My sister is a CPA who does income tax returns for high net worth individuals. She will tell you that tax policy is still slanted toward the wealthy. As one example, a few years ago it was reported that Bob Simpson (founder of XTO Energy/current owner of Texas Rangers) was paid a total yearly compensation package of $56 million. Of that $56 million, $55.5 million was deferred compensation in the form of company stock, for which he paid $0 in tax. In essense, he was allowed to put 99% of his income into a 401k, while the rest of us can only put 15% per year into a 401k. He will never pay taxes on that money until he sells the investments, likely when his great, great grandson goes on a cocaine binge sometime in the future.
Tax Policy
- Thread starter FtWorthCat
- Start date
That’s an interesting way to look at it - just from pure tax component - how much is he paying compared to someone that makes 65,000 a year? Probably more just based on his 500k income so he’s still paying more than 95% of the population.
Theres also another way to look at it. If he founded an XTO energy company how many people does that company employ? Let’s just say it’s 1,000. This guy is now responsible for 1,000 people paying taxes yearly, in addition to payroll taxes, social security, all the taxes a corporation owes etc etc. He is, through the formation of this company, responsible for millions of dollars paid a year through his company as well as millions of dollars his employees pay. Therefore he’s going to be responsible for the US government getting tens of millions of dollars if not more in the coming decades. Do you feel that the government is happy with that deal? If you were the government would you say to someone “if you start a company that employs thousands of US citizens and is responsible for generating millions of dollars a year in taxes we’ll give you a break on your own personal tax burden”?
My question for you would be: how much money do you want this man to give the US government for you to be happy? Do you want him to pay more because you think the US government needs more money or just to make you feel better about the fact that you have to pay what you think is an unfair amount to the government? Don’t you think instead of this stranger giving up more of his income to the government it would be better if you yourself had to pay less because this country literally started over an unfair tea tax and we’d all be better off paying less like intended by the founding fathers?
Theres also another way to look at it. If he founded an XTO energy company how many people does that company employ? Let’s just say it’s 1,000. This guy is now responsible for 1,000 people paying taxes yearly, in addition to payroll taxes, social security, all the taxes a corporation owes etc etc. He is, through the formation of this company, responsible for millions of dollars paid a year through his company as well as millions of dollars his employees pay. Therefore he’s going to be responsible for the US government getting tens of millions of dollars if not more in the coming decades. Do you feel that the government is happy with that deal? If you were the government would you say to someone “if you start a company that employs thousands of US citizens and is responsible for generating millions of dollars a year in taxes we’ll give you a break on your own personal tax burden”?
My question for you would be: how much money do you want this man to give the US government for you to be happy? Do you want him to pay more because you think the US government needs more money or just to make you feel better about the fact that you have to pay what you think is an unfair amount to the government? Don’t you think instead of this stranger giving up more of his income to the government it would be better if you yourself had to pay less because this country literally started over an unfair tea tax and we’d all be better off paying less like intended by the founding fathers?
His $56 million in compensation comes from the work done by his employees. He should be limited to 15% yearly deferred compensation like the rest of us. I'm not sure of the latest max tax bracket, but let's say it's 38%. So under an actual fair tax (not the fake fair tax you hear people pushing that doesn't include capital gains at all), where all income is taxed the same, he would pay 38% on $47.6 million, or about $18 million. If the $65,000 per year employees are taxed at 20%, that's $13,000. So by not taxing all of his income as income, you need an additional 1385 working stiffs to cover it.
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He probably needs the infrastructure of the United States a whole lot more than the 65K worker.
So no, he should not get a break on his personal taxes.
Just last year alone the Texas rangers player salaries were 233 million. You’ll be thrilled to know that those players give up 40% of their salary a year to the government. So just from owning the Texas Rangers this individual was responsible for generating 100 million dollars of tax revenue for the United States IN ONE YEAR, before including any of his other tax revenue he generated with his other company. So he conservatively responsible for what 11,600 people making 65000 a year paid just last year alone. That does not include the hundreds of millions of dollars more his grandchildren will pay in the future like you mentioned in the first post. It also doesn’t take account the fact that he supplies jobs to thousands of US citizens.
Yeah Ron... what would we ever do without those selfless owners of the Texas Rangers who merely bought the team from somebody else? They didn't invent baseball, the Rangers, or any of the concession items.
Just because you guys think owning a company means the guy that owns it is a loser that doesn’t deserve it and doesn’t take any risk and his secretary Wanda is actually who deserves all the credit doesn’t actually make it true. I own my own small business, so I actually respect other business owners.
Oh boy, that is a stretch. You are giving him credit for revenue generated by MLB players, just because he was rich enough to buy the team, in part because he hasn't paid his fair share of taxes. Why weren't the players allowed to defer their income in form of stock options? I guess that is another topic though.
I bet his company that he started pays more in property taxes on the land his company was built on than you will in 100 lifetimes. I bet if you did an analysis on this guy he’ll indirectly be responsible for billions in tax revenue even after he’s dead.
Who should get credit for this? It’s his name signing their checks right? You think the players don’t appreciate the owner?
