Terrific: Senate Dems offset cost of student loan bill with higher taxes on small business

posted at 12:41 pm on April 26, 2012 by Morgen Richmond

Let the games begin. With Romney expressing his support earlier this week for extending the freeze in student loan interest rates, defusing this as a wedge issue just as the President was embarking on his college tour, Democrats in the Senate have decided to counter with, what else, the class warfare card. Via Bloomberg (emphasis added):

Senate Democrats and the White House are seeking a one-year freeze in the interest rate. The $6 billion cost would be offset by limiting a tax provision that allows some owners of so-called S-corporations to avoid paying Medicare payroll taxes on their earnings, Senator Tom Harkin, an Iowa Democrat, told reporters yesterday.

Harkin said the legislation would require the Medicare payroll tax on income of more than $250,000 a year earned at S-corporations with fewer than three shareholders.

“This is a loophole that needs to be closed anyway,” he said. “So this is the right time to do it and for the right cause.”

Current law exempts the profits earned by S-corporations from Social Security and Medicare taxes, taxing only the salaries earned by shareholders who are employed by these firms. The IRS requires the allocation of reasonable compensation for work performed, so closely held S-corporations cannot (legally) classify all of their net income as profits, thus bypassing these payroll taxes. To call it a “loophole” is disingenuous. It’s no more a loophole than hundreds of other avenues through which businesses and individuals can cheat on their taxes, if they are willing to subject themselves to the consequences of breaking the law.

Millions of small, family owned businesses around the country are classified as S-corporations, and would be caught up in this tax net for no reason other than that they are small, and successful. And keep in mind that the profits which are credited to shareholders of S-corporations often remain in the business, funding the salaries of new employees and other investments.

The worst of it is that this a new, permanent tax on small businesses – $9 billion over 10 years according to the CBO -  to fund the cost of just one year of the interest rate freeze ($6 billion). If this is the “right cause” then the cause isn’t long-term financial relief for college students, it’s the re-election prospects of Democrats in November.

Backing this bill would be a dangerous precedent to set ahead of the real class warfare battle to come this summer, and thus Republicans in Congress, as well as the Romney campaign, should withhold their support unless another means is found to pay for it.


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Question: What about the family-owned S-Corps where the very owners are still paying off student loans?

Dem Answer: Republicans want to protect Big Oil and the 1%.

nitzsche on April 26, 2012 at 1:45 PM

How about we teach people to PAY THEIR OWN DAMN BILLS? What a concept.

dogsoldier on April 26, 2012 at 1:41 PM

We can’t have that now, can we? Personal responsibility for one’s own actions/decisions? Horrors. Oh, the humanity! /s (Do I really need the sarc tag?)

totherightofthem on April 26, 2012 at 1:46 PM

All this for an extra $7500. Wow, they’re getting away with murder.

LilyBart on April 26, 2012 at 1:40 PM

LOL. So it’s ONLY $7500, but if that $7500 is taxed it’s the end of the Republic and a million small businesses will fail.

I love the logic.

angryed on April 26, 2012 at 1:46 PM

BRILLIANT MOVE ON THE PART OF THE DIMMOCRITS!

I’m gonna have to stop calling them “dim” since they routinely CHUMP THE REPUBLICANS!!

Bottom line – both parties have done NOTHING but grow this government and it’s entitlement systems for the last 70 years. AT LEAST the Dims have a plan to pay for it – and that is by confiscating (ultimately) the pay checks of every living American. Republicans? Hell, they have NO PLAN. They gave us Medicare Part D – the biggest expansion of the entitlement state since the New Deal – and the sombishes didn’t have the balls to pay for it by cutting government someplace else – or even raising taxes.

Looks to me like Team GOP Establishment is all about giving out the cookies and promising that no one will get fat off them!

Only a SLAVE would believe in those chumps.

HondaV65 on April 26, 2012 at 1:46 PM

Where are the Republican Senators on this?

lea on April 26, 2012 at 12:57 PM

McConnell responded. “I don’t even know who Tom Harkin is…”

riddick on April 26, 2012 at 1:47 PM

We need to start playing their games. Offer a student loan bill paid for with pay freezes and staff reductions for federal employees. See how they like warfare.

thirtyandseven on April 26, 2012 at 1:48 PM

Exact same job? Are you saying there are two employees of a company who both make $150k…but one of them decides he is going to run his salary through a S-Corp? I admit I don’t know much about how that works but wouldn’t there be some tax liability to the employer if he allowed that to happen?

Ditkaca on April 26, 2012 at 1:39 PM

Sure. Happens all the time. Employees quit their job or are laid off, go back and do literally the exact same job as a “consultant”.

angryed on April 26, 2012 at 1:48 PM

Wow, sure would be cool if the GOP controlled the Senate and couldn’t do such maneuvers, eh Sharron Angle and Christine O’Donnell lovers?

TheLastBrainLeft on April 26, 2012 at 1:48 PM

And no Ditkaca, there is no tax liability to the employer.

angryed on April 26, 2012 at 1:48 PM

Sure. Happens all the time. Employees quit their job or are laid off, go back and do literally the exact same job as a “consultant”.

angryed on April 26, 2012 at 1:48 PM

Its called State (or Federal) Government. You pegged it.

riddick on April 26, 2012 at 1:49 PM

Where are the Republican Senators on this?

lea on April 26, 2012 at 12:57 PM

McConnell responded. “I don’t even know who Tom Harkin is…”

riddick on April 26, 2012 at 1:47 PM

But then his spokesman helpfully volunteered that he “personally knew” at least three people named Tom Harkin.

thirtyandseven on April 26, 2012 at 1:49 PM

and the sombishes didn’t have the balls to pay for it by cutting government someplace else – or even raising taxes.

