Should millionaires pay the same % of tax as middle income taxpayers?

[wayneL]

Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.

I love it when smartarses highlight their own ignorance.

 

[McLovin]

Those bastards! Who gave them the right to dictate which countries I'm allowed to set up a company in? I don't recall giving them such a privilege - do you recall yourself giving it to them?

I don't recall giving them the privlege to use my tax dollars to pay for your degree. Such is life.

 

[Julia]

Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.

I love it when smartarses highlight their own ignorance.

+1.

 

[Starcraftmazter]

Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.

Dividend imputation doesn't stop company profits from being taxed twice, it merely reduces said double tax relative to how high it would be without it.

If dividends weren't double-taxed, then all dividends paid would not even have to be reported for tax reasons. I don't see how this is not obvious to anyone with half a brain.

I don't recall giving them the privlege to use my tax dollars to pay for your degree. Such is life.

I don't recall anyone having paid for my degree. Last time I checked, I paid for all of it.

If we were both charged for the same thing, then I think someone stole your money or mine - or both of ours.

 

[bellenuit]

Dividend imputation doesn't stop company profits from being taxed twice, it merely reduces said double tax relative to how high it would be without it.

If dividends weren't double-taxed, then all dividends paid would not even have to be reported for tax reasons. I don't see how this is not obvious to anyone with half a brain.

Not quite. Dividend imputation recalculates the tax on company profits that are distributed to shareholders as if those profits went directly to the shareholder without the company paying any tax on them. In other words, it reimburses company tax paid on the pretax profit distributed as dividends, so that the pretax profit is effectively only taxed ONCE - at the recipient's (shareholder's) marginal tax rate.

One reason for reporting the dividends paid for tax reasons is that if one is on a marginal rate less than the company rate of 30%, then you are actually reimbursed the excess tax paid by the company over and above that which you would have paid.

But in any case, the net effect is that the pretax profits are only taxed ONCE and at YOUR marginal tax rate. People with a quarter of a brain would understand that that is not double taxation.

Dividend imputation doesn't stop company profits from being taxed twice, it merely reduces said double tax relative to how high it would be without it.

Think about what you have just said. it merely reduces said double tax relative to how high it would be without it. You have just conceded that dividend imputation reduces the double taxation to the amount it would have been if there was no double taxation. SO WHAT ARE YOU COMPLAINING ABOUT????

 

[Starcraftmazter]

Not quite. Dividend imputation recalculates the tax on company profits that are distributed to shareholders as if those profits went directly to the shareholder without the company paying any tax on them. In other words, it reimburses company tax paid on the pretax profit distributed as dividends, so that the pretax profit is effectively only taxed ONCE - at the recipient's (shareholder's) marginal tax rate.

Haha what, without the company paying any tax on them? But they did pay tax on them. I know how dividend imputation works, and I don't see how explaining it is a justification for it.

Pure and simple this is how it works:
1. Company pays tax on profit
2. The remaining of the profit is paid out as dividends
3. Those dividends are then taxed again

That's all there is to it - it's a double tax. How they want to calculate it, and what bull**** excuse they want to use is irrelevant to the fact that the money a company earned which goes to their shareholders is taxed twice before it is spent by said shareholders.

And that is completely immoral and unjustifiable. It's almost as bad as welfare.

One reason for reporting the dividends paid for tax reasons is that if one is on a marginal rate less than the company rate of 30%, then you are actually reimbursed the excess tax paid by the company over and above that which you would have paid.

That's just the cherry on the cake isn't it? Just another piece of evidence towards the fact that company tax is idiotic.

But in any case, the net effect is that the pretax profits are only taxed ONCE and at YOUR marginal tax rate. People with a quarter of a brain would understand that that is not double taxation.

It is, I just showed you how. And what does my marginal tax rate have to do with profit made by any company who's shares I hold? I fail to see the connection. It's government-legislated fraud.

 

[wayneL]

Some advice Grasshopper.

When in a hole, stop digging. You are looking more foolish with every word you type.

 

[Starcraftmazter]

Some advice Grasshopper.

When in a hole, stop digging. You are looking more foolish with every word you type.

Maybe you should try pointing out where I am wrong? Clearly I am correct - or have you never paid tax on dividends? That's ok, I haven't either - but I know how it works, and it is immoral.

How can it be justified that profits which were already taxed at the company level are taxed again at the individual level? If that is not the definition of double tax, then I really don't know what is.

