My Last Chance To Show Mitt Romney is a Liar Before He Loses The 2012 Presidential Election [175]

Yes, I agree, mine is an LLC, which we choose to tax as an S Corp so we can pay ourselves a "salary" like the rest of the employees rather than another method which requires us to file quarterly. It all works out the same, but is easier for us "weak willed" types.

I was going to include that as another item Romney failed to make clear about his example. Given his terminology, he implies the company was either a partnership, an LLC, or a S Corp, all taxed at individual rates. (I imagine me trying to explain that in this short hub, lol)

If they are an S Corp or an LLC being taxed as one, they pay themselves a salary and receive a W-@, just like any other employee. Any profits or losses left over are passed on the personal income taxes via a Scheduale K-1 as taxable income or loss and included in the personal AGI calculation. That example of his would be a rare small business indeed if either partner ended up with over $250,000 from a 4-person operation, maybe 1% do, so there goes his 35% out the window in any case.

If they are a partnership, and they are smart, they would "pay themselves a fair salary" so they could determine if they are making or losing money from operations; that is no different than normal wages made from any job. Then, what is left over still goes toward net profit or loss like before to be split up between the partners.

Now, let me ask whoever is reading this a question. What if, in the unlikely event father and son each made an AGI of $300,000 (using some standard factors I know and making a WAG - wild-assed guess - this company of 6 grosses $18 million a year, lol), that means each earns an extra $50K on which they will get taxes an extra 5% on if Obama has his way. How much is that? How about $2,500 or 0.8% of $300K, each.

Tell me y'all, as he swings into his southern accent, exactly how many of those 4 employees is father and son going to fire because of the this terrible tax load. Exactly how much of a disencentive is that when hiring an additional employee might bring in 20% more than the cost of the salary?

Sorry ladies, hopefully you will get from my long-winded reply, it is all simple artithmetic; just the categorization changes. The primary reason to go to an LLC or S-Corp is liability protection. In terms of the accounting, when the dust settles, it comes out just about the same. There are differences on how owners insurances and IRAs, etc are treated, but beyond that, the bottem line is basically the same; all are treated as if they were a partnership.

All non-corporate businesses get basically the same business deductions, although their might be a few special ones for S-Corps; since I am not one, and I don't do their taxes, I might be missing some. But, beyond that, the accounting is the same. You have Sales and you have Cost of Sales, leaving you Gross Sales.

From that you subtract all business overhead including all non-owner payroll). After that you have a modifief form of Net Profit.

In S-Corps and LLCs treated as S-Corps, you also subtract out wages paid to owners leaving Net Profits

In regular LLCs you subtract out something that sounds like a salary in liui of wages, but it really isn't, but still counts toward Net Profit. However, on your K-1, it is reported separately, basically like a draw and is taxable.

In a partnership, you are right, you can't pay yourself an "expensible salary", but, as I said before, you should keep your books as if you drew a salary to see how you are really doing. Nevertheless, your Net Profit for a Partnership does not reflect the owners pay and is reported on the appropriate IRS form,

So, what is the bottom line is your wages were $300,000 in each case?

If you are an S-Corp, you receive a W-2 reporting $300,000 in wages and a K-1 showing any profits and losses

If you are a LLC reporting as S-Corp? You receive a W-2 showing $300,000 of in-liui of wages and a K-1 reporting any other profit and losses.

If you are a regular LLC, you recieve a K-1 showing your $300,000 in-kind wages and any other profit and losses

If you are a Parnership, you get the appropriate IRS form showing your $300,000 in draws plus or minus any other profit of loses.

That, ladies is the bottom line, no real magic to it.

You are so right. The problem is it sounds so reasonable, like Romney's thing on taxes; to those who aren't accountants, it makes all of the logical sense in the world because it sounds intuitively right, problem is, it is wrong. Ditto, Medicare. They managed to move the debate away from what happens to the 55 year old and younger crowd by sticking Ryan's mom up there and pointing at her; very effective slight-of-hand indeed.

