(10-02-2020, 07:35 AM)mikesez Wrote:

(10-02-2020, 07:23 AM)The Real Marty Wrote: You have an astounding number or errors in this post, and as a truly lazy person, I hesitate to take up the effort of correcting them all, but here are just a few of them.     

First, you are in error about the S-corporation.   An S-corporation does not pay taxes, it is a pass-through.  All income of the S-Corporation is taxed to the owner of the S-corporation in his or her personal income tax return, whether it is distributed or not.  An S-corporation simply avoids the double taxation of a C-corporation.  

So it has to be a C-corporation for this to work.  So what happens in the case you set up?  The C-corporation takes in the consulting fees, and uses that money to buy back the stock of the owner.  Does this actually reduce the tax liability?  First, the corporation has to pay income tax on the consulting fee.  Then the owner has to pay capital gains tax on the stock buyback.  You've double taxed yourself.  25% marginal tax rate on the C-corporation, plus 20% capital gains tax on the stock buyback = 45% tax.  Ouch!  

And I'm going to stop there, because really I expect that even if I correct all the errors in that post, you will only try it again, and it's too much work for me to keep this up.  Just stop.  It is not possible for a rich person to avoid paying taxes.  As proof, I cite the fact that the top 1%, in spite of all their resources, and all the experts they can hire, still pay 40% of the personal income taxes in this country.  

Rich people cannot get out of paying taxes.  That is a myth.  (Unless, of course, like Trump, they shrink their net worth by losing money, thereby incurring deductible losses.)

So tell me, o wise one, how mitt romney's rate got to be 15%