxes it would be advantageous to cut one of my salaried positions...
---- 3.3% of the population earns more than 250k .... and they pay >60% of tax revenues -- that would imply that the rich haven't been very good at lobbying for better taxation...

3) blame for the current crisis: pointless to point fingers --- everybody is to blame --- but the BIGGEST culprits are the american public - purchasing goods without the collateral or income to back it up, has to be the dumbest mistake ever - and now they want to be bailed out.

4) I LOVE the liberals who argue that it is ONLY fair to pay more taxes... THERE IS NOTHING STOPPING YOU FROM SENDING MORE MONEY TO THE IRS.... in some states, they even give you the option to pay at a higher tax rate (ie: Massachusetts)... why don't you send an extra 4k right now?

Point #1 I agree with

Point #2 Payroll tax plan will not take effect for 10 years. For the record I do not feel that this is fair as written currently and I am against it. Currently written, a person making 249K pays payroll tax on 102K but a person making 251K pays payroll tax on 251K (the whole amount). This obviously needs to be reworked. If your taxes are going up more than mine (not factoring in the payroll formula) then you either made an error with your calculator or have taxable income greater than 900K (maybe you do and if so I am not mad at ya).

Point #3 I agree with emphatically

Point #4 I laugh at your "why dont you give 4K now" quote. Currently I "give" 10 percent of my income to charity (scholarships at my high school, funding to a free medical clinic, etc.). I can assure you that this amount is many times more than 4K. The 4k cut will unfortunately come out of that.

 

[Mister Mxyzptlk]

Mille125,

Why should I "get used to it"? Did Nancy Pelosi get used to Bush? No, she fought him every inch of the way. Maybe you embrace a bend-over-and-spread-'em-philosophy, but I will continue to fight for my beliefs.

You have an interesting definition of the word rant, which seems to be "stating verifiable facts that you don't like".

You said we should give Obama a chance. I say he had his chance. His justification in 2007 for what he did on the subprime loans was, "It was a good idea at the time". Well, no it wasn't and there were plenty of people who tried to tell the Clinton administration.

I sure hope he has better ideas now, because his attempts at social engineering contributed to the devastation of the meager savings of many, many, poor and middle-class people here and around the world that he supposedly champions. In addition to the lower income people who now have mortgages that they can't afford, hordes of people in the Third World will likely starve to death because of the ill-conceived beliefs he and his ilk hold.

Do you think your $4,000 will do any good if you give it to the government? They spent $5 trillion on the Great Society programs between the 60s and the 90s. Where's the improvement?

You work so hard to shelter your income from taxes. Why do that if you think giving more of your money to the government is so noble? Have you been writing a check to the government every year for an extra $4,000 in taxes? Or did you just discover your altruistic side when Obama ran for President?

This is liberal hypocrisy at its finest. I would love to see if Bono, Barbra Streisand, and Sean Penn end up paying more taxes or if they just have their accountants find a way to hide it.

The more the Government gives you, the more it can take away.

 

[Mister Mxyzptlk]

Point #4 I laugh at your "why dont you give 4K now" quote. Currently I "give" 10 percent of my income to charity (scholarships at my high school, funding to a free medical clinic, etc.). I can assure you that this amount is many times more than 4K. The 4k cut will unfortunately come out of that.

So you really don't plan to pay extra? You will just take it out on the people you donate to.

Now I have to laugh.

 

[mille125]

Mille125,

Why should I "get used to it"? Did Nancy Pelosi get used to Bush? No, she fought him every inch of the way. Maybe you embrace a bend-over-and-spread-'em-philosophy, but I will continue to fight for my beliefs.

You have an interesting definition of the word rant, which seems to be "stating verifiable facts that you don't like".

You said we should give Obama a chance. I say he had his chance. His justification in 2007 for what he did on the subprime loans was, "It was a good idea at the time". Well, no it wasn't and there were plenty of people who tried to tell the Clinton administration.

I sure hope he has better ideas now, because his attempts at social engineering contributed to the devastation of the meager savings of many, many, poor and middle-class people here and around the world that he supposedly champions. In addition to the lower income people who now have mortgages that they can't afford, hordes of people in the Third World will likely starve to death because of the ill-conceived beliefs he and his ilk hold.

Do you think your $4,000 will do any good if you give it to the government? They spent $5 trillion on the Great Society programs between the 60s and the 90s. Where's the improvement?

You work so hard to shelter your income from taxes. Why do that if you think giving more of your money to the government is so noble? Have you been writing a check to the government every year for an extra $4,000 in taxes? Or did you just discover your altruistic side when Obama ran for President?

This is liberal hypocrisy at its finest. I would love to see if Bono, Barbra Streisand, and Sean Penn end up paying more taxes or if they just have their accountants find a way to hide it.

The more the Government gives you, the more it can take away.

Wow, somebody's panties are in a bunch...


Yes sir, blame Obama for the entire mortgage crises. I am sure that it has nothing to do with deregulation of the financial system. I guess that he should also be blamed for the S&L crisis that happened in the eighties. Again, I guess that it had nothing to do with deregulation. Boy, the two meltdowns look remarkably similar. Of course, Reagan and W. deserve no blame for either of these things even though it happened in the middle of their tenures. Of course not they are your heroes. We should never question the wisdom of such American heroes. I guess that the homeowners who took out mortgages that they couldnt afford are also free of guilt. I dont know what I was think by taking a mortgage that was far less than 33% of my income. Next time I'll go for the four million dollar estate. It will give me a reason to blame the democrats........


By the way, I am still waiting for your reason to vote for McCain.

 

[mille125]

So you really don't plan to pay extra? You will just take it out on the people you donate to.

Now I have to laugh.

What's so funny?

I dont understand your point. If the free medical clinic gets 46K instead of 50K, I do not believe that they will be sad. If this is torture or is "taking it out on someone", then sign me up.