|
Republicans said that while instances like Edwards' use of an S corporation to avoid paying payroll taxes deserve scrutiny, they think the Democratic strategy will backfire. "It would be mystifying if Democrats chose to make the price of doing business for America's small businesses more difficult with our economy as weak as it is," said Antonia Ferrier, spokeswoman for Sen. Orrin Hatch of Utah, top Republican on the Senate Finance Committee. Brian Reardon, executive director of the S Corporation Association, said the trade group already has the ability to pursue people who don't pay the taxes they owe. He said he believed the Democratic plan would be "less workable, less enforceable" than existing rules. S corporations do not pay corporate income taxes. The company's earnings flow through to their owners, who include them in the individual income taxes they pay. But those owners only have to pay Social Security and Medicare payroll taxes
-- which this year are 5.65 percent for workers and 13.3 percent for self-employed people
-- on the portion of those earnings that they declare to be their salaries. They owe no payroll taxes on the part of their compensation that they consider to come from their firm's profits. The Internal Revenue Service says S corporation owners must consider a reasonable portion of their earnings to be salaries, but there have been disputes over how to interpret that. A similar proposal by Senate Democrats went nowhere in 2010. This year Rep. Pete Stark, D-Calif., introduced a similar bill that has languished in the GOP-run House.
[Associated
Press;
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries
Community |
Perspectives
|
Law & Courts |
Leisure Time
|
Spiritual Life |
Health & Fitness |
Teen Scene
Calendar
|
Letters to the Editor