Ron is right. Go start a business and then report back on how great taxes are.
Business owners: I took on all the risk so I shouldn't have to pay taxes!
The government: Correct, and if you lose money you don't have to pay taxes.
Business owners:
The government: Correct, and if you lose money you don't have to pay taxes.
Business owners:
That doesn’t excuse him from paying taxes on what he makes though. That’s the entire point. Being a business owner shouldn’t be a get out of jail free card in relations to paying taxes on what you are paid in compensation as an employee of that company. You are still an employee earning an income that should be taxed like everyone else’s.
Nice dude...what is your small business that you own?
Do you have any employees? How long you been doing it for?
Are you drunk? If you lost money who cares about taxes, you lost money, which is worse than paying taxes. You want people to pay taxes on negative income now?
26 employees - owned it for 8 years now. It’s 24/7 and I’m completely burned out but thankfully I’m taxed at the highest rate
Yes. Should we also discuss all the tax "incentives" his energy companies get, and the new stadium the tax payers funded?
So if you lose money you don't want to pay taxes. But if you make money you don't want to pay taxes either. Did I get that right?
I'm all for easing the burden on small businesses. I've worked for a couple where I took "deferred compensation" in the form of a late pay check, and I stayed out of respect for the owner. I always got paid, just a week late a few times.
What is the biggest tax burden you see as a small business owner? Just the corporate tax rate? I am not in favor of increasing the tax rate on small business, and don't really think it's cost effective on large corporations either. That depends on tax breaks and incentives, and how all that is factored in.
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Tax policy is most certainly not slanted in favor of the rich. Quite the opposite.
Where the rich gain an advantage is being able to hire professionals to navigate the neverending web of codes and regs that can change by the second.
Plus Those same professionals can also stand up to an audit whereas normal folk getting audited causes financial devastation in costs alone.
My fellow BBN brothers and sisters - I call on us to start a second revolution - today it begins!
When the revolutionaries saw the bloated British government wanted to tax tea - did they see their fellow neighbors who weren’t taxed on the coffee they drank and say - But you should tax my neighbor that drinks coffee too! No of course not! They were not battered wives that advocated for the obese government to eat more. No my friends, they had the courage to see what’s right! They realized the common enemy was the bloated government, not their fellow citizen that was simply trying their best like them!
Say it loud and say it proud folks:
“WE DO NOT WANT MORE TAXES FOR SOME, WE WANT LESS TAXES FOR ALL!”
The government spent 1.3 TRILLION dollars just on defense LAST YEAR. Does this sound like an entity that needs more money? No! If your neighbor has a lower interest rate on their mortgage do you fight for the bank to increase their interest rate?’ Of course not! You know the bank has more money than it knows what to do with - you fight for everyone to have a lower interest rate!!
“WE DO NOT WANT MORE TAXES FOR SOME, WE WANT LESS TAXES FOR ALL!”
Who’s with me?? WHOS WITH ME?!
When the revolutionaries saw the bloated British government wanted to tax tea - did they see their fellow neighbors who weren’t taxed on the coffee they drank and say - But you should tax my neighbor that drinks coffee too! No of course not! They were not battered wives that advocated for the obese government to eat more. No my friends, they had the courage to see what’s right! They realized the common enemy was the bloated government, not their fellow citizen that was simply trying their best like them!
Say it loud and say it proud folks:
“WE DO NOT WANT MORE TAXES FOR SOME, WE WANT LESS TAXES FOR ALL!”
The government spent 1.3 TRILLION dollars just on defense LAST YEAR. Does this sound like an entity that needs more money? No! If your neighbor has a lower interest rate on their mortgage do you fight for the bank to increase their interest rate?’ Of course not! You know the bank has more money than it knows what to do with - you fight for everyone to have a lower interest rate!!
“WE DO NOT WANT MORE TAXES FOR SOME, WE WANT LESS TAXES FOR ALL!”
Who’s with me?? WHOS WITH ME?!
Well I’m also a CPA and it doesn’t sound like this guys sister is relaying accurate information.
I don't think thats the point. I think the point was the endless sea of regs are far more burdensome on sall business than large business when the playing field should be equal.
If you look at the aggregate number of people working for the aggregate number of small businesses its nothing to sneeze at.
The amount of taxes from payroll to state to federal is all pretty huge. Not only do I pay taxes on what I make but I also have to pay taxes on what is left in the bank at the end of the year. So just for example (made up numbers) let’s say at the end of the year I have 100 k sitting in the bank account. I have to pay taxes on that, but I don’t pay as if it’s 100k of income - I actually pay it at my higher personal income tax rate that’s based on my salary, so I pay more than 40k in taxes on that. The issue though, is that I need 70k in the bank to cover operating expenses and payroll for the following month - so that 100k is never used as income even though it’s being taxed as income. So in my situation I’m typically taxed hundreds of thousands extra at the end of the year for no f*cking reason - and it’s put me in multiple situations where I had to make payment plans to cover taxes that I owed because I couldn’t afford to pay them at the end of the year because I was being taxed on business expenses as if it was free cash flow for me.
