Buffett: Tax the Rich

[jimtron]

Speaking of risk, should tax on gambling winnings be low since gambling is so risky?

 

[Segnosaur]

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.

I don't believe I've argued for higher taxes anywhere in this thread...

While it is true that you haven't argued for an increase in the overall tax rate for any group, you've argued for an increase in the tax rate applied to capital gains, even after multiple people have explained the reasoning behind having the lower capital gains tax rate.

...and I hope I haven't resorted to emotional arguments.

Well, you've repeatedly brought up people like secretaries and teachers (occupations generally viewed with sympathy or favor) and compared them to the "rich". And you've done very little to address the issue of "risk" and "double taxation" that has been brought up.

So, if you're trying to point out sympathetic individuals and ignoring points of debate, it certainly looks like your trying to resort to "emotional arguments" (even if that wasn't your intention.)

Speaking of risk, should tax on gambling winnings be low since gambling is so risky?

No. The reason is that usually when gambling an individual is not betting an amount that would significantly impact their lifestyle. (I may loose a few bucks on lottery tickets or a few hundred on a trip to Vegas, but I won't loose my home.) I could also point out that there is less benefit to society when using "gambling" as an investment. Yes, some money may go to charity (or employing people), but overall its less useful to expanding the economy overall than (for example) starting a new business or buying new equipment.

Actually here in Canada lottery winnings are tax free.

 

[Segnosaur]

Risk is already factored into investments in the form of higher expected returns and in practice this is exactly how it works. Higher risk yield higher returns on investment so investors are already paid more for higher risk.

While higher risks can and do lead to higher returns, the problem is that not every investor looks at the expected return in such detail. (This is further compounded by the fact that it may be impossible to determine what the expected risk/return is, since there is no way to know for sure how successful a business will be.) The lower capital gains tax could be seen as a way to compensate for imperfect information and analysis ability.

Note that your logic has gone circular. You are arguing that higher income vehicles should be taxed less because they can expect to earn higher incomes.

No, I argued that a potentially higher income vehicle should be taxed less because they can expect to earn higher incomes, but could also result in them loosing money.

 

[LTC8K6]

I'm still struggling with the concept that the government would be involved tax wise either way on a long term investment I decided to make with my already tax paid income.

Such as if I were to sell gold I bought and have held for a long time.

 

[Babbylonian]

The lower capital gains tax could be seen as a way to compensate for imperfect information and analysis ability.

So a billionaire should get a tax break because he's a lousy investor? Weird.

 

[LTC8K6]

So a billionaire should get a tax break because he's a lousy investor? Weird.

You can even write off some of the losses if you're a really bad investor, can't you?

How weird is that?

Strange that the govt is involved at all, imo.

 

[Babbylonian]

You can even write off some of the losses if you're a really bad investor, can't you?

How weird is that?

I don't find that weird at all. That seems like a relatively sane way to encourage investing in new, innovative (thus inherently risky) things. In other words, it's one thing to offer a break to someone who's taken a bath on risky investments and quite another to offer a break to someone who made big money on risky investments. The latter is cake having+cake eating.

 

[Grizzly Bear]

Could you show evidence that 42% of Americans pay no taxes?

The 42% is from the tax foundation. You can view the briefing there: LINK
In some cases the "non payment" comes from tax credits in which the IRS is somewhat of a income source for some tax payers. From Politifact:

"The JCT found that for tax year 2009, roughly 22 percent of "tax units" (not exactly "households," but we’ll give Cornyn a pass on the terminology) ended up without any tax liability. Another 30 percent got money back from the government, through mechanisms such as the Earned Income Tax Credit, a longstanding policy that encourages low-income Americans to work by refunding money through the tax code. By contrast, JCT found just 49 percent of Americans owed anything to the government." source

eta:

And I'd bet that Buffet doesn't think 42% of Americans shouldn't pay tax...his point is that billionaires shouldn't be paying less than middle class people.

It's entirely possible he doesn't, but at the same token I have to wonder why Buffet doesn't at least suggest that the tax code itself is fixed. In some cases there have been reports that higher income (upper-middle class) have been included in some of the no-liability figures.

Exactly what kind of rates is the guy proposing for income earners of his stature? From what I've seen of most of the "non-partisan" reports the rich already have a higher burden than most of the country as it is. Just makes curious what rates he thinks are too high or too low. And would he be sounding the same tune if his his wealth were not primarily in the organizations he owns, rather than as earned income or otherwise.

 

[Skeptic Ginger]

Who claimed that the poor do not pay any taxes?

We are talking about taxes on income, not all taxes that people pay.

Nevermind...it's just an endless game...

I believe that is called back tracking and/or sidestepping.

Let's review:

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.

