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At least today the corporate tax rate is 21%. Individual tax rates in California are as high as like 52%. In almost every scenario you'll see a higher rate on t
by arcticbull 2y ago
At least today the corporate tax rate is 21%. Individual tax rates in California are as high as like 52%. In almost every scenario you'll see a higher rate on the distributions and buybacks than you would carrying it forward to the following year.
I guess you could make a case for double-taxation but... why?
- throwaway2037 2y ago> Individual tax rates in California are as high as like 52%. Is that a marginal tax rate (not very useful for comparison) or an effective tax rate? Also, can you explain why income level is required to achieve 52% "individual tax rate"?
- arcticbull 2y agoYes, the top marginal rate is 37% federal + 13.3% state + 0.9% surtax -- and note the state tax is generally double-taxed at this income level thanks to the SLPT cap. Can it also be an effective rate, yes, pretty close anyways.
- throwaway2037 2y agoAt what personal income level does this top marginal rate apply? 250K? 500K? 1M?
- s1artibartfast 2y agoIncome from a corporate entity is taxed twice by the time it gets to an individual. If I own a corporation and live in California, first I pay 21% on the profits and then 52% on what is left before it gets to my bank account. At these rates, This means the government takes 72 cents out of every dollar of profit.