I have a small LLC and we file our taxes as a partnership. We have 2 partners who work in the business and 2 that don’t.
Let’s say we have a good year and make $500k profit. We put $100k in savings to hire more people, increase inventory by $50k we give the rest as distributions to the partners. We still get taxed on the entire $500k because savings and inventory increase count as income. We also pay at the normal income tax brackets so as much as 40%.
Is there a reason to not do this with large corporations? No corporate tax but all shareholders pay income tax on the profit of the business.
Wouldn’t it be simpler and generate more tax revenue?
Does the LLC’s gross income get taxed or just the profit?
Because your LLC is a person…
And we’d all prefer it not to be.
But business owners with better accountants than you spent a lot of money for the current arrangement.
Citizens United was about corporations getting rights of people, not them paying taxes as people. I’m suggesting they should because individual tax rate is higher than corporate.
