47% will pay no federal income tax

[one...two...tree 2,762]

Why should he be able to set aside more into his retirement plan than any other individual? It doesn't make sense that the individual maximums are substantially less than what a small business owner can contribute.

Small business owners don't have the regular cash flow people with paychecks do.

Quit hatin!

The current tax laws for small business owners are designed to help compensate the owner's risk with the idea that if the business flourishes, it will boost the local economy with sales tax and employment. So the tax burden is shifted on to the consumer. I think it's a flawed system. The tax burden, IMO, should be more evenly applied.

[Heracles 417]

Why should he be able to set aside more into his retirement plan than any other individual? It doesn't make sense that the individual maximums are substantially less than what a small business owner can contribute.

Small business owners don't have the regular cash flow people with paychecks do.

Quit hatin!

Bull #######. He has a point. If two people earn $200k, why should the small business owner get one zillion tax breaks, while the employee pays out of their azz. I paid over $55K in federal tax last year, with squat in deductions. I didn't even get a fathers day card from all of the babies I am paying for.

Edited September 30, 2009 by Booyah!

[mawilson 2,133]

Dated 3/27/2008

Invest your entire wad in the right kind of munis and you can wipe out your income tax bill when you live off your savings in retirement (earn too much, though, and your Social Security may be taxed).

...

Despite constant loophole tightening, owning a small business is still a license to deduct. Just a partial list of what can be subtracted from income is dazzling: overhead, salaries and depreciation for equipment; a deduction just for making products in the U.S.; and a $2,400 tax credit in the first year after hiring certain disadvantaged workers.

...

But can all of this add up to zero? Brent Kessel, co-founder of Abacus Wealth Partners in Los Angeles and author of "It's Not About the Money," shared a client's return (without revealing the name). In 2006 the income from his client's business was $749,000, with another $226,000 in interest and rental income making the total taxable income $975,000.

But the owner contributed $733,000 to his own defined-benefit pension plan (which will pay him a taxable income in retirement). After deductions, his income tax came to $30,000, just 3% of his total earnings. "That's not zero, but it's pretty good," says Kessel.

That right there...is outrageous. Why would a small business owner be able to contribute that much more than an individual?

Defined-benefit plans have no contribution limits, but they limit the amount of money you can withdraw each year.

Edited September 30, 2009 by mawilson

[dalegg 143]

Australia's unemployment is at 5.8% and their minimum wage is over $12.70. However, people in the restaurant industry usually get about $15. The difference is that Australia has stopped businesses from profiteering, from cheap illegal aliens. End result is that due to supply restrictions, salaries are higher for all and the demand is there to keep the salaries high. To keep people employed. What's going on in the US market is nothing new. It can actually be seen in numerous 2nd and 3rd world countries. That is, a flood of cheap unskilled labor, combined with the unlivable salaries, which just keep the poor poor. The way the country is heading, eventually the middle class will completely disappear and the economy will transition into rich and poor.

Its a little bit easier for Australia to control illegal immigration and the affects of controlling illegal immigration that the US. If the U.S could somehow end illegal immigration and send everyone home, how would we stop the mobs from coming over the border? What would we do about the newly devastated country just to the South of our border? I would sat that that wouldn't be good for us either.

[mawilson 2,133]

That right there...is outrageous. Why would a small business owner be able to contribute that much more than an individual?

Big difference as he is able to put so much away tax free. Do I get the same luxury?

Yes you do. IRA, 401(k) if you have a job. SEP-IRA, Solo 401(k) if you're self-employed.

[w¡n9Nµ7 §£@¥€r 123]

Dated 3/27/2008

Invest your entire wad in the right kind of munis and you can wipe out your income tax bill when you live off your savings in retirement (earn too much, though, and your Social Security may be taxed).

...

Despite constant loophole tightening, owning a small business is still a license to deduct. Just a partial list of what can be subtracted from income is dazzling: overhead, salaries and depreciation for equipment; a deduction just for making products in the U.S.; and a $2,400 tax credit in the first year after hiring certain disadvantaged workers.

...

But can all of this add up to zero? Brent Kessel, co-founder of Abacus Wealth Partners in Los Angeles and author of "It's Not About the Money," shared a client's return (without revealing the name). In 2006 the income from his client's business was $749,000, with another $226,000 in interest and rental income making the total taxable income $975,000.

But the owner contributed $733,000 to his own defined-benefit pension plan (which will pay him a taxable income in retirement). After deductions, his income tax came to $30,000, just 3% of his total earnings. "That's not zero, but it's pretty good," says Kessel.

That right there...is outrageous. Why would a small business owner be able to contribute that much more than an individual?

Defined-benefit plans have no contribution limits, but they limit the amount of money you can withdraw each year.

In other words, they are defined benefit plans

[mawilson 2,133]

What's the difference? He'll be taxed on that money once he starts drawing it out.

Indeed. You can contribute any amount (even $100m) to a defined-benefit (412(i)) plan, but you can only withdraw $195k/year.

The withdrawal limit alone makes 412(i) useless as a tax shelter.