Why don’t you let us know what is inaccurate? Most in his post about the owner of the Rangers was easily verifiable.
But he hasn't actually been paid the deferred compensation. Thats kinda what the word "deferred" means.
Back in April 2018, the WSJ online published an article with data supplied from the Tax Policy Center had some very interesting findings on wage earners here in the US. The article stated the following:
· Those that earn > $3.2 million (Top 0.1% of income earners): represents 7.6% of the income earned, but pay 22.0% of the federal income taxes.
· Those that earn > $730,000 per year (Top 1% of income earners): represents 15.9% of the income earned, but pay 43.3% of the federal income taxes.
· Those that earn > $150,000 per year (Top 20% of income earners): represent 52.2% of the income earned, but pay 86.9% of the federal income taxes.
· Those that earn between $86,000-$150,000 per year: represents 20.7% of the income earned, but pay 13.2% of the federal income taxes.
· Those that earn between $48,000-$86,000 per year: represents 14.2% of the income earned, but pay 4.3% of the federal income taxes.
I doubt much has changed over the years.
· Those that earn > $3.2 million (Top 0.1% of income earners): represents 7.6% of the income earned, but pay 22.0% of the federal income taxes.
· Those that earn > $730,000 per year (Top 1% of income earners): represents 15.9% of the income earned, but pay 43.3% of the federal income taxes.
· Those that earn > $150,000 per year (Top 20% of income earners): represent 52.2% of the income earned, but pay 86.9% of the federal income taxes.
· Those that earn between $86,000-$150,000 per year: represents 20.7% of the income earned, but pay 13.2% of the federal income taxes.
· Those that earn between $48,000-$86,000 per year: represents 14.2% of the income earned, but pay 4.3% of the federal income taxes.
I doubt much has changed over the years.
It is equal. Every business has an opportunity to become huge and extremely profitable. For that matter, most businesses, if set up correctly, can use deferred compensation.
That’s the point. He is able to defer more compensation because of his wealth while middle class is limited to 15%. He shouldn’t be able to defer more than you or I.
Where is this 15% figure within 401ks coming from? A percentage limit doesnt exist in 401ks (unless you are in a individually designed plan where your administrators designed it to cap - not the gov).
In 2024, if you make around $150,000 - 15% is close to the cap (if you are under 50). If you are a semi-retiree making $30,000- you could defer 100%....
In 2024, if you make around $150,000 - 15% is close to the cap (if you are under 50). If you are a semi-retiree making $30,000- you could defer 100%....
Yeah, something about that description is not correct. Deferred compensation means he didn't actually receive it. He most definitely will pay ordinary income taxes on any of that deferred compensation that he receives in the future. Much like a 401k, the tax is deferred, but not eliminated. By the way, if that company goes belly up, he most likely would receive none of that deferred comp. If that CEO doesn't want/need $56M of income this year, deferring it down the road is absolutely a logical, legal and smart tax move. He will not avoid taxation, but merely delay it. I see nothing wrong with what the CEO did.
Now, does his position and performance warrant $56M in compensation? That's a whole 'nother issue here that's outside of tax considerations. Many on this board who complain about CEO compensation have no problem with 18-YO QB prospects making $1M from NIL or Taylor Swift making >$1B or any number of sports individuals making $50M or more every year, yet complain about a person who has risen to the relative top of his chosen profession as these others have done making similar money. Yet, the CEO is in charge of however many 100s of employees of his company, attempting to steer it into more profitability so employees not only keep their jobs and receive raises, but the company is able to hire more people. Again, I see nothing wrong with that CEO or any CEO making a ton of money. While pretty much every rank-and-file employee could be replaced pretty seamlessly, the same cannot be said of a top CEO.
Now, does his position and performance warrant $56M in compensation? That's a whole 'nother issue here that's outside of tax considerations. Many on this board who complain about CEO compensation have no problem with 18-YO QB prospects making $1M from NIL or Taylor Swift making >$1B or any number of sports individuals making $50M or more every year, yet complain about a person who has risen to the relative top of his chosen profession as these others have done making similar money. Yet, the CEO is in charge of however many 100s of employees of his company, attempting to steer it into more profitability so employees not only keep their jobs and receive raises, but the company is able to hire more people. Again, I see nothing wrong with that CEO or any CEO making a ton of money. While pretty much every rank-and-file employee could be replaced pretty seamlessly, the same cannot be said of a top CEO.
Our income tax is progressive and the top 1% are paying 46% of all income tax collected. The bottom half pay nothing in income tax. This 3 minute report aired today on CNBC.
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I don’t think you shouldn’t have to pay taxes. But I do think if you run your own business you find out how many different ways small businesses get to stimulate the economy. The benefits of trickle down have been exaggerated but they aren’t nothing.
The richest counties in the country surround Washington DC, with degenerate psychopaths gorging on a feast of your hard earned tax dollars, people are on a Kentucky message arguing more money needs to be sent to DC.
You guys are lunatics.
You guys are lunatics.
Not at all. It's much easier for large companies to tamp down rising competition because of the advantages i mentioned in my post.