Buffett: Tax the Rich

[Roboramma]

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.

Hypothetical:

I believe that society would be better off if some of its resources were put to collective use rather than individual use. I also believe that the government is good at determining what are important social problems and how to allocate funds to solve those problems. However, I further believe that I am better than government in this regard, when it comes to funds whose value is in the range of my own personal wealth. Nevertheless, I also believe that, for a variety of reasons, this is not true of people in general. Because of this, I think we as a society would be better off if taxes were increased, in spite of the decrease in efficiency that came about from my personal contribution. Because I feel that laws should be applied equally, I feel that this small loss of efficiency (my paying taxes to the government rather than giving it to charities that I feel spend it more wisely, for instance) is unavoidable.

Please show me the inconsistencies in the above.

 

[LTC8K6]

Is this true?

Tax foundation says top 5% earn 34.7% of the countries gross income.

Nation Master says US gross income is $9.78 trillion

34.7%*$9.8 trillion=$3.4 trillion.

That would more than wipe out the deficit, and pay off the debt in less than a decade.

I think $3.4T is about what we spend per year.

http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png

I knew I'd read the 5% somewhere.

http://hotair.com/archives/2011/04/18/wsj-shows-taxing-the-rich-wont-cover-the-bill/

 

[ThunderChunky]

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?

If you believe the tax policy is wrong you will advocate that the tax policy be changed. This is what Buffet is doing.

Buffet does not advocate that the law be changed to force all super rich to donate as much percent of their money to charity as himself (although I bet he wishes they would).

 

[Bob Blaylock]

This is really the “Patriotic Millionaires” thread all over again, except that this time, it's Buffet on his own.

 

[Emperor_Gestahl]

To tax the "mega rich" isn't income tax the incorrect way to do that? Truly wealthy people (Like Buffett) have most of their income in capital gains and such. Capital gains tax maxes out at 15%, which is why the top couple percent of wealth earners really don't pay a high tax rate at all.

The people at the top couple percent of taxable income are not the same people. Raising the income tax on the top earners is going to primarily affect people like athletes, musicians, actors, and probably lower-level execs from some of the more decadent mega-corps. Income tax is not the tax the uber-rich like Buffett would even care about one way or the other.

 

[Eddie Dane]

To tax the "mega rich" isn't income tax the incorrect way to do that? Truly wealthy people probably have most of their income in capital gains and whatnot. Capital gains tax maxes out at 15%, which is why the top couple percent of wealth earners really don't pay a high tax rate at all.

The people at the top couple percent of taxable income are not the same people. Raising the income tax on the top earners is going to primarily affect people like athletes, musicians, actors, and probably lower-level execs from some of the more decadent mega-corps. Income tax is not the tax the uber-rich like Buffet would even care about one way or the other.

I personally know a company director/owner in the Netherlands who lowered his own salary to minimum wage. He thought it was too highly taxed.

 

[Jaggy Bunnet]

I'm not saying that all rich people are paying less, I'm saying that there are many very wealthy people who are paying less (smaller percentage) than people making much, much, less than them.

Are there? According to the Tax Foundation report linked earlier, Table 1:

http://www.taxfoundation.org/news/show/250.html#table1

Top 1% pay 23.27% of income
2-5% pay 17.21%
6-10% pay 12.44%
11-25% pay 9.29%
26-50 pay 6.75%
51-100 pay 2.59%

Overall average rate 12.24%

Based on that information, as adjusted gross income goes up so does the percentage taken in taxes.

Do you really want the rich to pay the same percentage of gross income in taxes as others, because it seems like that would be a massive handount to the top 5% who currently pay above the average rate?

 

[jimtron]

I'm not saying that all rich people are paying less, I'm saying that there are many very wealthy people who are paying less (smaller percentage) than people making much, much, less than them.

Are there? According to the Tax Foundation report linked earlier, Table 1:

http://www.taxfoundation.org/news/show/250.html#table1

Top 1% pay 23.27% of income
2-5% pay 17.21%
6-10% pay 12.44%
11-25% pay 9.29%
26-50 pay 6.75%
51-100 pay 2.59%

Overall average rate 12.24%

Based on that information, as adjusted gross income goes up so does the percentage taken in taxes.

If you look at my posts on this thread you'll see that I'm not talking about percentages of the total taxes collected by the IRS. I'm saying that some people like Buffet, who are very, very, wealthy, are paying in the 15-18% tax bracket, while people making a couple hundred thousand a year are in the 30-35% bracket (ballpark numbers).

Do you really want the rich to pay the same percentage of gross income in taxes as others, because it seems like that would be a massive handount to the top 5% who currently pay above the average rate?

