Buffett: Tax the Rich

[Segnosaur]

But if you make your living as a cop or fireman or teacher or construction worker, and make most or all of your income from payroll, you'll likely be paying far more than 15%.

But if you put in a 40 hour week as a teacher/construction worker/etc, you are (in most cases) guaranteed to take home a paycheck. Nothing can take that away from you. Even if they fire you tomorrow, the time you've spent on the job will guarantee you get paid. Legally, you can't be denied compensation. (Ok, your company can go bankrupt, but that's still an extreme case.)

On the other hand, if you spend your time starting or expanding a business (either directly, or through the stock market) with the plan of getting rich off capital gains, you might find that at the end of the year, after all your work, you end up with nothing if the company goes bankrupt. Nada. Zip. Ziltch.

Because there is the risk of not receiving compensation, many people will require additional incentive to take that risk. That's why many countries tax capital gains at lower rate... it acknowledges both the risk, and it helps expand the economy.

 

[rwguinn]

OK, so should we decide tax brackets on the risk and/or value of people's jobs? I think there are many cops and firemen and public school teachers who pay more than 15% income tax, who literally risk their lives at their job, and also are providing crucially valuable services to the country.

You are confusing "Jobs" with "investment"

 

[Chris L]

It must be convenient to totally ignore a person's explanation for why they are not doing X, and then criticize them for not doing X.

Since Buffet seems to be criticizing others for not paying more (without knowing what THEY are doing) yeah it is. You either believe you are not paying enough or you don't. If you do, write the damn check. If you don't, do not pretend otherwise.

 

[Skeptic Ginger]

Ummm... just out of curiosity, do you have any proof that "many millionaires pay 15% tax"? Is this a common thing, or are you talking about special cases? Is this a "one time occurrence", or do they regularly pay such small amounts?

For one, high income earners only pay FICA tax on the first $106,800 of their income. Second, what Buffet noted was that a lot of his income was capital gains and dividends which are taxed at a fixed rate that is lower than the highest income bracket tax. Long term capital gains and 'qualified' dividends taxes are capped at 15% and the first $33,000 to $45,000 is exempt altogether.


Qualified dividends

Qualified dividends are the ordinary dividends subject to the same 0% or 15% maximum tax rate that applies to net capital gain. They should be shown in box 1b of the Form 1099-DIV you receive.
Qualified dividends are subject to the 15% rate if the regular tax rate that would apply is 25% or higher. If the regular tax rate that would apply is lower than 25%, qualified dividends are subject to the 0% rate.
To qualify for the 0% or 15% maximum rate, all of the following requirements must be met.
The dividends must have been paid by a U.S. corporation or a qualified foreign corporation. (See Qualified foreign corporation later.)
The dividends are not of the type listed later under Dividends that are not qualified dividends .
You meet the holding period (discussed next).

 

[Skeptic Ginger]

Since Buffet seems to be criticizing others for not paying more (without knowing what THEY are doing) yeah it is. You either believe you are not paying enough or you don't. If you do, write the damn check. If you don't, do not pretend otherwise.

So the rich should have the option of voluntarily paying their fair share while the rest of us have no such voluntary option?

 

[ThunderChunky]

Since Buffet seems to be criticizing others for not paying more (without knowing what THEY are doing) yeah it is. You either believe you are not paying enough or you don't. If you do, write the damn check. If you don't, do not pretend otherwise.

Or maybe he thinks it's best for the country if the super rich (including himself) are taxed more? I don't see him advocating that the super rich volunteer to give their money to the gov. He advocates that they are taxed more. See the difference? One of those two is about policy.

Additionally, he also advocates that the super rich give their money to charity, and he does so himself.

You are making a very stupid argument. Tax policy has nothing to do with him volunteering his personal wealth to the government.

 

[Chris L]

So the rich should have the option of voluntarily paying their fair share while the rest of us have no such voluntary option?

I'm suggesting that if Buffet really feels he is not paying enough, he can, without changing the law, remedy that situation right this very minute. He doesn't need an act of congress to do it. If he isn't doing that, he does not REALLY believe it.

 

[Molinaro]

I'm suggesting that if Buffet really feels he is not paying enough, he can, without changing the law, remedy that situation right this very minute. He doesn't need an act of congress to do it. If he isn't doing that, he does not REALLY believe it.

That is a very nonsensical argument. I can't even seriously believe that you believe what you just said.

The point of Warren Buffets comment is not that he wants to change how much he alone pays, as if that will solve anything. He rightly believes that all of the ultra rich should be paying more. That you would pretend that the issue he is raising can be solved by him taking action alone is just plain silly.