HondaV65 on April 26, 2012 at 1:46 PM

They paid for it with debt and inflation.

FloatingRock on April 26, 2012 at 1:50 PM

angryed on April 26, 2012 at 1:29 PM

oh its about being fair??? i get it, cause its so fair that the top 1% pays over 40% of the taxes??? well by all means lets make things fair!!

chasdal on April 26, 2012 at 1:35 PM

You’re babbling nonsense again.
Yes it’s unfair if I make $300K as a W2 employee but you make $300K as an s-corp doing the same thing but I pay an extra $5800 in taxes.

angryed on April 26, 2012 at 1:51 PM

Where are the Republican Senators on this?

lea on April 26, 2012 at 12:57 PM

McConnell responded. “I don’t even know who Tom Harkin is…”

riddick on April 26, 2012 at 1:47 PM

That’s weird, Jay Carney knows at least three.

Lily on April 26, 2012 at 1:52 PM

Its called State (or Federal) Government. You pegged it.

riddick on April 26, 2012 at 1:49 PM

Happens in the private sector as well.

angryed on April 26, 2012 at 1:53 PM

Land of opportunity equality of outcome.

rogerb on April 26, 2012 at 1:53 PM

Lily on April 26, 2012 at 1:52 PM

thirtyandseven on April 26, 2012 at 1:49 PM

^^ I win. :P

thirtyandseven on April 26, 2012 at 1:53 PM

Backing this bill would be a dangerous precedent to set ahead of the real class warfare battle to come this summer, and thus Republicans in Congress, as well as the Romney campaign, should withhold their support unless another means is found to pay for it.

This is NOT helping College students.

What this is and if extended would do is allow Colleges to charge even more in tuition and fees. They have scalped College students for the last decade like crazy. They raised cost 25% during Obama while there was no inflation to speak of.

Thus to boil this down.

Romney supports stealing money from someone to make College Corporations even richer. The thing I hate most about Obama.

Furthermore this favors one college student over another. Though it really does not. It just allows college students the ability to pay the exorbitant fees colleges are stealing from us the taxpayers.

Steveangell on April 26, 2012 at 1:55 PM

So young voters are selfish and care more about Jersey Shore than national issues?

Happy Nomad on April 26, 2012 at 1:43 PM

I’m not sure what you are trying to say. Most people are selfish and tend to focus on the two or three issues that most directly impact them when it comes to making election decisions. The exact same can be said for a conservative in Montana whose main interaction with the government is paying his taxes. He is most likely to be focused on the candidates that lower them.

The Democrats are offering cash in the pockets of college students. If Republicans allow the discussion to be framed such that they are slapping it away for no reason, they are losing. Most people, regardless of ideology will take something when offered, and will get irritated if someone else steps in and says, “No, you can’t have that”.

oconp88 on April 26, 2012 at 1:55 PM

FloatingRock on April 26, 2012 at 1:44 PM

and the class warfare just keeps on coming!!

chasdal on April 26, 2012 at 1:55 PM

That applies to both parties. America is in trouble and the problems that afflict our nation are on core matters that both parties have the same positions on. Where the parties differ are on some fringe issues that they use to lure in special interest groups, but overall they really are the same. We need to fix the problems right now, at the core, which means we need new parties that have solutions to those core problems.

FloatingRock on April 26, 2012 at 1:33 PM

Well, there’s nothing stopping you. It MIGHT take you 50 years, though, before you have built up enough infrastructure and support for a party to run for President. You would have to start in the states and begin electing people to local and state offices. You have to get voters for your party and build a policy track record. You need to win AT LEAST one state in order to get ANY electoral votes. Think about how hard that is. You need the popular vote in an entire state.

That is actually one reason why I favor a system where a candidate gets two electoral votes for winning the state popular vote, and collects one electoral vote for each congressional district they win. This does not change the number of electoral votes, it simply changes how they are allocated and states can do that with no changes needed at the federal level. The impact of that would be enormous. Huge areas in the center of the country that are currently “flyover” territory because those states electoral votes are swamped by large populations in the major metro suddenly become important again. The rural populations are no longer disenfranchised by the urban populations. But it would also allow third parties to collect some electoral votes and that is why none of the politicians of the current two parties will allow it in most states. Pennsylvania was the latest to try and fail at that system. Colorado tried it previously and failed. It would be the camel’s nose under the tent for the establishment parties and they won’t go for it.

If you want to see how to do it, look at how the Modern Whig Party is doing it. They aren’t running a candidate for President and have no plans to until they have a reasonable Congressional caucus. Right now they are concentrating only on state and local offices.

crosspatch on April 26, 2012 at 1:56 PM

Romney supports stealing money from someone to make College Corporations even richer.

You think?

GULAG (aka CA) last year published salaries for UC staff, some reached $600K, just salaries and no other perks included. A good number were over $200k per year. And yet UC is pretty much broke. Hmmm… I wonder why.

riddick on April 26, 2012 at 1:57 PM

Question: What about the family-owned S-Corps where the very owners are still paying off student loans?

Dem Answer: Republicans want to protect Big Oil and the 1%.

nitzsche on April 26, 2012 at 1:45 PM

They make over $250K and are paying off student loans?

angryed on April 26, 2012 at 1:57 PM

angryed on April 26, 2012 at 1:51 PM

cut the crap, life aint fair. and by trying to use gov’t to make it your view of “fair” you hurt the more productive people in society.

chasdal on April 26, 2012 at 1:58 PM

and the class warfare just keeps on coming!!

chasdal on April 26, 2012 at 1:55 PM

The only “class” I oppose is the crony-capitalist class that is racking up all the debt and inflation bailing themselves and their cronies in labor, industry and government out for their misdeeds.