 

[Skeptic Ginger]

I guess with respect to the OP I'd be interested in seeing what Mr. Buffet has to say about the 42% who don't pay any taxes... Should this 42% of Americans get the benefits of government spending whilst contributing almost nothing to the basic costs?

And the lie is repeated once again.....

 

[Skeptic Ginger]

While it is true that you haven't argued for an increase in the overall tax rate for any group, you've argued for an increase in the tax rate applied to capital gains, even after multiple people have explained the reasoning behind having the lower capital gains tax rate......

If capital gains tax rates are so beneficial for the economy, why have the low rates done so little to stimulate the economy?

 

[Skeptic Ginger]

You can even write off some of the losses if you're a really bad investor, can't you?

How weird is that?

Strange that the govt is involved at all, imo.

What are you talking about? If I lose capital or gain it, the net gain is what gets taxed. The only difference is the fact one has to carry some losses over to subsequent years rather than have it negate all your gain in one year.

 

[INRM]

The problem with trying to tax the rich is this: They can move money to accounts offshore, control them with trusts set up in other countries.

 

[lomiller]

While higher risks can and do lead to higher returns, the problem is that not every investor looks at the expected return in such detail.

It's not government’s job to protect investors from their own mistakes. If an investor doesn’t consider risk the consequences should fall on them and them and under no circumstances should the government be attempting to encourage this behaviour.

The lower capital gains tax could be seen as a way to compensate for imperfect information and analysis ability.

This is already handled by investors pricing in risk in the form of higher returns for higher risk investments. There is no need to tilt the field in favour of higher risk investments and in fact it’s probably a very bad idea to try and do so.

 

[KingMerv00]

Again, what's stopping him from sending in a check if he thinks he isn't being taxed enough?

This question is not relevant.

Buffet might donate to the government but thinks he doesn't have enough to make an impact so he favors taxing the wealthy.

Buffet might refuse to donate but would rather give money through taxes because it is easier and because the income from other wealthy people will be beneficial to society.

Buffet might be a hypocrite and wants everyone ELSE to pay while he hoards his money. His hypocrisy is not relevant to whether or not a tax raise is a good idea overall.

 

[lomiller]

You can even write off some of the losses if you're a really bad investor, can't you?

How weird is that?

Nothing weird about it. If you had one investment that made $150K and another that lost $50K you are only up $100K and that’s all you should pay tax on. If you do really bad and don’t make any money at all you don’t pay tax at all, again nothing weird about it.

 

[Skeptic Ginger]

The 42% is from the tax foundation. You can view the briefing there: LINK
In some cases the "non payment" comes from tax credits in which the IRS is somewhat of a income source for some tax payers. From Politifact:

"The JCT found that for tax year 2009, roughly 22 percent of "tax units" (not exactly "households," but we’ll give Cornyn a pass on the terminology) ended up without any tax liability. Another 30 percent got money back from the government, through mechanisms such as the Earned Income Tax Credit, a longstanding policy that encourages low-income Americans to work by refunding money through the tax code. By contrast, JCT found just 49 percent of Americans owed anything to the government." source



It's entirely possible he doesn't, but at the same token I have to wonder why Buffet doesn't at least suggest that the tax code itself is fixed. In some cases there have been reports that higher income (upper-middle class) have been included in some of the no-liability figures.

Exactly what kind of rates is the guy proposing for income earners of his stature? From what I've seen of most of the "non-partisan" reports the rich already have a higher burden than most of the country as it is. Just makes curious what rates he thinks are too high or too low. And would he be sounding the same tune if his his wealth were not primarily in the organizations he owns, rather than as earned income or otherwise.

Your link talks solely about income tax, not all taxes and as such it is cherry picked to sound good for the Repub propaganda. In addition, those credits people got back, for the most part, only offset income tax liability, they did not result in money back that was not owed or paid in, which the article claims. I know because I qualified for all three of those credits intermittently over the last dozen years.

 

[Skeptic Ginger]

The problem with trying to tax the rich is this: They can move money to accounts offshore, control them with trusts set up in other countries.

So this is the reason to give them tax breaks?

 

[WildCat]

Yes, I imagine Buffet and Murdock and Gates will be quite happy to leave their home countries to avoid taxation.

Now, where can they move to that will provide a similar platform for them to continue making money and yet not tax that income? Somalia?

What you do is create a charitable foundation to shelter your money from taxation.

Not that Gates or Buffet would ever do such a thing, they'll leave it to the government.

 

[WildCat]

Income from investments is taxed as capital gains, which has tax rates far lower than income earned from employment.

Generally because we think it's a Good Thing^TM for peopleto make capital investments. The lower tax rate helps offset the risk of loss.

For employees working for wages or salary there is no risk of loss.