Fortunately, the liklyhood of them winning is small. If fact, it looks like the Dems might even pick up a seat or two in the Senate as opposed to losing the majority alltogether which seemed a reasonable possiblity a few months ago.

True to all of that, but the bottom line is still whatever the owner ends up with in his or her pocket at the end of the year, is, in essence, a wage and is taxed as such (except for a C corp).

And, in terms of analying company finacials, should be treated as such. Whether you are a sole proprietorship or an S corp partnership, your books should always reflect a fair "wage" that you are paid so that you can make appropriate business decisions and understand your true profit and loss picture. If, especially as a sole proprietorship or partnership, you don't do this and let your net profits include your "wages" for analysis anyway, things get very muddled and generally lead to bad decision making.

What would you call me if I said Hitler or Stalin was a good guy? Misleading or a liar? I personally would call myself a liar because I know for a fact that the evidence is overwhelming that these men, beyond a few anecdotal cases, were not, by any stretch of the imagination, "good" guys.

Likewise, Mitt Romney, a very educated businessman, knew exactly what he was saying when he uttered those words. He knew exactly what the impact would be on an uneducated audience. The words were chosen specifically to mislead, to make the listener believe something that is not true, and in my book, that makes those utterences a lie ... and that is my story and I am sticking to it :-).

Now, having said that about Romney, can I go back and find similar things from Obama? Of course I can, but, except for maybe one or two, none so blatant as this and a dozen or so others that the Romney/Ryan ticket have put out.

Most of Obama's have been closer to Gore's exageration of his importance in the development of the Internet; which Gore less than what he said but more but a lot more than what his opponents what you to believe.

One where Obama may be close to my definition of lying is his tax plan apparently; at least based on the last I heard from CNN. The one I remember fit within the budget because it was the budget, but I am guessing he made some changes that no longer add up.

Romney's on the other hand, is a mathematical impossibility.

Well, let's see. 14 hours after the attack, Obama was giving an interview with 60-minutes, aired later, where he was quite clear he thought this was a terrorist attack, I reported his words elsewhere. About 24-hours later I was watching him on TV in the Rose Garden referring to this as terrorism. Seven days later, I think it was a national secutity advisor or somebody testified on the record in Congress that it was a terrorist attack. I also watched Obama's UN speech and not once did he blame the terrorist attack on that video. Yes, he did reference in the broader context of hate speech across the world and how it is not acceptable anywhere by anybody.

Further, I have seen no report that Obama sent anybody, minion or otherwise, to declare anything. If you know of one, please post it.

... add to that emarrassing. Just think how much more silent the world would become; no more politicians talking, no more gossiping around the water cooler or over the backyard fence, husbands and wives staring at each other at the dinner table with nothing to say, oh wait, they do that already, lol.

Point taken Genna. This just occured to me, thinking about that, however. In criminal justice, one can still go to jail for saying certain misleading things, depending on the harm they cause.

Here is a stupidly extreme example I just concocted. A guy flicks is Bic (a woman would never do this of course) in a crowded theater and yells FIRE. True enough, his lighter is lit. There is a stampede out the door and people are hurt or killed.

No, there was no fire, in the normal since, the theater wan't "on" fire, in the theater, so he was lying in that regard. But he wasn't lying either because he did produce a speck of fire in the theater with his lighter, he was just being misleading because their actually was "fire" in the theater. ---- how do you assess this situation. (remember, I already called it stupid.)

I liken this stupid example to his speech on taxes, given his knowledge about taxes. If, on the other hand, he knew as much about finances as my partner and CEO (I am the CFO) does, then I would retract my statement in a heartbeat, and just figure he didn't know what he was talking about, lol. (for 12 years I have been trying to teach this lady the difference between a balance sheet and an income statement; I am not that bad a teacher ... really! Fortunately, she is really, really good at the part of her job that counts.)

I appreciate the comment SpeakUp. Where in SoCal do you live? I wandered, or rather my parents did, from downtown LA to Whittier to Fullerton to Hacienda Heights from the 1950s to the 1960s; a little before your time, judging from your picture. LA still had trees and clean air, relatively speaking, then.