FloatingRock on April 26, 2012 at 1:59 PM

cut the crap, life aint fair. and by trying to use gov’t to make it your view of “fair” you hurt the more productive people in society.

chasdal on April 26, 2012 at 1:58 PM

Are you this much of an imbecile?

Both people DO THE SAME THING. That means they are equally productive since for the 3rd time, THEY DO THE SAME THING. But one pays more tax than the other based on what paperwork has been filed.

Is it so hard for you to take the Rush/Sean glasses off for a second and analyze this on your own?

angryed on April 26, 2012 at 2:00 PM

Sure. Happens all the time. Employees quit their job or are laid off, go back and do literally the exact same job as a “consultant”.

angryed on April 26, 2012 at 1:48 PM

Who pays for their Healthcare? What about the Workman’s Comp? Is Consultant work guaranteed work? Is it easy to leave a $150k job for a few thousand extra a year but take all the risk associated with business ownership?

Ditkaca on April 26, 2012 at 2:00 PM

angryed on April 26, 2012 at 1:51 PM

cut the crap, life aint fair. and by trying to use gov’t to make it your view of “fair” you hurt the more productive people in society.

chasdal on April 26, 2012 at 1:58 PM

You keep forgetting that you’re talking to a communist.

Their motto:

What’s mine is mine.
What’s yours is mine.

riddick on April 26, 2012 at 2:00 PM

Look at the top 20 donors to Obama’s campaign so far in 2012 and tell me who has the “crony capitalism” angle for academia:

Microsoft Corp $304,690
DLA Piper $302,527
University of California $243,486
Sidley Austin LLP $234,611
Google Inc $191,719
Harvard University $177,408
Comcast Corp $164,862
Skadden, Arps et al $145,809
Morgan & Morgan $130,145
Time Warner $116,939
US Dept of State $115,757
Stanford University $103,483
US Government $101,149
Kaiser Permanente $100,100
Mayer Brown LLP $99,657
Jones Day $97,100
University of Chicago $96,152
Columbia University $95,077

Wilmerhale Llp $93,605
Debevoise & Plimpton $93,526

Note: University of California was Obama’s #1 source of campaign funds during the 2008 election.

crosspatch on April 26, 2012 at 2:04 PM

Who pays for their Healthcare? What about the Workman’s Comp? Is Consultant work guaranteed work? Is it easy to leave a $150k job for a few thousand extra a year but take all the risk associated with business ownership?

Ditkaca on April 26, 2012 at 2:00 PM

Spouse usually covers health care. Which is primarily the reason people do it. Employers are willing to pay a higher wage without the need to provide ultra expensive benefits. In exchange, you’ll take the higher wage not needing benefits since a spouse’s employer covers the entire family. It’s a nice little loophole and it’s a win-win for everyone involved.

Workman’s comp doesn’t really apply to white collar consulting gigs.

Is consultant work guaranteed? LOL. Is any job guaranteed? Actually consulting is more steady BECAUSE, you cost less than an employee due to not having the added costs of benefits.

Chances are you work with people who are not employees but you’d never know it since aside from paperwork, they look and act like any other W2 employee.

angryed on April 26, 2012 at 2:05 PM

angryed on April 26, 2012 at 1:57 PM

yeah, looks like some people making good money still have student loans

chasdal on April 26, 2012 at 2:06 PM

FloatingRock on April 26, 2012 at 1:59 PM

oh!!! just that “class” well, okay than.

chasdal on April 26, 2012 at 2:06 PM

crosspatch on April 26, 2012 at 2:04 PM

damn he’s making bank off the State Dept.

Patronage FTW!

thirtyandseven on April 26, 2012 at 2:07 PM

Yes it’s unfair if I make $300K as a W2 employee but you make $300K as an s-corp doing the same thing but I pay an extra $5800 in taxes.

angryed on April 26, 2012 at 1:51 PM

Both people DO THE SAME THING. That means they are equally productive since for the 3rd time, THEY DO THE SAME THING. But one pays more tax than the other based on what paperwork has been filed

So you are saying the two people doing the same thing and are equally productive should not only be paid the same they should pay the same taxes?

Ditkaca on April 26, 2012 at 2:08 PM

They make over $250K and are paying off student loans?
 
angryed on April 26, 2012 at 1:57 PM

 
Too easy.
 

“Check this out, all right. I’m the president of the United States. We only finished paying off our student loans off about eight years ago.”
 
- President Barack H. Obama, April 24, 2012

rogerb on April 26, 2012 at 2:08 PM

angryed on April 26, 2012 at 2:00 PM

you mad bro??? maybe you need to take that chip off your shoulders and stop blaming others for your failures in life. and stop depending on the gov’t to fix things for you. you’ll feel much better about yourself if take responsibility for the things that happen.

chasdal on April 26, 2012 at 2:08 PM

Just try to get a mortgage or even a car loan if you are self-employed. You need “income insurance” or you can’t even buy a car. It is funny to watch people who have never tried to run a business in their life try to tell other people how business owners have it so easy.

If there is ONE experience I believe every American should have aside from spending at least two years in a foreign country, it would be running a business of their own. NOTHING brings home how absolutely idiotic our government can be better than trying to run a business. Oh, and try it in California.

crosspatch on April 26, 2012 at 2:08 PM

angryed on April 26, 2012 at 2:00 PM

You really need to stand in front of the mirror, look yourself squarely in the eye, and declare that THIS is going to be the day that I stop being a tool.

Happy Nomad on April 26, 2012 at 2:09 PM

LOL. So it’s ONLY $7500, but if that $7500 is taxed it’s the end of the Republic and a million small businesses will fail.

I love the logic.

angryed on April 26, 2012 at 1:46 PM

You know what “logic” I hate? “You have money, so hand it over”.

You and your kind are the greedy little people. And in the end, your ideas fail.