 

[wayneL]

Maybe you should try pointing out where I am wrong?

Bellanuit has already done so.

Clearly I am correct

Clearly you have no idea.

or have you never paid tax on dividends?

LOL

That's ok, I haven't either-

Mate, I doubt you have even filed your first tax return.

but I know how it works, and it is immoral.

Again, clearly you have no idea.

How can it be justified that profits which were already taxed at the company level are taxed again at the individual level? If that is not the definition of double tax, then I really don't know what is.

Read bellanuit's post.

 

[Starcraftmazter]

Read bellanuit's post.

Let's be clear here; my claim is that company profits are taxed twice.

Let us use a simple example with one company making a profit of $1000, and one shareholder paying a marginal of 45%.

So....

1. Company makes a profit of $1,000 in Australia
2. It pays $300 in company tax - First instance of profit being taxed
3. Company decides to pay out the $700 it has left to it's sole shareholder.
4. Shareholder receives $700 dividend payment.
5. Shareholder pays $150 in tax on the payment - Second instance of profit being taxed


End result under current double-tax system:
Shareholder ends up with $550.

End result if company profit was not double-taxed:
Shareholder ends up with $700.


Thus, the same company profit is taxed twice - once at the company level, and again at the individual level. I even make the font bigger just in case you missed it.


All makes sense now buddy?

 

[wayneL]

Let's be clear here; my claim is that company profits are taxed twice.

Let us use a simple example with one company making a profit of $1000, and one shareholder paying a marginal of 45%.

So....

1. Company makes a profit of $1,000 in Australia
2. It pays $300 in company tax - First instance of profit being taxed
3. Company decides to pay out the $700 it has left to it's sole shareholder.
4. Shareholder receives $700 dividend payment.
5. Shareholder pays $150 in tax on the payment - Second instance of profit being taxed


End result under current double-tax system:
Shareholder ends up with $550.

End result if company profit was not double-taxed:
Shareholder ends up with $700.


Thus, the same company profit is taxed twice - once at the company level, and again at the individual level. I even make the font bigger just in case you missed it.


All makes sense now buddy?

We are not buddies.

Rework your example if the taxpayer's marginal rate is less than 30% and report back.

 

[Starcraftmazter]

Rework your example if the taxpayer's marginal rate is less than 30% and report back.

Why? how is that relevant? My tax marginal rate is not 30%.

 

[wayneL]

Why? how is that relevant? My tax marginal rate is not 30%.

Just do it Grasshopper, it will be good for your education.

 

[Starcraftmazter]

Just do it Grasshopper, it will be good for your education.

But why? It is a situation which does not apply to me personally, and I would presume to the vast majority of shareholders. To those people whom it does apply, I do not particularly care about.

Do you admit that company profits are taxed twice?

 

[wayneL]

But why? It is a situation which does not apply to me personally, and I would presume to the vast majority of shareholders. To those people whom it does apply, I do not particularly care about.

Do you admit that company profits are taxed twice?

Do you admit that:

1/ Your refusal to rework the example
2/ Your use of logical fallacy

is a tacit admission of defeat?

Let's try again.

Let's say you're marginal rate on your main income is 48% (OR WHATEVER)

Scenario one: You earn $1000 in dividends from share holdings.

Scenario two: You earn $1000 hawking yourself as a rent boy to guys at The Cross (and declare the income )

Can you tell me the total tax payable for each of these two scenarios?

Just a simple answer will suffice; no bobbing or weaving.

 

[tigerboi]

never mind the millionaires? what about the singles taking home $69,000 per year PAYING $2,000 more net tax than husband on same as me $69,000 plus wife bringing in $30,000 making a total of $99,000.

the single pays about $15,000 & the other 2 pay about $12,500- $13,000 ish. combined

looks like singles are carry the heaviest tax load,

suppose i will get taxed to buggery when i get a lump sum workers comp payout?

we need to get this crimminal labour party away from this countrys money as the debt they have put us in is about to get ugly & dont say we are rich & lucky...

first 2 things that need to be slashed,foreign aid & welfare.tb

 

[Starcraftmazter]

Do you admit that:

1/ Your refusal to rework the example
2/ Your use of logical fallacy

is a tacit admission of defeat?

No, why would it be? I have demonstrated how the money is taxed twice.

Let's try again.

Let's say you're marginal rate on your main income is 48% (OR WHATEVER)

Scenario one: You earn $1000 in dividends from share holdings.