No. My point in this thread, is that I don't think millionaires and billionaires should get away with paying 15% income tax (the ones who make most or all their income from long term capital gains) while cops and other working people pay 20 to 30% or more.

 

[Jaggy Bunnet]

To tax the "mega rich" isn't income tax the incorrect way to do that? Truly wealthy people (Like Buffett) have most of their income in capital gains and such. Capital gains tax maxes out at 15%, which is why the top couple percent of wealth earners really don't pay a high tax rate at all.

The people at the top couple percent of taxable income are not the same people. Raising the income tax on the top earners is going to primarily affect people like athletes, musicians, actors, and probably lower-level execs from some of the more decadent mega-corps. Income tax is not the tax the uber-rich like Buffett would even care about one way or the other.

Capital gains are included within total income for the purposes of Federal Income Tax but, as you note, are taxed at a different rate. It would be possible to increase the rate paid on capital gains, but that would be an income tax change.

The problem I see with the UK tax system (and I'd be interested to know if it is the same in the US) is that there are a number of very high marginal tax rates at very low income levels. Those arguing for lower tax on relatively high earners (such as the 50% rate recently introduced in the UK) cite its disincentive effect but do not address the issue of marginal effective rates of 95% plus that apply to those on very low income through a combination of tax, removal of tax credits and loss of entitlement to benefits. Now that is a disincentive.

 

[Jaggy Bunnet]

No. My point in this thread, is that I don't think millionaires and billionaires should get away with paying 15% income tax (the ones who make most or all their income from long term capital gains) while cops and other working people pay 20 to 30% or more.

I think it is important in these discussions to talk about marginal tax rates - which I think is consistent with what you are saying. It matters not if the rich pay a higher percentage of their total income if the issue is that on the next dollar earned they will pay less than someone on average earnings.

 

[3point14]

I do like the way no-one's ever allowed to argue for a higher tax rate for anybody.

If you argue for a higher tax rate for higher earners than yourself, you're simply jealous and spiteful.


If you argue for a higher tax rate for those at your own income bracket and higher then you should simply send the government your own money and shut up.


Both are dishonest arguments designed to simply shut down debate. People who offer up these arguments are unable or unwilling to see that people saying these things are making a political statement, not a personal one.

I would be interested in a debate about the relative merits of various taxation increases, but no-one is ever allowed to have that debate through all the children crying 'You're just jealous, poopy head!' or 'But Mommy, he should do it first!'

Until certain people grow up and recognise a political point when they see it, it's very tricky to actually assess the merits of the arguments.

 

[UndercoverElephant]

I do like the way no-one's ever allowed to argue for a higher tax rate for anybody.

If you argue for a higher tax rate for higher earners than yourself, you're simply jealous and spiteful.

Indeed, except this argument only actually works in the United States. Everywhere else, people see right through it.

Both are dishonest arguments designed to simply shut down debate. People who offer up these arguments are unable or unwilling to see that people saying these things are making a political statement, not a personal one.

I would be interested in a debate about the relative merits of various taxation increases, but no-one is ever allowed to have that debate through all the children crying 'You're just jealous, poopy head!' or 'But Mommy, he should do it first!'

Until certain people grow up and recognise a political point when they see it, it's very tricky to actually assess the merits of the arguments.

Yup.

 

[stevea]

Linky


Well, that's from the horse's mouth, I'd say.

Well - it's from some part of the horse, but a little farther back.

1/ Buffet doesn't really believe it OR he; be donating his personal wealth to the US Gov instead of the private Gates Foundation. So when you listen to his money instead of his mouth he is saying private enterprise and charity beats the snot out of government spending.

2/ What exactly prevents Buffet from donating money to the Gov ? No - he's typical of old codgers who have made their stash and scr*w the younger people trying to make theirs. Very common attitude. Note income is taxed NOT WEALTH so Buffet doesn't give a rats *ss if all his young competitors are scr*wed with heavy taxes. He doesn't care that all this does is ensure that only Ukranians and Chinese are among the ultra-rich.

I don't know why more people in the U.S. aren't furious that many millionaires and billionaires pay 15-18% income tax while working people making $40k a year pay 25%. To establish and continue the Bush tax cuts during war time and economic strife is deplorable.

Who says a percentage is "fair" - that's insane. Several years ago ~2005, Buffet said he paid only 17.7% of income (mostly cap-gains at 15% tax) and his secretary paid more. First - that's IMPOSSIBLE unless we are including both the employee & employer SocSoc and Medicare contributions (technically not income tax). so let's say we do and his $85k/yr secretary pays ~$25K on 'tax' and Buffer pays about $8M in tax (17.7% 0f $45M).

