The Obama 2013 Budget. The Gift That Keeps On Giving

[rushmc 23]

He must hate retired people

Quote

President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.

Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[wayneflorida 0]

I read this and I'm confused because any dividend
income I made before was taxed as ordinary income.
Ordinary income = wages + interest + dividend + self employment, etc.)

Is the article confusing dividend income versus capital gains income.

F$$k the tax code

[funjumper101 15]

Tax code fairness, what a concept. So complex that conservatards can't understand why taxing citizens and corporations fairly and equally is NOT hatred for those affected. It is woking towards leveling the playing field.

How about conservatards get a clue about the gross inequities in the tax code?

Prime example, FICA taxes. Why should the 99% pay FICA taxes on 100% of their income, while the 1% pay less, as a percentage of income, as their incomes go up past the cap? Could it be that the 1% have managed to write the tax code to their benefit? Who'd a thunk it? JUst think, the 99% could get a huge tax DECREASE if the income cap was removed. The 1% could actually pay their fair share of a tax that benefits the 99%. The 99% have been paying the bills while the 1% skate. And many of the 99% have been trained to believe that this is a good thing.

Another prime example is the 15% rate on UNEARNED INCOME!! How can any sane person believe that taxing money made by labor/employment must be taxed at HIGHER rates than money made by investments/money diddling? Quite orwellian, when examined critically. Some money is more equal/valuable that others, depending on how it is made.

The situation is totally broken. The owners of the media lead the gullible to believe things that are patently untrue. The same gullible folks end up defending policies that drastically hurt them, while enriching the 1%. The attack on education and critical thinking by the 1% has been REALLY successful.

[rushmc 23]

Taking over for Amazon I see

Good day

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[lawrocket 3]

How come you haven't answered my question of a week ago?

My wife is hotter than your wife.

[wmw999 2,588]

At least one reason there is a cap on how much is paid into SS is because there is a cap on how much can be paid out per month.

It'd be kind of silly to pay in more per month than the maximum possible monthly payout.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[rushmc 23]

Quote

At least one reason there is a cap on how much is paid into SS is because there is a cap on how much can be paid out per month.

It'd be kind of silly to pay in more per month than the maximum possible monthly payout.

Wendy P.

His position is that if you make more, he deserves more of what you make

Your reply will make little sense to him (even though you have a good point)

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kallend 2,148]

Quote

He must hate retired people

Quote

President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.

Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.

I think you missed something.

Let's say the dividend was spent buying something with 6% sales tax. The rate goes to 69.5%. The the store owner pays his employee, taxed at 18%, so the rate now gets to 80.1%. Let's not forget the SSI tax, Medicare tax and state tax, bringing the rate to 91.4%. The employee now buys groceries at a different store, paying sales tax, bringing the rate to 97%. That store owner pays HIS employees, who pay Federal, state and other taxes, so the overall rate is now 110%.

Repeat with every transaction, and soon the tax rate becomes 1,000%, 10,000%, 100,000%, etc.

All of which goes to show the stupidity of calculating taxes the way it was done in your OP.

Besides which, the Supreme Court's conservatives have decided that corporations are people, so the corporation's taxes are not the shareholder's taxes anyway.

...

The only sure way to survive a canopy collision is not to have one.

[rushmc 23]

Quote

Quote

He must hate retired people

Quote

President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.

Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.

I think you missed something.

Let's say the dividend was spent buying something with 6% sales tax. The rate goes to 69.5%. The the store owner pays his employee, taxed at 18%, so the rate now gets to 80.1%. Let's not forget the SSI tax, Medicare tax and state tax, bringing the rate to 91.4%. The employee now buys groceries at a different store, paying sales tax, bringing the rate to 97%. That store owner pays HIS employees, who pay Federal, state and other taxes, so the overall rate is now 110%.

Repeat with every transaction, and soon the tax rate becomes 1,000%, 10,000%, 100,000%, etc.

All of which goes to show the stupidity of calculating taxes the way it was done in your OP.

Besides which, the Supreme Court's conservatives have decided that corporations are people, so the corporation's taxes are not the shareholder's taxes anyway.

All levels of taxation I am sure you are hoping for

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[SkyDekker 1,465]

You have anything to refute his statement?

[lawrocket 3]

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Besides which, the Supreme Court's conservatives have decided that corporations are people, so the corporation's taxes are not the shareholder's taxes anyway.

That delicate moment when a great and logical point is lost by an unrelated point...

My wife is hotter than your wife.

[kelpdiver 2]

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How about conservatards get a clue about the gross inequities in the tax code?

you're showing a lack of one here, man.

Quote

Prime example, FICA taxes. Why should the 99% pay FICA taxes on 100% of their income, while the 1% pay less, as a percentage of income, as their incomes go up past the cap? Could it be that the 1% have managed to write the tax code to their benefit? Who'd a thunk it? JUst think, the 99% could get a huge tax DECREASE if the income cap was removed. The 1% could actually pay their fair share of a tax that benefits the 99%. The 99% have been paying the bills while the 1% skate. And many of the 99% have been trained to believe that this is a good thing.

Uh, it's more like the top 10%. Half the renters in San Francisco - people who can't afford to buy a home - may exceed the cap, but are hardly the 1%. Their rent equals or exceeds the average national gross income.

And these people are paying their fair share - putting over 12k/year into SS despite believing it very unlikely they'll get any return on it at all.

Do you know how SS benefits are calculated? By using the person's top 35 years by income. If you raise the cap, you also raise the income, and therefore the payout. Remove it entirely and you have to determine a new method for benefits.

SS income shouldn't be balancing the budget anyway - that's how we got in this fucking mess. Since Reagan increased the FICA taxes in the 80s, the running surpluses have funded many wars and other toys. Yet the two parties decided it was fine to cut SS funding by nearly 20% (12.4% - 2%) because it was a tax cut they both liked.

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Another prime example is the 15% rate on UNEARNED INCOME!! How can any sane person believe that taxing money made by labor/employment must be taxed at HIGHER rates than money made by investments/money diddling? Quite orwellian, when examined critically. Some money is more equal/valuable that others, depending on how it is made.

... The same gullible folks end up defending policies that drastically hurt them, while enriching the 1%. The attack on education and critical thinking by the 1% has been REALLY successful.

how could you or I join the 1% if our investments are taxed at over 40% (CA state income taxes included)? It's bad enough that our liquid savings accounts, which account for a much larger portion of our net worth, gets taxed at full rates. We benefit from these lower rates too.

[kelpdiver 2]

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He must hate retired people

you snipped out the part that actually matters to retired people. They're not paying the top income rates or would fall under Obama's 'proposed' increases. They're not paying 200k...or if they are they're really not the class of people you imply with saying "retired people."

The question is what will happens to dividend payout levels if the favorable tax policy is removed. After the dotbomb, it was argued that it would be better for all if dividends were taxed lower...this would encourage companies to return their money to their investors rather than blow it on hookers and blow at big parties and acquisitions. But did it actually change behavior? Not sure it did. Philip Morris (Atria) continued to be one of the DRIP kings. And Apple has amassed nearly 100B in cash and *may* now consider issuing a dividend. And the other common source for income (bank stocks) all slashed their dividend to nearly nothing. Not sure it really mattered, or that income payouts would change if they ended the favorable policies.