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S Corp Payroll Tax Hike Resurfaces

Last week, Senate Democrats released a paper highlighting a dozen tax increases they would like to use to offset spending cuts in the current budget negotiations. As Politico reported:

Tax expenditures topping the list include the deduction corporations take when they move operations overseas and the carried interest loophole, which allows private equity and some other investment advisers to pay the lower capital gains tax rate on some of their income.

Also on the list is our old nemesis, the S corporation payroll tax hike. Labeled the Edwards Loophole by Republicans and the Gingrich Loophole by Democrats, the issue is

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2019-02-01T20:19:39+00:00November 14, 2013|

S Corporations and Payroll Taxes, Again

The release of Newt Gingrich’s tax return has returned the issue of payroll taxes and S corporations to the public’s attention. This issue first came to prominence during the 2004 election cycle, when Vice Presidential nominee John Edwards was accused of using an S corporation to avoid paying Medicare taxes on some of his income as a lawyer.

Now it appears Newt Gingrich may be using a similar structure. USA Today has an excellent report on the issue. Here are a couple excerpts:

Gingrich’s tax return shows his S Corporation, Gingrich Holdings, accounted for the bulk of his $3,142,066 adjusted gross

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2019-02-01T20:21:28+00:00February 1, 2012|

Presidential Candidates and Their Tax Returns

So, we now have the tax returns for President Obama, Governor Romney, and Speaker Gingrich. Did anybody notice that the S corporation owner is the one with the highest effective tax rate?

Seriously, of the three, Newt Gingrich paid the highest effective tax (32 percent), followed by President Obama at 26 percent and then by Governor Romney at 14 percent. Given that the Wall Street Journal is reporting that S corporations pay no tax at all, that result might come as a surprise to their readers.

On the other hand, readers of the more authoritative S-Corp Washington Wire understand that of the

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2019-02-01T20:21:29+00:00January 30, 2012|