State hikes may offset Bush plan

As the president urges tax cuts to spur economy, states from California to Kentucky slash budgets and raise taxes.

Strangest state tax laws

Just wait until PRC Governor Gray-out Doofus comes up with his “solutions” to that state’s budget problems. Strange will be the understatement of the year for those concoctions.

Don’t Hate Me Because I’m Rich

The liberals don’t just hate the super-wealthy, such as Bill Gates. As I’ve explained on several occasions, the definition of who exactly are the dreaded evil rich in this country differs for each tax rule. For example, single persons earning more than $25,000 per year and married couples earning over $32,000 per year are considered evil rich and are required to pay tax on 85% of their Social Security benefits in contrast to the original promise that all benefits would be completely tax free for everyone. Similarly, just as this article describes, a good many senior citizens receive dividend income.

It will definitely be an uphill battle.

Eliminating Taxes On Dividends

As was entirely expected, the lefties are playing the class envy card in their hysteria against the possibility of Bush proposing eliminating the double taxation on corporate dividends. “Tax cuts for the evil rich” is their mantra. Some recent examples of these anti-capitalism rants:

Washington Post Editorial

John M. Berry

Kenneth R. Bazinet

Assuming Bush can resist the desire to make his leftist critics like him, and dividend income becomes tax free to stockholders, it will change tax planning slightly. As I have explained for decades, using a C corporation allows you to reduce your taxes by tens of thousands of dollars each year. To avoid the double taxation, it has been my policy to never take out money from the corporation as dividends. We use expenses that are deductible by the corporation, such as wages, commissions, leases, interest and royalties. If dividends become tax free, these will be added to the equation and used when appropriate.

Shifting income to a C corp will still make a lot of sense. For example, if you are in the 35% bracket on your 1040, you can shift $50,000 to your C corp, where it is taxed at 15%. You will then be able to to have the corp pay you tax free dividends. That would save you $10,000 in Federal income tax alone ($50,000 X 20%). Since most business income would also be subject to the 15.3% Self Employment tax, by running $50,000 of profit through a C corp would save at least another $7,650 in that tax. The actual reduction in SE tax is normally much larger.

KMK

Computer Problems

We’ve all experienced computer bugs, both in software and hardware. In fact, 100% bug-free computers are a figment of our imagination. However, this is the first time I have heard of a computer snake. From the URL, it looks like this was in Australia.

KMK

Another Bogus Argument

The opponents of capitalism are grasping at straws in their propaganda campaign to rally opposition to the elimination of double taxation of corporate profits. The class warfare strategy has been exposed. Now, they are claiming that we can’t make dividends tax free because it would be too difficult to keep track of that on corporate books and 1099 forms. That is absolute hogwash. Nothing could be easier in the world of corporate accounting. Of course, these same people on the left are the ones opposing any military actions because someone might get hurt. Their brains just aren’t hooked up right.

KMK

As someone who is overly right-brained, with no artistic capability, I always appreciate finding examples where others can illustrate my points and save me the standard thousand words. It’s especially good to locate comics that tell the right story. For every one I find that is truthful, there are at least a dozen by the left trying to portray tax cuts and Bush as evil.

I’m sure many people can relate to this situation.