 

[Chris L]

Sorry, but he's posturing. He is claiming that not paying enough is wrong (wrong enough to use the power of the state to change it). Either he really believe that or he doesn't. Of he does, then he is honor bound to correct his part of the problem himself. THEN he can ask that the law force others to do it.

 

[Molinaro]

Sorry, but he's posturing. He is claiming that not paying enough is wrong (wrong enough to use the power of the state to change it). Either he really believe that or he doesn't. Of he does, then he is honor bound to correct his part of the problem himself. THEN he can ask that the law force others to do it.

Seems obvious to me that the only one posturing would be you by making such an absurd claim.

 

[Chris L]

So the "do as I say not as I do" argument works for you?

 

[Skeptic Ginger]

I'm suggesting that if Buffet really feels he is not paying enough, he can, without changing the law, remedy that situation right this very minute. He doesn't need an act of congress to do it. If he isn't doing that, he does not REALLY believe it.

So you've decided some indicator of truth and declare it to be a fact that it does indeed indicate truth? Have you tested that hypothesis? Supported it? Or just declared it to be so?

 

[jimtron]

Sorry, but he's posturing. He is claiming that not paying enough is wrong (wrong enough to use the power of the state to change it). Either he really believe that or he doesn't. Of he does, then he is honor bound to correct his part of the problem himself. THEN he can ask that the law force others to do it.

He's saying that ultra rich people like himself shouldn't be paying a lower tax rate than (in one of his examples) their secretaries. He's criticizing tax policy. He's not just pointing to others and saying "you're not paying enough," he's saying, "we're not paying enough."

I don't think he's posturing, I think he really believes that it's wrong when billionaires are paying half the tax rate as people making a couple hundred thousand a year. I think lots of people agree with him.

 

[xjx388]

I agree with Buffett. I'd like to take his logic one step further. I think we should all pay the same tax rate from rich down to poor. It's not fair that the poor pay 0%, the middle class pays 20-36% and the very rich pay only 15% or less. One tax rate for everyone. That's fair.

 

[Chris L]

He's saying that ultra rich people like himself shouldn't be paying a lower tax rate than (in one of his examples) their secretaries. He's criticizing tax policy. He's not just pointing to others and saying "you're not paying enough," he's saying, "we're not paying enough."

I don't think he's posturing, I think he really believes that it's wrong when billionaires are paying half the tax rate as people making a couple hundred thousand a year. I think lots of people agree with him.

If you believe what you are doing is wrong (paying a lower tax rate than your secretary), you don't need the force of law to stop doing it. If he believes it is wrong, why is he not at least correcting his own behavior?

 

[Chris L]

So you've decided some indicator of truth and declare it to be a fact that it does indeed indicate truth? Have you tested that hypothesis? Supported it? Or just declared it to be so?

Sorry, but I'm just using logic here. I say doing X is a bad thing and there should be a law against it. I work tirelessly to get the state to end X. Then it comes out that I am actually doing X every single day. In such a situation, I honestly don't believe it is a stretch for others to conclude that my commitment to ending X is not as strong as I have let on. Buffett does not seem so committed to ending the tax inequity that he is willing to pay what he says is his fair share.

 

[LTC8K6]

I agree with Buffett. I'd like to take his logic one step further. I think we should all pay the same tax rate from rich down to poor. It's not fair that the poor pay 0%, the middle class pays 20-36% and the very rich pay only 15% or less. One tax rate for everyone. That's fair.

That would need to be combined with the elimination of any sort of exemptions. One rate, and we all pay it, no exceptions.

A luxury tax/consumption/VAT of some sort for those filthy rich folks too!

If you make millions, you have to pay this tax.

Regular folks get a pass.



Next we will have Class Warfare 101 in the main auditorium.

 

[LTC8K6]

So, where do you see it heading?

No change until it busts all to hell and crashes hard and a reset is forced on us.

 

[LTC8K6]

It's worth pointing out that in the case of capital gains and dividends, usually the income has already been taxed once by the corporate income tax, which is not included here, meaning the average effective tax rate numbers can be somewhat misleading.

Did Buffet mention this?

 

[Skeptic Ginger]

Sorry, but I'm just using logic here. I say doing X is a bad thing and there should be a law against it. I work tirelessly to get the state to end X. Then it comes out that I am actually doing X every single day. In such a situation, I honestly don't believe it is a stretch for others to conclude that my commitment to ending X is not as strong as I have let on. Buffett does not seem so committed to ending the tax inequity that he is willing to pay what he says is his fair share.

It's your personal "logic", that does not support your assertion that 'x' means what you claim it does.