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I'm a huge fan of Warren Buffet but in this case I think the math just doesn't seem right. I don't have the exact numbers, I took data from wikipedia and the NY
by pakitan 15y ago
I'm a huge fan of Warren Buffet but in this case I think the math just doesn't seem right. I don't have the exact numbers, I took data from wikipedia and the NYT article, so, please, let me know if my math is way off.
From the article, there are about 200,000 people with income of $1M+. Let's make it $5M per person. That's 1 trillion USD combined income.
The rest of the taxpayers seem to be about 200,000,000 with an average income of about $25,000. Combined income = 5 trillion.
So, if they reduce the tax of the bottom group with 2%, as Mr. Buffet suggests, the tax of the upper bracket has to be hiked with 10% just to compensate. And if we add another 10%, just for the fun of it, that's 100 billion taken from the rich but it's still a measly part of the budget (around 3 trillion) not to mention the debt (15 trillion).
And don't forget that people with 1M+ income have a vast number of legal and semi-legal tricks at their disposal to reduce their tax rate. The moment you increase the tax too much, you start seeing money flowing to offshore locations.
So, while "tax the rich more" and "let them share the burden" are great feel-good slogans, I don't think they offer any practical solution for the huge USA deficits.
- benjoffe 15y agoYour big assumption there that those 200,000 people with income of $1M+ have an average of $5M per person is where your logic fails. This source: http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&ctype=l&strail=false&nselm=h&met_y=personal_income#ctype=l&strail=false&nselm=h&met_y=personal_income&scale_y=lin&ind_y=false&rdim=region&ifdim=region&hl=en&dl=en http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&#... shows the US total personal income for 2010 being over 12.5 trillion, your two groups only add up to 6 trillion.
- pakitan 15y agoWell, given some kind of power law distribution, I don't think the $5M are that far off. In fact, this suggests that my guess may have been on the higher end: http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph http://motherjones.com/politics/2011/02/income-inequality-in... It says average income for top 0.1% is $3M and those 200,000 are exactly the top 0.1%. I'm not sure where the huge discrepancy comes from, when it comes to the total personal income stats you posted and I hope someone can clear this up.