Scenario two: You earn $1000 hawking yourself as a rent boy to guys at The Cross (and declare the income )

Can you tell me the total tax payable for each of these two scenarios?

Just a simple answer will suffice; no bobbing or weaving.

$480 for hawking and $257 for the shares?

This further proves my point you see; the money you "earned" from share holdings was already taxed. Why should it get taxed again? It doesn't make sense for you to pay any additional tax beyond what the company already paid in tax on it.

never mind the millionaires? what about the singles taking home $69,000 per year PAYING $2,000 more net tax than husband on same as me $69,000 plus wife bringing in $30,000 making a total of $99,000.

the single pays about $15,000 & the other 2 pay about $12,500- $13,000 ish.

looks like singles are carry the heaviest tax load,

suppose i will get taxed to buggery when i get a lump sum workers comp payout?

we need to get this crimminal labour party away from this countrys money as the debt they have put us in is about to get ugly & dont say we are rich & lucky...

first 2 things that need to be slashed,foreign aid & welfare.tb

Buddy, as a young, hard-working taxpayer I could not agree with you more.

As if child support isn't bad enough, apparently we now have to pay for everyone else's children.

This is basically communism.

 

[bellenuit]

Let's be clear here; my claim is that company profits are taxed twice.

Let us use a simple example with one company making a profit of $1000, and one shareholder paying a marginal of 45%.

So....

1. Company makes a profit of $1,000 in Australia
2. It pays $300 in company tax - First instance of profit being taxed
3. Company decides to pay out the $700 it has left to it's sole shareholder.
4. Shareholder receives $700 dividend payment.
5. Shareholder pays $150 in tax on the payment - Second instance of profit being taxed


End result under current double-tax system:
Shareholder ends up with $550.

End result if company profit was not double-taxed:
Shareholder ends up with $700.


Thus, the same company profit is taxed twice - once at the company level, and again at the individual level. I even make the font bigger just in case you missed it.


All makes sense now buddy?

Don't be such an idiot. You said the shareholder's marginal rate is 45%, so if he were to get a dividend of $700 and if he was double taxed, he would pay an additional $315 in tax. But he is only paying an additional $150. Why? Because the NET EFFECT of dividend imputation is that he ends up being taxed as if the company profits were taxed just once at his marginal tax rate of 45%. So, as per your figures, the company paid $300 tax and he paid just $150 tax, which is 45% of the company profits of $1000.

What you in your idiocy is now trying to say is that because the process goes through 2 iterations, company is taxed and shareholder is taxed, that it is double taxation. But the shareholder is reimbursed the company tax paid, so it is not double taxation, just single taxation at the shareholder's marginal rate, as your figures show.

If your issue is that you do not want to have to report dividends received because they are already taxed, then that is not the same as double taxation. The reporting is needed to ensure that the shareholders are taxed at their marginal rate, rather than the company's rate. Individuals are not companies, so they pay their taxes at their respective rates.

Reimbursing the company tax means you are only taxed ONCE, not DOUBLE TAXED.

 

[Starcraftmazter]

Because the NET EFFECT of dividend imputation is that he ends up being taxed as if the company profits were taxed just once at his marginal tax rate of 45%. So, as per your figures, the company paid $300 tax and he paid just $150 tax, which is 45% of the company profits of $1000.

Yes I understand this - but why? How is that fair or logical? I just don't get it. He did not make this money - the company did - and the company was already taxed for it.

Why should he then be taxed so that the total amount of tax is equal to his marginal rate? What is the justification for that?

If your issue is that you do not want to have to report dividends received because they are already taxed, then that is not the same as double taxation. The reporting is needed to ensure that the shareholders are taxed at their marginal rate, rather than the company's rate. Individuals are not companies, so they pay their taxes at their respective rates.

I agree - individuals are not companies. So why are individuals taxed for company profits? It is nonsensical. I don't see how it's not the same as double taxation. What do you call it?

 

[wayneL]

No, why would it be? I have demonstrated how the money is taxed twice.



$480 for hawking and $257 for the shares?

This further proves my point you see; the money you "earned" from share holdings was already taxed. Why should it get taxed again? It doesn't make sense for you to pay any additional tax beyond what the company already paid in tax on it.

Correction on my part.

$1000 Grossed up dividend.

$1000 Rent boy.

I'll answer for you, in both cases it is $480