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by exolymph 3732 days ago
"By the way, if I make a million dollars today as a business owner I have to give away about 50% of my income to the government here in California."

This is if you make a million dollars in salary or in profit. If you reinvest that money into the business, you aren't taxed to nearly the same extent, while still retaining the value. If you have a million bucks floating around, you're also in a position to invest your money outside the business and take advantage of capital gains rates: https://www.irs.gov/taxtopics/tc409.html

Obvious disclaimer: I am not a lawyer.
1 comments
montbonnot 3732 days ago
Sure.. what if you're an LLC making apps (single owner). How do you re-invest your million dollars into your business? Your business consists on a laptop and yourself. That's all you need to make apps and to sale them on the app store... You would most likely be working from home. So you have to file a regular income tax since you'd be a sole proprietorship. The business money is your income money because you have to "withdraw" that million dollars from your LLC to your personal bank account. If you leave it in your business it would be taxed anyway. So at the end it becomes regular income tax and you fall into the seventh bracket (federal: %39) + state tax + self employed tax (%15). It's more than %50... Sucks you made a million dollars and you have to give away half. That's why I don't get it when democrats think that millionaires avoid taxes. There's no way around for most of the small business owners.
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Avshalom 3731 days ago
Well then you didn't make a million dollars, you made 500k. Gross is an admittingly galling fiction but is for day to day purposes pretty much that, a fiction.
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montbonnot 3731 days ago
Transform these %50 taxes (money you're giving away for free) into time. You're now working %50 of the time for free while you could spend more time with your family, kids, friends, learning things, etc. It's not a fiction, it's reality.
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Avshalom 3731 days ago
No you're working 100% of the time for less money than the gross wages number on your check.
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montbonnot 3731 days ago
Yep, reality sounds like an nightmare. Thanks for re-clarifying :)
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