LilyBart on April 26, 2012 at 2:11 PM

Look at the top 20 donors to Obama’s campaign so far in 2012 and tell me who has the “crony capitalism” angle for academia:

crosspatch on April 26, 2012 at 2:04 PM

At least Obama has released his list of top 20 donors and bundlers. The last I heard, which was about a week ago, Romney had refused:

FloatingRock on April 26, 2012 at 2:11 PM

Just try to get a mortgage or even a car loan if you are self-employed. You need “income insurance” or you can’t even buy a car. It is funny to watch people who have never tried to run a business in their life try to tell other people how business owners have it so easy.

crosspatch on April 26, 2012 at 2:08 PM

You need 2 years of 1099 income and you’re got to go for a mortgage. Income insurance, on what planet? Sean/Rush are rotting your brain beyond repair amigo.

angryed on April 26, 2012 at 2:12 PM

You know what “logic” I hate? “You have money, so hand it over”.

You and your kind are the greedy little people. And in the end, your ideas fail.

LilyBart on April 26, 2012 at 2:11 PM

You don’t know anything about logic. All you know is how to parrot Sean/Rush talking points.

angryed on April 26, 2012 at 2:12 PM

you mad bro??? maybe you need to take that chip off your shoulders and stop blaming others for your failures in life. and stop depending on the gov’t to fix things for you. you’ll feel much better about yourself if take responsibility for the things that happen.

chasdal on April 26, 2012 at 2:08 PM

WTF? When have I said I want the govt to fix anything for me? I said s-corps are nothing more than a tax dodge. And it’s good that finally someone is fixing it.

This is your brain.
This is your brain on Rush/Sean.

angryed on April 26, 2012 at 2:14 PM

You don’t know anything about logic. All you know is how to parrot Sean/Rush talking points.

angryed on April 26, 2012 at 2:12 PM

provide some linkage showing proof. i wanna see documentation of the talking points and then documetation of the accused using those talking points.

chasdal on April 26, 2012 at 2:15 PM

“Check this out, all right. I’m the president of the United States. We only finished paying off our student loans off about eight years ago.”

– President Barack H. Obama, April 24, 2012

rogerb on April 26, 2012 at 2:08 PM

Fair enough. I suppose at 1% interest or whatever it is, you’re better off keeping the loan over 30 years.

angryed on April 26, 2012 at 2:15 PM

Yes it’s unfair if I make $300K as a W2 employee but you make $300K as an s-corp doing the same thing but I pay an extra $5800 in taxes.

angryed on April 26, 2012 at 1:51 PM

Bzzzt. Wrong, you don’t understand the law. Big surprise, I know.

As an S-Corp you pay salaries. If you are the only employee of an S-Corp and the S-Corp earns $300k and you pay yourself $300k then you pay the exact same taxes as if you were a W2 employee. Because you are a W2 employee at your S-Corp. But your taxes will actually feel somewhat higher because your company will also be paying the other half of your FICA taxes, where as if you were working for someone else, those taxes are taken care of by the tax fairy.

The benefit of an S-Corp is that if you want to pay yourself less than the total the company has earned, you can do so. Thus you can build up funds for your company to use to buy equipment or land or a building or whatever. But, if you use them on yourself for non-business expenses, and don’t report that as income, you are breaking the law.

With a sole-proprietorship (aka, an LLC with only one owner), all of the income would be considered your income, and would be taxed at your incomes tax rates. There is no ability to let the company hold onto the money.

strictnein on April 26, 2012 at 2:16 PM

angryed on April 26, 2012 at 2:14 PM

you want the gov’t to “fix” this so that these corps pay taxes they dont currently pay. you been whining about it on this board for 2 pages now.

chasdal on April 26, 2012 at 2:16 PM

NOTHING brings home how absolutely idiotic our government can be better than trying to run a business. Oh, and try it in California.

crosspatch on April 26, 2012 at 2:08 PM

Corporations like to use crony-government to promote excessive regulation to ace out new competitors. Same with the tax code, designed by special interests.

Get rid of the cronyism, (unions, corporate and government), and America will be free again and can once again prosper. Let the markets correct and the mal-investment of irresponsible people will be shaken out of the system and more responsible people will be the beneficiaries and will be rewarded for their responsible behavior.

FloatingRock on April 26, 2012 at 2:16 PM

provide some linkage showing proof. i wanna see documentation of the talking points and then documetation of the accused using those talking points.

chasdal on April 26, 2012 at 2:15 PM

Sean/Rush has only 1 talking point: Republican good, Democrat bad and a corollary…everything Democrat does, bad; everything Republican does good

angryed on April 26, 2012 at 2:17 PM

You need 2 years of 1099 income and you’re got to go for a mortgage. Income insurance, on what planet? Sean/Rush are rotting your brain beyond repair amigo.

angryed on April 26, 2012 at 2:12 PM

I have actually owned my own business before and actually had to obtain “income insurance” in order to get a loan. The reason is .. I get sick for a week or two, I don’t work. I don’t work, I don’t get paid. I don’t get paid, loan payment might be at risk. Bank wants to make sure I get income so they get income.

Unlike employees, a self-employed sole proprietor doesn’t get “sick leave” and the business makes no many of the proprietor is ill or at the very least income drops as work volume drops. I also had an employee. THAT was a major pain in the hips.

