Novak calls Sub S FIT Code a loophole Edwards used to avoid tax.

[papau]

Sub S is a way to avoid "double taxation" by getting folks to pay your corporation, but then treating the income in the corporation as directly taxed to you as an individual. The result is that the wage you pay yourself has payroll tax, but reciepts earned by the corporation are just that and carry no payroll tax implications.

On Audit one can not hide income from the payroll tax as the gov requires Sub S corporations such as John R. Edwards, P.A.(formed in 1995), to pay its sole employee a "reasonable" salary. If paying a $1.1 million salary out of $11.1 million net income does not pass audit, Edwards will be hit with an additional bill.

So Novak is claiming that Edwards is hypocrit for using a sub S structure - a structure that millions of small businesses use - say that it is one of the Edwards mentioned "rich play dirty tricks on the other America" games.

But we are talking about 96 and 97 tax returns in the Novak article.

BUT IN CLASIC GOP LIE AND SPIN, NOVAK SAYS "Whether his tax avoidance was perfectly legal, however, remains unknown in the absence of an IRS audit."

[jmoss]

1. no thanks...next....

:nopity: :eyes:

[tryanhas]

2. Of course it was...

..."LEGAL," and since it was legal, who cares?

He didn't screw any american workers or send their jobs overseas by making himself a couple of extra hundred grand, not that it did much to inflate his already hefty bank account.

Novak is trying his best to find SOMETHING to talk about in respect to Edwards, and if this is the best the GOP can do, and it is, I'm not worried about it at all...

[displacedtexan]

3. My best friend owns a dancewear shop. Same tax structure.

She sells pointe, character, and tap shoes; leotards and tights; hair ribbons; and dance memorabilia items under the same Sub S corporation structure as Edwards.

Tax hypocrite / criminal, indeed!

[ramapo]

4. This is crap

Drawing a $1 Million+ salary is perfectly reasonable. Edwards maxed out on all the payroll taxes (except the Medicare which has no limit) early in the year.

As an S-Corp, the profits flowed to Edwards who then had to pay regular income taxes. So he paid taxes at 39+% (the same rate he paid as an employee).

So what is this about? That Edwards should've drawn a salary of $8 Million. That is ridiculous.

An S-Corp is not a mechanism to avoid taxes.