<![CDATA[Paying taxes is for the little people who earn wages - Valleywag Comments]]> <![CDATA[Paying taxes is for the little people who earn wages - Valleywag Comments]]> <![CDATA[Paying taxes is for the little people who earn wages]]> 50 word version of post + comments: Brin/Page pay only 15 percent taxes on their earnings, pay zero into Medicare and cheat social security out of the amount someone who earns $97,500 would pay.

Nicholas Carlson

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @raincoaster: Oh I see what you mean, cause when earning a "Wage" you punch a clock. While when a worker is being paid a "Salary" the clock is instead punching them. I see what you are getting at, but the days of a "Salary" worker as in "Contract" worker are long gone. You still work for the man... :||

ennTOXX

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @sample032: Thank you! And for you, here's a tootsie roll. Yummy... :||

ennTOXX

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> Salary and wage are completely different, though, and subject to different laws.

raincoaster

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @smkr4:

I mean -- on a basic level, how can someone take a $1/year salary? Wouldn't that be violating minimum wage laws?

I'm not an employment lawyer, but I'm pretty sure that Steve Jobs and others mentioned in this thread are exempt employees, meaning they are not bound to certain laws (minimum wage, 40-hour workweeks, overtime, etc.).

I'm pretty sure that the exempt status can only be used for a certain level of employee (related to their importance) and that employee must accept being exempt. That is, you can't be a restaurant owner and tell your newly hired potwasher that he's exempt and will be paid $3/hr. and must work two 8-hr shifts back-to-back.

I believe some companies have gotten into hot water for declaring employees as exempt (particularly individual contributors, i.e., line employees) when the status is basically reserved for upper-level management.

I might have worked for one of those companies since for a time, I was receiving surveys asking about how much overtime I worked when I was with the company in question. (Everyone worked a lot of hours.)

BartKela

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> Made a mistake in my previous comment. They would pay the 5% cap gain on only the first $31850 of their stock sales. The rest of them (pretty much all of them because 32k is a rounding error for them) would be taxed at the 15% rate.

So they pay 15%. Still a helluva lot better than paying 35%.

Dave Malhotra

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> The Social Security tax is capped at the first $97500 of wages. So if Larry/Sergey/Jobs paid themselves multi-million dollar salaries they wouldn't be paying much into the system anyways relative to what they would make.

Medicare on the other hand is paid on all wages but its rate of taxation is only 1.45%. So you could argue they were dodging that tax.

But I have to agree, stock as compensation is definitely favorable compared to salary. If they had large salaries (>350k) their tax rate would be 35%. Instead they pay the lower rate for long-term capital gains. What makes it even more of a dodge is that the capital gains rate goes DOWN if you are not in one of the top four income brackets. Since they only pay themselves $1 they are considered low-income and qualify for the 5% rate instead of 15% (note this used to be 10% and 20% until Bush cut the rate by 5% in '03).

So bottom line, they are probably only paying 5%. ****5%**** people!

Unbelievable....

Dave Malhotra

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> CEOs and executives are already doing a huge favor for the world--by creating amazing things like the iPhone, Google search, Amazon, etc. If Steve Jobs, Larry Page, Jeff Bezos, etc. have a pile of money, I say that's great--they have earned it.

"Soaking the rich" means punishing the most productive and most successful.

Doesn't justice demand exactly the opposite? I say we thank the rich for everything they've made possible--from computers to live saving drugs--and waive their tax bills entirely.

routecoder

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @Matthew O'Ryan: You must be thinking of the Google Larry. I'm talking about the OG Valley Larry:

[valleywag.com]

OaklandTechie

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> The notion of taking a nominal salary is nothing new. Merriam-Webster dates the phrase "dollar-a-year man" to 1918. I suspect it's a lot older than that. It's more about PR than anything else.

achates

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> I'm not a CPA, but I doubt highly this is a tax dodge. The IRS has complex rules for "constructive income" that are meant to catch such "under-contributions." I believe very often in the tax code there are standards for what constitutes "adequate compensation" and they're regularly enforced vis a vis income tax.

I mean -- on a basic level, how can someone take a $1/year salary? Wouldn't that be violating minimum wage laws?

I'm not saying you guys are wrong and I'm right, but I don't see how it can just be categorically called a tax dodge without any expert opinion weighing in.

Also, I believe this pre-dates Jobs. I recall, for example, Erskine Bowles used to take a $1 salary when he worked in the Clinton White House.

smkr4

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> Who cares, it is not like those younger to middling people are ever going to get a dime from those various "retirement" taxes anyway. The older folks are taking far more money out of the system on average than they ever put in, and younger folks are paying a much higher percentage of their income into the system than the boomers and older did and they'll get nothing back out. The notion that such a system can be sustained is serious wankery, most people hoping to keep the system going just long enough so that they can get some cash and screw someone else.

If someone chooses not to play that losing game it is not "unfair", it is smart.

Vulture

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @OaklandTechie: I must have missed Larry's property tax dodge, do you have a link?

Matthew O'Ryan

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> The gimmick $1 salary has always been bothersome because it is so completely disingenuous.

Matthew O'Ryan

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @sample032: Well, that's the "honor system" of the whole thing, isn't it? You pay for people now, and your kid's generation will pay for you when you get old. Everyone is supposed to chip in, regardless of if you are wealthy enough to need it or not.

Of course, we all know we aren't going to get shit when we retire (damn boomers sucking it all up), and the smart people are maxing 401ks and IRAs.

OaklandTechie

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @OaklandTechie: That doesn't bug me so much; executives aren't very likely to benefit from those programs, themselves, so I don't mind that they're not paying for them.

What bugs me is that I'm paying for those programs.

sample032

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @sample032: Yeah, but FICA only comes out of regular paychecks. That's Owen's point. They will certainly get state and federal tax on the profit from stock sales (even restricted), but FICA/Social Security does not come out.

Now watch -- in addition to $1 salaries, execs will be following Larry's "my house isn't worth that much!" game to pay less property tax.

OaklandTechie

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> When underlings exercise options (and sell), the profits show up on their W-2s. I'd expect the $1 CEOs to see the same when they exercise.

Not sure about restricted stock sales, though.

sample032

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> Yeah, but they have to pay FICA on their bonuses.

OaklandTechie

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> @tawni Don't forget the boomers clingy, needy offspring. I'm sure they'll do alright too. We're the pathetic ham in that demographic sandwich.

SnarkTard

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> Steve Jobs started this whole $1 mess when he went back to be iCEO. He's laughing the hardest at these idiots.

Alaska Miller

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> Retirement? ha! not likely. As a GenXer I'll be working until I die. I have already accepted that retirement was for the babyboomers.

tawni

]]> <![CDATA[Paying taxes is for the little people who earn wages]]> When we what?

matto

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