Your pontification via rectal extraction is obvious. Please try to stick to subjects on which you have some real experience.

crosspatch on April 26, 2012 at 2:17 PM

“no many of the proprietor” should be “no money if the proprietor”

crosspatch on April 26, 2012 at 2:18 PM

angryed on April 26, 2012 at 2:17 PM

than why did you use “talking points”, you clearly said it several times. and since you now claim only one talking point show proof. give me a link showing that is a hannity/limbaugh talking point and also a link that anyone on this board you accused has “parroted” that talking point.

chasdal on April 26, 2012 at 2:19 PM

you want the gov’t to “fix” this so that these corps pay taxes they dont currently pay. you been whining about it on this board for 2 pages now.

chasdal on April 26, 2012 at 2:16 PM

They’re not corps for crying out loud. They’re individuals who filed a form to become a corp. Read what the proposal is…this would only apply to s-corps with fewer than 3 shareholders, ie the independent consultant and/or the independent consultant who files an s-corp with his wife for even better tax dodging opportunities.

angryed on April 26, 2012 at 2:19 PM

I have actually owned my own business before and actually had to obtain “income insurance” in order to get a loan. The reason is .. I get sick for a week or two, I don’t work. I don’t work, I don’t get paid. I don’t get paid, loan payment might be at risk. Bank wants to make sure I get income so they get income.

Unlike employees, a self-employed sole proprietor doesn’t get “sick leave” and the business makes no many of the proprietor is ill or at the very least income drops as work volume drops. I also had an employee. THAT was a major pain in the hips.

Your pontification via rectal extraction is obvious. Please try to stick to subjects on which you have some real experience.

crosspatch on April 26, 2012 at 2:17 PM

I own several “businesses” as well. And I put in quote because they’re “businesses” in name only. I am the sole owner of all of them. And I have never had to provide income insurance for getting a loan.

The reason you may have had to show it, most likely, is because you have no assets. Someone with substantial liquid assets doesn’t need to show insurance. You’re a “business owner” who doens’t have t quarters to rub together. And laughably you’re worried about what happens to people making $250K+.

angryed on April 26, 2012 at 2:22 PM

They’re not corps for crying out loud. They’re individuals who filed a form to become a corp. angryed on April 26, 2012 at 2:19 PM

wow, you are setting new lows for yourself, you contradict your 1st sentence w/ your 2nd sentence. legally they are a corporation. if congress feels they shouldnt be they can change the law, until they you can just suck it!!

chasdal on April 26, 2012 at 2:22 PM

As an S-Corp you pay salaries. If you are the only employee of an S-Corp and the S-Corp earns $300k and you pay yourself $300k then you pay the exact same taxes as if you were a W2 employee. Because you are a W2 employee at your S-Corp. But your taxes will actually feel somewhat higher because your company will also be paying the other half of your FICA taxes, where as if you were working for someone else, those taxes are taken care of by the tax fairy.

strictnein on April 26, 2012 at 2:16 PM

You missed the key part. As an s-corp you can get away with paying a salary of only $100K. The other $200K is Medicare Tax exempt. That’s the whole point of an s-corp. You make $300K but you only pay Medicare tax on a subset of that $300K which is the “reasonable” salary portion.

You have absolutely no idea what you’re talking about, as usual for a Sean/Rush listener.

angryed on April 26, 2012 at 2:24 PM

Spouse usually covers health care. Which is primarily the reason people do it. Employers are willing to pay a higher wage without the need to provide ultra expensive benefits. In exchange, you’ll take the higher wage not needing benefits since a spouse’s employer covers the entire family. It’s a nice little loophole and it’s a win-win for everyone involved.

angryed on April 26, 2012 at 2:05 PM

Every single software consultant I know has had a high deductible insurance plan paid for in part by an HSA that they fund at ~$5k a year. Because they’ve been the sole earner for their families.

They left jobs earning ~$40-$50 an hour (roughly $80-$100k a year), and now make ~$100-$125 an hour. The tough part, as always, is making sure that there aren’t too many non-work days. When they do have small gaps of free time, they typically work on software products that they sell online and earn some money from that as well.

strictnein on April 26, 2012 at 2:25 PM

wow, you are setting new lows for yourself, you contradict your 1st sentence w/ your 2nd sentence. legally they are a corporation. if congress feels they shouldnt be they can change the law, until they you can just suck it!!

chasdal on April 26, 2012 at 2:22 PM

You are giving Gunlock Bille Bob a run for his money as stupidest poster here.

Look up letter of the law vs. spirit of the law. Digest. Then come back and you might be able to add something to the conversation.

angryed on April 26, 2012 at 2:25 PM

angryed on April 26, 2012 at 2:25 PM

and ask a judge just what the “spirit of the law” is worth, its whats is written that counts.

chasdal on April 26, 2012 at 2:26 PM

Every single software consultant I know has had a high deductible insurance plan paid for in part by an HSA that they fund at ~$5k a year. Because they’ve been the sole earner for their families.

They left jobs earning ~$40-$50 an hour (roughly $80-$100k a year), and now make ~$100-$125 an hour. The tough part, as always, is making sure that there aren’t too many non-work days. When they do have small gaps of free time, they typically work on software products that they sell online and earn some money from that as well.

strictnein on April 26, 2012 at 2:25 PM

Exactly my point. Leave $80-100K job, make $200K and pay $5K for insurance. It’s a great tradeoff, double the income without health insurance.

And on top of it, pay Medicare Tax only on $80-100K which is a “reasonable” salary.

angryed on April 26, 2012 at 2:27 PM

PS: consultant doesn’t have to mean software consultant

angryed on April 26, 2012 at 2:27 PM

“Sean/Rush”
The new ‘KOOOOOCHHHHHHH!!!11!’

thirtyandseven on April 26, 2012 at 2:28 PM

Wow, sure would be cool if the GOP controlled the Senate and couldn’t do such maneuvers, eh Sharron Angle and Christine O’Donnell lovers?

TheLastBrainLeft on April 26, 2012 at 1:48 PM

Yeah, your idol Mike Castle totally wouldn’t have welcomed the same kind of legislation with open arms.

And I’ve got a nice seaside condo in Idaho to sell you.

