Double Taxation

[dwspro]

If you hadn’t noticed, the market was body slammed today. Last week’s “mark-‘em-up-into-the-month-end-close” rally is over. Now that the month’s good close is behind us, the market can get back to fretting over oil and daily gasoline price hikes at the pump. The S&P closed down -1.55%.

This tax news came out yesterday and may have flown under the radar for most: Tax-Cheatin-Timmy wants to raise your taxes if you are self-employed.

“Congress,” says Geithner, “has to revisit this basic question about whether it makes sense for us as a country to allow certain businesses to choose whether they’re treated as corporations for tax purposes.”

Small businesses can currently choose to be taxed as a corporation or a variety of other ways such as; partnerships, S-corps, and others. But the guy at the IRS who CHEATED ON HIS OWN TAXES, believes the government shouldn’t give you a choice to be an S-corp and should be DOUBLE taxed.

According to some reports, Tax-Cheatin-Timmy believes his idea would allow the government to tax an additional $3 trillion.

Let’s assume you own a small business and then make the “crazy” assumption that you pay yourself, you would be double taxed as follows.

$100,000 gross
-$15,000 FICA/Medicare
-$29,750 Corporate Income Tax (35%)
$55,250 is the balance which will be taxed again
-$19,338 for Personal Taxes (35%)

You now have $35,912 net income (36% of the gross) to be taxed by the state, county and city.

Boy-howdy this sounds like a great jobs builder! Luckily small businesses don’t generate (cough) many (cough, COUGH) jobs.

Trade well and follow the trend, not the so-called “experts.”

Larry Levin
Trading Advantage