Replies to post #58054 on Zeev's Turnips Patch-No Politics (ZEEV)

[Captain_Jack]

Then there are the business of every size that move offshore to tax havens. TYC is a prime example. Additionally some entertainers with huge incomes will even get a dual or give up their US citizenship to beat the taxman.

[ardent jd]

Zeev, I believe LLC profits flow through to their owners and are taxed at the corresponding rate - i.e. the individual's marginal rate if owned by a person and the corporation's tax rate if owned by a corporation.

[mlsoft]

Zeev...

While I agree with most of your points (Bill Gates probably comes under the AMT) I would much prefer a complete overhaul of the tax system rather than more tinkering around with the Rube Goldburg tax laws that we now have. I would favor a modified flat tax, but would be open to other ideas.

From the spending side, I would like to eliminate transfer payments to state and local governments, where the Federal government taxes everybody only to send the money (less a large bureaucratic fee) back to the states - why not let the states handle their own taxation? Why is the Federal government supporting so many projects that are not in its purview under the Constitution?

Like I said earlier, it would probably take a revolution.

mlsoft

[Chris McConnel]

Zeev, unless someone has been self-employed, i don't think they realise how big a bite social security taxes take out of their income.

-Chris

[Laser]

Zeev....although your calls have been very good this year, I have a hard time figuring in a rally during the next 3 - 4 weeks with war being imminent. In fact, some people are even projecting the war to start on January 16. Other than your techncal indicators, how do you think the market can climb this big of a "wall of worry"...or is the war factor already priced in?

Bye the way....if you use me as an indicator...your call usually comes through right after I start questioning the Turnips <G>

[klono]

Zeev Hi,
I registered with I-Hub simply to commend your extremely insightful post. Your analysis, as well as your remedy was right on. Most people in a position to effect such a change are ignorant of one or both of the components of the problem/solution (eventhough they are not complex in nature). That is to say they do not understand the technical aspects of the tax code or the Gates, Dell, etc. exercise options, sell millions of shares of long-term holdings at market (capital gains), then use the cash in the Corp to buy on the open market so as to prevent dilution.
For your information, an LLC can elect to be taxed as a partnership, C corp, or an S corp if they qualify.
The AMT is a disgrace (jmho).
Ready the Bastille!

klono

[Larry Brubaker]

Zeev, in discussing whether a tax system is progressive or regressive, I'm not sure whether two examples (your wife versus Bill Gates) is sufficient to prove it to be progressive or regressive. Further, I'm not sure your wife's situation (self-employed, paying both the employer and employee's payroll taxes) is very representative. Certainly Gate's situation is not very representative. And as a another poster pointed out, Gates would likely be subject to the AMT, which could have the effect of significantly raising his marginal rate above the capital gains and super capital gains rates.

Having said that, I think the changes you propose to the tax system in the second half of your post make a lot of sense (although the changes you propose would seem to have little impact on the progressivity or regressivity of the tax system).