Dunedainn on April 26, 2012 at 2:31 PM

LOL. So it’s ONLY $7500, but if that $7500 is taxed it’s the end of the Republic and a million small businesses will fail.

I love the logic.

angryed on April 26, 2012 at 1:46 PM

Why would you want to take money away from job creators and give it to non-job creators in such a weak job recovery? Your perverted quest for fairness?

How exactly do you Obama cultists think regular trillion dollar deficits is going to end? They’re going to have to massively cut spending and raise taxes on the poor and middle class.

Chuck Schick on April 26, 2012 at 2:31 PM

The reason you may have had to show it, most likely, is because you have no assets. Someone with substantial liquid assets doesn’t need to show insurance. You’re a “business owner” who doens’t have t quarters to rub together. And laughably you’re worried about what happens to people making $250K+.

angryed on April 26, 2012 at 2:22 PM

I had considerable assets but they were all tied up in the business. You can’t liquidate those assets without impacting the income of the business. And this was a REAL business, not some scam tax dodge. And MOST small businesses barely have two quarters to rub together. In fact, most eventually fail. For most successful business owners out there, the success came only after their first attempt(s) failed. Small businesses employ 85% of Americans but government doesn’t like them. Government likes having more people working for fewer companies … less paperwork for the government. So they pass regulations that put smaller businesses out of business and make larger ones get bigger. In fact, it is the Democrats that actually do that the most. The regulations they pass make it more difficult for small businesses to compete in markets giving an even larger share to the big players.

But the business model of the “corporation” is not evil. It is simply a way to create a business entity so that it has a mechanism for investment by other people (build capital) and so it can survive the death of any of its investors and continue. A sole proprietorship ends when the owner dies.

And I don’t listen to Rush but maybe for a few minutes once in a while if I happen to be in the car when he is on the air (not very often) and I avoid Hannity whenever possible. My favorite radio show would be John Batchelor in the evenings.

crosspatch on April 26, 2012 at 2:31 PM

Is Rush outraged by this today? Is he telling his flock how millions of “small businesses” will cease to exist after this?

angryed on April 26, 2012 at 2:31 PM

Why would you want to take money away from job creators and give it to non-job creators in such a weak job recovery? Your perverted quest for fairness?

How exactly do you Obama cultists think regular trillion dollar deficits is going to end? They’re going to have to massively cut spending and raise taxes on the poor and middle class.

Chuck Schick on April 26, 2012 at 2:31 PM

You are beyond insane. They’re not job creators. They are employees who get paid as an s-corp. Stop listening to Rush/Sean, your brain is rotting.

angryed on April 26, 2012 at 2:32 PM

Is Rush outraged by this today? Is he telling his flock how millions of “small businesses” will cease to exist after this?

angryed on April 26, 2012 at 2:31 PM

You are beclowning yourself.

crosspatch on April 26, 2012 at 2:33 PM

I just wanna thank y’all in advance for paying off those pesky student loans for me, m’kay? Dang nice of everyone, really.

/

Bob's Kid on April 26, 2012 at 2:33 PM

Yes it’s unfair if I make $300K as a W2 employee but you make $300K as an s-corp doing the same thing but I pay an extra $5800 in taxes.

angryed on April 26, 2012 at 1:51 PM

B.S. As someone else’s employee you take no risks with personal capital, assets or anything else. A small business owner takes his/her S corp salary and 9 times out of 10 (if they want to make a go of the business) puts the other “profit” right back into the business in order to stay in business and, hopefully, grow so they can hire some college grad. If there is a downturn, the “owner” has to invest more of his or her personal capital and risk losing it all. It’s not the same thing at all and if you want to risk your own money, by all means, have at it and reap the so-called reward of a tax code that allows you to reinvest in your own business.

totherightofthem on April 26, 2012 at 2:34 PM

Stop paying the student loans for federal employees and tax the student’s parents to offset the cost of keeping the interest rate low. Why screw small busiensses?

What a scam the student loan program is. Shovel easy money to unsuspecting/greedy students and their parents and then have the universities and politicians reap the windfall by raising tuition, paying liberal professors exorbitant salaries who then make a killing by overcharging for their mandatory books that are revised annually.

To foster this mentality, the liberals spread the belief that without a college education, you’re toast in this world. For a $100,000 student loan, I wouldn’t call waiting tables, changing linens in motels, phone marketing and the myriad of other low paying jobs college graduates have had to take a good investment because no employer wants to hire a liberal arts major who spent their years learning about the effect a gay or lesbian relationship had on Orangutans in Borneo and Sumatra. The cost/benefit ratio doesn’t add up for most majors.

iamsaved on April 26, 2012 at 2:35 PM

Oh, and PS: please let me know when I can stop making the payments and the taxpayers can start, thanks again!

/

Bob's Kid on April 26, 2012 at 2:35 PM

I had considerable assets but they were all tied up in the business. You can’t liquidate those assets without impacting the income of the business. And this was a REAL business, not some scam tax dodge. And MOST small businesses barely have two quarters to rub together

If you’re running a business and have no money out of it, you’re doing something wrong. Growing it for a year or two is one thing. But if after the business is established, you’re not taking anything out of it, you’re not doing it right.

Small businesses employ 85% of Americans but government doesn’t like them.

True. But we are talking about S-Corps with fewer than 3 shareholders here. These “corps” don’t employ anyone 99% of the time.

But the business model of the “corporation” is not evil.

crosspatch on April 26, 2012 at 2:31 PM

When did I ever say it was?

angryed on April 26, 2012 at 2:36 PM

B.S. As someone else’s employee you take no risks with personal capital, assets or anything else. A small business owner takes his/her S corp salary and 9 times out of 10 (if they want to make a go of the business) puts the other “profit” right back into the business in order to stay in business and, hopefully, grow so they can hire some college grad. If there is a downturn, the “owner” has to invest more of his or her personal capital and risk losing it all. It’s not the same thing at all and if you want to risk your own money, by all means, have at it and reap the so-called reward of a tax code that allows you to reinvest in your own business.

totherightofthem on April 26, 2012 at 2:34 PM

Stop with the Rush/Sean talking points already.