What is fair about one office worker paying 320 time more tax than another ? Only a socialist/ne'er_do_well can see any fairness in that sort of 'eat the rich' class warfare. There is absolutely no rational sense in which that is fair. Buffet doesn't PERSONALLY use 320 times more water and fire and military and roads than his secretary. Envy was one of the 7 deadly sins - now it's considered a liberal virtue.

Second - exactly what sort of society are we heading toward where half the population pays ZERO net taxes, and the top 3% pays ~45% of income taxes ? Representation without taxation is just as obnoxious as the obverse. We can't have a functional democracy when >50% are net recipients of federal largess and there is a constant scr*w the rich attitude. I'm not that wealthy but I'm about an inch away from leaving.

 

[icerat]

Second - exactly what sort of society are we heading toward where half the population pays ZERO net taxes, and the top 3% pays ~45% of taxes ?

You're right. The kind of enormous income disparity that evidences is serious. Any suggestions on how to decrease the huge and growing gap between the income of the rich and the income of the poor?

 

[stevea]

You're right. The kind of enormous income disparity that evidences is serious. Any suggestions on how to decrease the huge and growing gap between the income of the rich and the income of the poor?

You seem to have an envy problem that prevents you from reading properly. How does it harm anyone that Buffet makes $45M in cap-gains ? How does taking more than $8M of his money benefit anyone ?

You're "let's cut the wealthy down to size" sensibility is exactly the reason no one wants to employ or invest in the US. The anti-employer/pro-employee attitude is self-defeating.

 

[LTC8K6]

You're right. The kind of enormous income disparity that evidences is serious. Any suggestions on how to decrease the huge and growing gap between the income of the rich and the income of the poor?

What can be done to reduce the number of people riding for free and increase the number of people contributing to the fare?

Could we just tax the poorer half a little? Maybe 1%?

No, because that suggestion gets the same lid clamped on it as mentioned above, merely to end the argument.

Listen, let's all just sit back and wait until we all go off the cliff, because absolutely nothing is going to be done about the problem.

The main problem is the massive waste of tax money on crap that we don't
need. It's barely mentioned. Almost no one talks about any serious cuts in spending, except for the military.

We have a pork based system, and it's not going anywhere until the money finally runs completely out and the system stops working.

Until then, just get used to political statements about the issue, because that's all we are going to get.

 

[daenku32]

What can be done to reduce the number of people riding for free and increase the number of people contributing to the fare?

Could we just tax the poorer half a little? Maybe 1%?

No, because that suggestion gets the same lid clamped on it as mentioned above, merely to end the argument.

Listen, let's all just sit back and wait until we all go off the cliff, because absolutely nothing is going to be done about the problem.

The main problem is the massive waste of tax money on crap that we don't
need. It's barely mentioned. Almost no one talks about any serious cuts in spending, except for the military.

We have a pork based system, and it's not going anywhere until the money finally runs completely out and the system stops working.

Until then, just get used to political statements about the issue, because that's all we are going to get.

Pork spending is a tiny fraction of the system.

We've talked about allowing Medicare Part D to negotiate drug prices, and that should be a bipartisan issue, but it's not going anywhere.

I guess what I'm saying is that if you start pointing out the specific waste then you might have a point. Just keep in mind that people might disagree as to what counts as waste.

 

[Segnosaur]

I do like the way no-one's ever allowed to argue for a higher tax rate for anybody.

I don't think everyone here is rejecting arguments for higher tax rates out of hand.

I think people are rejecting bad arguments for higher tax rates.

The rational for offering lower tax rates on capital gains has been laid out multiple times in this thread. (The risks involved, the benefit to society, the fact that those capital gains are additionally getting affected by corporate taxes, etc.) On the other hand, those arguing for higher taxes (primarily jimtron) seem to be basing so much of their arguments on emotion ("Rich paying less than their secretaries!", "Rich paying less than teachers!"), and seem to be avoiding the points raised against him.

Start dealing with the issue of how to better encourage risky (but beneficial to society) investments when such investments will be hit by higher taxes. Lay off the whole "secretaries pay more than their bosses". Then perhaps people might be more receptive to talk of higher taxes.

 

[Skepticemea]

Do I have the right of this:

Warren Buffet believes that taxes on the super-rich are too low, having himself paid only c17% of his personal income last year. This pov is attacked as rubbish by people who almost certainly pay a flat rate tax on their income at a far higher rate. Que? Are we to believe that his critics' altruism is greater than Buffets?

Speaking of his altruism, stating that if he's unhappy with the level of tax he pays he should donate to the government seems a little odd. Are those who have suggested this saying themselves that the government is the best place for this money to go to or are they supporters of the American right's pov that charity is best dealt with voluntarily rather than doled out federally?

Seems like a lot of "cake and eat it" in this discussion.

 

[Molinaro]

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

That would only make sense if he was asking for a change in the tax code from which he was exempt.