Edited September 30, 2009 by mawilson

[Heracles 417]

Australia's unemployment is at 5.8% and their minimum wage is over $12.70. However, people in the restaurant industry usually get about $15. The difference is that Australia has stopped businesses from profiteering, from cheap illegal aliens. End result is that due to supply restrictions, salaries are higher for all and the demand is there to keep the salaries high. To keep people employed. What's going on in the US market is nothing new. It can actually be seen in numerous 2nd and 3rd world countries. That is, a flood of cheap unskilled labor, combined with the unlivable salaries, which just keep the poor poor. The way the country is heading, eventually the middle class will completely disappear and the economy will transition into rich and poor.

Its a little bit easier for Australia to control illegal immigration and the affects of controlling illegal immigration that the US. If the U.S could somehow end illegal immigration and send everyone home, how would we stop the mobs from coming over the border? What would we do about the newly devastated country just to the South of our border? I would sat that that wouldn't be good for us either.

Come on Dal. Illegal immigration could be stopped overnight here if the government didn't deliberately turn a blind eye but actually enforced the law. Make e-verify mandatory and fine any employer enough that there would be no incentive to use an illegal alien; even throw in jail time for repeat offenders. Overnight the practice would stop and people would go home. I bet you, that same month, the US unemployment rate would drop, as these millions of small businesses would be required to hire Americans again.

Everyone's SSC should resemble an 'employment authorization card' that legal immigrants receive. Another problem solved regarding ID theft and fraud.

Edited September 30, 2009 by Booyah!

[Heracles 417]

Here is another tax loophole in the US. It's not uncommon to see people living in mansions and driving cars that are clearly above their income bracket. Basically the money is coming in via drugs or others illegal activity. The IRS should be able to ask these individuals to account for what income they used to buy these things. Furthermore, then calculate how much tax they paid and if it matches up on the income needed to buy these things. This is something that GST has managed to reduce.

Edited September 30, 2009 by Booyah!

[dalegg 143]

Australia's unemployment is at 5.8% and their minimum wage is over $12.70. However, people in the restaurant industry usually get about $15. The difference is that Australia has stopped businesses from profiteering, from cheap illegal aliens. End result is that due to supply restrictions, salaries are higher for all and the demand is there to keep the salaries high. To keep people employed. What's going on in the US market is nothing new. It can actually be seen in numerous 2nd and 3rd world countries. That is, a flood of cheap unskilled labor, combined with the unlivable salaries, which just keep the poor poor. The way the country is heading, eventually the middle class will completely disappear and the economy will transition into rich and poor.

Its a little bit easier for Australia to control illegal immigration and the affects of controlling illegal immigration that the US. If the U.S could somehow end illegal immigration and send everyone home, how would we stop the mobs from coming over the border? What would we do about the newly devastated country just to the South of our border? I would sat that that wouldn't be good for us either.

Come on Dal. Illegal immigration could be stopped overnight here if the government didn't deliberately turn a blind eye but actually enforced the law. Make e-verify mandatory and fine any employer enough that there would be no incentive to use an illegal alien; even throw in jail time for repeat offenders. Overnight the practice would stop and people would go home. I bet you, that same month, the US unemployment rate would drop, as these millions of small businesses would be required to hire Americans again.

Everyone's SSC should resemble an 'employment authorization card' that legal immigrants receive. Another problem solved regarding ID theft and fraud.

Yes, but what do we do about all the unemployed in our neighboring country? I'll tell you what, I wouldn't even consider vacationing in Mexico after that!

[mawilson 2,133]

Defined-benefit plans have no contribution limits, but they limit the amount of money you can withdraw each year.

In other words, they are defined benefit plans

I don't know why you think that's funny. They are "defined", but not arbitarily.

For example, you can't "define" it to be 10 million dollars per year - there's a limit ($195k).

[Heracles 417]

Yes, but what do we do about all the unemployed in our neighboring country? I'll tell you what, I wouldn't even consider vacationing in Mexico after that!

Allowing them in your country is not how you deal with it. It's not as if we have highly skilled or educated Mexicans coming here. America has over 50,000,000 living in poverty of its own so it has to deal with it first; yes, almost half the population of Mexico.

Much in the same way China is progressing, as are other developing countries, we need to help build a sustainable economy in Mexico for Mexicans. Mexico actually has some really wealthy people, unfortunately the wealth is held by the majority of them. Letting people in your country to work for cheap and then send money back is not the answer. Not only is it not the answer but it's the fastest way to send your own country into 2nd world status; which in various areas of America, the country is already there.

Edited September 30, 2009 by Booyah!

[dalegg 143]

Much in the same way China is progressing, as are other developing countries, we need to help build a sustainable economy in Mexico for Mexicans.

How do you suggest we do that? Outsourcing is also taboo, right?

[Heracles 417]

How do you suggest we do that? Outsourcing is also taboo, right?

It's in America's interest to lift up the living standard of South Americans as they become potential consumers. It's not as simple as outsourcing either. South America is corrupt. So how do you work around that?

America needs to fix it's own problem with poverty before it can tackle other countries. Rejuvenating the country's crumbling and dilapidated infrastructure would create thousands of jobs. After all, it's exactly how us conservatives back in Aus got the country rolling out of the 1988 recession; to the point where it had not stopped growing or improving since. AKA jobs.

Edited September 30, 2009 by Booyah!

[mawilson 2,133]

Much in the same way China is progressing, as are other developing countries, we need to help build a sustainable economy in Mexico for Mexicans.

How do you suggest we do that? Outsourcing is also taboo, right?

I would start by taxing the ####### out of "remittances" to Mexico and other Latin American countries.

Let the bastards spend the money here, in the USA.