An s-corp with FEWER THAN 3 SHAREHOLDERS isn’t putting money back in the business. The vast, vast majority of these entities are independent consultants who risk virtually no money since there is no start up costs to being a consultant. Maybe a couple of buck on business cards and things like that. They’re not taking out loans for $1M.

angryed on April 26, 2012 at 2:38 PM

You are beyond insane. They’re not job creators. They are employees who get paid as an s-corp. Stop listening to Rush/Sean, your brain is rotting.

angryed on April 26, 2012 at 2:32 PM

A complete lie. I had a self-financed S-corp with 2 other partners. We created a dozen jobs and plenty of contracts work (for Americans) and sold the company off 5 years later. It still creates jobs.

And seriously, you sit on your ass all day. You can’t think of another insult besides your lame Sean/Rush one?

Chuck Schick on April 26, 2012 at 2:39 PM

anti liberty anti prosperity

The modern democrat.

tom daschle concerned on April 26, 2012 at 2:39 PM

When did I ever say it was?

angryed on April 26, 2012 at 2:36 PM

I’ve played with this troll enough for today. Next!

crosspatch on April 26, 2012 at 2:39 PM

The game plan of the Democrats/Progressives/Communists is to control everyone. The hardest person to control is the person who is in business for himself/herself.

So the game plan of the Democrats/Progressives/Communists is drive the small businesses out of business, and take over the big businesses (like GM, etc.)

Then, everyone will work for either the Government, or a Government-owned employer.

When someone controls your paycheck, they have incredible power over you. They can make your life hell in an instant if they cut off your income stream and you are in debt.

And they are trying to put every college student into debt.

It’s all about power and control. And OF COURSE the Dems want to bring independent business owners to their knees.

ITguy on April 26, 2012 at 2:42 PM

oh!!! just that “class” well, okay than.

chasdal on April 26, 2012 at 2:06 PM

I didn’t use the word “class”, it was you. That’s why I quoted it, because it’s the word that you introduced to the conversation, not me. By quoting it back at me you imply that I’m the one that used the word, which is incorrect.

FloatingRock on April 26, 2012 at 2:42 PM

The Democratic party is the party of slavery.

The Republican party is the party of freedom.

ITguy on April 26, 2012 at 2:44 PM

A complete lie. I had a self-financed S-corp with 2 other partners. We created a dozen jobs and plenty of contracts work (for Americans) and sold the company off 5 years later. It still creates jobs.

And seriously, you sit on your ass all day. You can’t think of another insult besides your lame Sean/Rush one?

Chuck Schick on April 26, 2012 at 2:39 PM

Wait what? With 2 other partners? So that means you had 3 shareholders?

Guess what genius, this wouldn’t apply to you since…

Harkin said the legislation would require the Medicare payroll tax on income of more than $250,000 a year earned at S-corporations with fewer than three shareholders.

But you keep on bitching about how this will KILL JOB CREATORS!!!!!

angryed on April 26, 2012 at 2:45 PM

angryed on April 26, 2012 at 2:38 PM

I know small S corp business with fewer than 3 shareholders that employ more than 70 people. They do put the business profits back into the business, taking what some might consider small salaries in comparison to what the business nets in a year. So, don’t lecture me about Rush and Hannity, bucko. I don’t have the luxury of time on my hands to listen to them on a weekly basis, let alone a daily one. I’m talking from experience, not theory.

By the way, where’s your source for the data to support your assertion that most S corps are actually consultants to other businesses? I’d be interested to review those statistics.

totherightofthem on April 26, 2012 at 2:46 PM

The Democratic party is the party of slavery.

The Republican party is the party of freedomless slavery.

ITguy on April 26, 2012 at 2:44 PM

FIFY. We’ve got a lot of work to do, IMO.

thirtyandseven on April 26, 2012 at 2:47 PM

Once again, like with healthcare, everyone’s looking at who pays the bill (or who can we tax, or confiscate money from, to pay the bill), instead of asking WHY is it so expensive?

*sigh*

Violina23 on April 26, 2012 at 2:48 PM

You have to admit this is pretty funny:
 

Is it so hard for you to take the Rush/Sean glasses off for a second and analyze this on your own?
 
angryed on April 26, 2012 at 2:00 PM

 

Sean/Rush are rotting your brain beyond repair amigo.
 
angryed on April 26, 2012 at 2:12 PM

 

All you know is how to parrot Sean/Rush talking points.
 
angryed on April 26, 2012 at 2:12 PM

 

Sean/Rush has only 1 talking point: Republican good, Democrat bad and a corollary…everything Democrat does, bad; everything Republican does good
 
angryed on April 26, 2012 at 2:17 PM

 

You have absolutely no idea what you’re talking about, as usual for a Sean/Rush listener.
 
angryed on April 26, 2012 at 2:24 PM

 

Is Rush outraged by this today?
 
angryed on April 26, 2012 at 2:31 PM

 

Stop listening to Rush/Sean, your brain is rotting.
 
angryed on April 26, 2012 at 2:32 PM

 

Stop with the Rush/Sean talking points already.
 
angryed on April 26, 2012 at 2:38 PM

 
Yet:
 

They make over $250K and are paying off student loans?
 
angryed on April 26, 2012 at 1:57 PM

 
“Check this out, all right. I’m the president of the United States. We only finished paying off our student loans off about eight years ago.”
 
