I agree, but what's your point? If you're getting ~90k in wages, the rest of your income isn't subject to FICA anyways.
(That may soon change, with talks of lifting the caps on payroll taxes, and that's a change I'll be far more ambivalent about).
(That may soon change, with talks of lifting the caps on payroll taxes, and that's a change I'll be far more ambivalent about).
My main issue was this: "You opt for chaos when you decide to cheat." Aggressive tax planning within the bounds of the law is not cheating, and I think it's unfair to characterize it that way.
The wage/distro setup is an advantage unique to S-Corp owners, and I understand why some want to see it eliminated. But to use it today is not cheating.
A tax planning strategy that relies on never getting audited, and that fails spectacularly when you do get audited, I think can reasonably called "cheating". I get that reasonable people can disagree on this, and I'm fine with reasonably disagreeing with you.
Regardless, surely it's possible to have situations where distributions are legitimately greater than zero. If I'm an absentee owner who pays a manager to operate my business, my distributions shouldn't be treated as wages.
I see it as a continuum -- on one end, you have cheaters who are paying themselves $10k annually and taking the rest as distributions. On the other end, you have absentee owners who should legitimately be able to claim distributions. In the middle there are many shades of gray.