I do think it’s funny how many people want to ignore me because they don’t like what I post, so they think I am confused!
my quote about top earners paying 12% net tax was a search for UK, not U.S.
And I don’t have any idea why someone seems to think that I believe that you can sell the same business annually.
No, I am not an accountant and nor have I run a business, but I have for most of my life paid tax at the highest rate and I invest in both publicly traded shares and small private equities, and I can see the tax advantages accruing to the owners.
It is a fact that most (successful) business owners will pay themselves a small salary, so they won’t hit the higher tax bands and the rest as a mixture of dividends and pension contributions (although a lot of that benefit has recently been destroyed).
Although, yes, you do pay corporate tax on profits and then tax again when you receive the dividend, it is still a lot less than the personal tax bands (about 5% if you are paying tax at the highest rate).
And, as for taking capital gains, you can sell a share in your business via private equity if you have a medium size successful business. Most small private equity companies will look at any business with a net worth of over 5 million, which means an EBITDA of under one million at a reason ratio. That isn’t a huge business by any means. So, yes, you can release bits of your business over time. It isn’t all or nothing.
If I am wrong, I am happy to be challenged with actual facts, but not dismissed with nebulous accusations of having no idea what I am talking about.
Do people seriously believe that owners of medium (with medium starting quite low) to large successful businesses pay a net tax rate of 45%? Why do you think a wealth tax is being mooted (although will never happen)?