President Barack H. Obama, April 24, 2012
 
rogerb on April 26, 2012 at 2:08 PM

 
Fair enough.
 
angryed on April 26, 2012 at 2:15 PM

rogerb on April 26, 2012 at 2:48 PM

Harkin said the legislation would require the Medicare payroll tax on income of more than $250,000 a year earned at S-corporations with fewer than three shareholders.

I know math is hard in flyover country. But less than 3 means 1 or 2. In other words 1 man operations or 1 man and his wife operations, ie not companies with employees.

angryed on April 26, 2012 at 2:48 PM

Hey guys, don’t forget….Sean is on soon. Another 3 hours of mindless talking points to tell us all how wonderful bored housewives are, how evil Democrats are, how totally awesome Republicans are, how nobody should pay any taxes and how endless war is actually peaceful.

angryed on April 26, 2012 at 2:50 PM

We can’t have that now, can we? Personal responsibility for one’s own actions/decisions? Horrors. Oh, the humanity! /s (Do I really need the sarc tag?)

totherightofthem on April 26, 2012 at 1:46 PM

LOL! Nah, I worked it out!

dogsoldier on April 26, 2012 at 2:50 PM

rogerb on April 26, 2012 at 2:48 PM

Unlike you, I can recognize when someone else makes a valid point. For you if Sean/Rush says no, it must be no.

angryed on April 26, 2012 at 2:51 PM

I know math is hard in flyover country. But less than 3 means 1 or 2. In other words 1 man operations or 1 man and his wife operations, ie not companies with employees.

angryed on April 26, 2012 at 2:48 PM

SHAREHOLDERS you imbecile, not employees.

Chuck Schick on April 26, 2012 at 2:51 PM

I know math is hard in flyover country. But less than 3 means 1 or 2. In other words 1 man operations or 1 man and his wife operations, ie not companies with employees.

angryed on April 26, 2012 at 2:48 PM

Apparently English is hard for you. 1 or 2 shareholders does not preclude the hiring of employees. A business can have less than 3 shareholders and employ many people. Again, where are the sources for your stats that the “vast majority” of S corps are business consultants with little to no start-up costs or overhead?

totherightofthem on April 26, 2012 at 2:52 PM

And FWIW, math is extraordinarily easy here in flyover country.
 
You don’t spend more than you make, and you expect people to pay their bills.

rogerb on April 26, 2012 at 2:52 PM

SHAREHOLDERS you imbecile, not employees.

Chuck Schick on April 26, 2012 at 2:51 PM

Yes. Shareholders. As in an s-corp with 2 shareholders doesn’t employ anyone. Once a company gets big enough to need employees, the shareholders go LLC or regular corp.

Flyover country….wasteland of thinking.

angryed on April 26, 2012 at 2:53 PM

You don’t spend more than you make,

rogerb on April 26, 2012 at 2:52 PM

I agree 100%.
Why did George W. Bush and Ronald Reagan not follow this advice?

angryed on April 26, 2012 at 2:54 PM

…talking points to tell us all how wonderful bored housewives are, how evil Democrats are, how totally awesome Republicans are, how nobody should pay any taxes and how endless war is actually peaceful.

angryed on April 26, 2012 at 2:50 PM

This is coming from the guy who fought day-and-night for Santorum?

Oh, wait. You’ve probably denied that by now.

Troll King.

Oh…and Ed’s an admitted slumlord.

So he’s got that going for him.

budfox on April 26, 2012 at 2:57 PM

http://www.irs.gov/taxstats/bustaxstats/article/0,,id=96405,00.html

angryed on April 26, 2012 at 2:57 PM

The Republican party is the party of freedom.

ITguy on April 26, 2012 at 2:44 PM

No, it’s not. The Republican Party supports locking American citizens up indefinitely while denying them their Constitutional rights, (NDAA), which is the exact opposite of freedom. The Republican Party represents the most deceitful kind of tax, taxation through inflation. The Republican Party supports bailing out their corrupt cronies in the banking industry, which took the taxpayer money and the bad banks bought a bunch of good banks. They also support using the government to force people to purchase products from their cronies in the insurance and healthcare industries. Republicans supported trillions of unsustainable national debt over the years by repeatedly raising the debt ceiling to facilitate it. The debt and taxation and bailouts that both parties support are turning Americas children into the slaves to other, irresponsible peoples, debt.

The Democrat and Republican Parties finance their brands of authoritarian statism and all the spending that goes along with it through immoral generational theft. It is one of the greatest issues of our time.

FloatingRock on April 26, 2012 at 2:57 PM

If you look at the data, s-corps have very few employees and for those with 1 or 2 shareholders, virtually no employees.

angryed on April 26, 2012 at 2:58 PM

This is coming from the guy who fought day-and-night for Santorum?

Oh, wait. You’ve probably denied that by now.

Troll King.

Oh…and Ed’s an admitted slumlord.

So he’s got that going for him.

budfox on April 26, 2012 at 2:57 PM

Shoe me 2 posts where I fought for Santorum. As usual you people live in imaginary world. I was against Romney, I was not for Santorum. I know logic is hard for you people.

angryed on April 26, 2012 at 2:59 PM

Yes. Shareholders. As in an s-corp with 2 shareholders doesn’t employ anyone. Once a company gets big enough to need employees, the shareholders go LLC or regular corp.

Flyover country….wasteland of thinking.

angryed on April 26, 2012 at 2:53 PM

If we needed any evidence that you’re a freaking moron.

When I sold my S-Corp in 2005, we had 2 partners and 10 employees. We paid alot of contractors along the way. That’s called job creation, you ignoramus.

S-Corps are 100 shareholders or less. Claiming you can’t have employees with a company large enough to have 100 shareholders shows you haven’t the slightest clue about business.

Chuck Schick on April 26, 2012 at 3:01 PM

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