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Another rich guy trying to persuade average folk that all our problems would be solved if people like him were taxed more. Never mind that the Buffet-rule (mini

by webXL 14y ago

Another rich guy trying to persuade average folk that all our problems would be solved if people like him were taxed more. Never mind that the Buffet-rule (minimum 35%) would net $31 Billion over the next 11 years versus $7 Trillion in estimated deficits. (http://www.politico.com/news/stories/0312/74232.html http://www.politico.com/news/stories/0312/74232.html) Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, we go out to eat with friends and family only occasionally. I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new clothes or cars or enjoy any meals out. But you can invest... Your money isn't stuffed under your mattress, is it?? That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich. Are they really investments or are they just political favors that over-cost and under-deliver? (See the Department of Education, TARP, Medicare, war, etc.)

jiggy2011 14y ago
You invest whenever you buy something from a company. Perhaps it is better to have many millions of people making small investments in the form of purchases and therefor "voting" on what is better. Rather than having a few large investors who may likely invest in stuff they never or rarely use which could have a habit of creating a bubble.
- anon808 14y ago
  That's 100% correct. Investing by consuming products of companies scales a lot better than invest-betting on startups and financial instruments.
shmulkey18 14y ago
Investment: noun. Political payoff made with other people's money.
poppysan 14y ago
I have to disagree. 31 billion may not wipe out the deficit, but it is a good start. The alternative minimum tax is another good start. I think there will be no single thing that eliminates our deficit, and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it.
- Arelius 14y ago
  > especially if many of them are for it. I do not think that is the case, generally speaking.
- smsm42 14y ago
  We already have AMT. Which was introduced with exactly this purpose. Read its history: https://en.wikipedia.org/wiki/Alternative_minimum_tax#History https://en.wikipedia.org/wiki/Alternative_minimum_tax#Histor... It grew in an unmanageable mess of complicated rules that nobody understands and that has very little relation to its original purpose. Since it worked so nice the first time, we absolutely have to do it again. > and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it. By "many of them" you mean half-dozen wannabe politicians? You are confusing the opinion of tiny vocal minority with the opinion of silent majority which doesn't do talks on TV. The reasons not to do it are plenty - grabbing more money from productive people to feed insatiable appetites of runaway government spending projects is not a sustainable model. Since most of the politicians are afraid to talk about any serious spending cuts and measures to bring deficits under control, it will not end up in anything but the same deficits with more government spending. Government can spend arbitrary sums of money, so we'd just end up in the same place very soon.
aeturnum 14y ago
Though I support the idea that wealthy people should pay high taxes, perhaps even higher taxes than they do now, I think it's also worth noting that the US already gets 70% of all its taxes from the top 10%[1]. As long as we're keeping capitalism, I don't buy the argument that simply being rich is wrong. I'm also fairly skeptical of set limits on income, as setting those limits is very hard. What goes into it? How much money per year is the limit of a "Just" income? I don't think those questions have a definitive answer. I think repealing the bush tax cuts is a good idea. I think we should keep the estate tax. I think the "buffet rule" isn't bad, but it's no solution. I just wonder when people will say it's enough. Rich people pay less tax today than they did a decade ago - but they're making massively more money as well. If we add all those taxes, and there's still a massive income imbalance, what then? I think it's in everyone's interest to live in an equal society, for reasons that I don't want to get into right here. However, I'm dubious that can be achieved through targeting one social class or another. It seems like the American right is targeting the poor, while the left is targeting the wealthy. Everyone feels like a victim and just wants to keep what they have now. What a crappy situation. Edit: I missed some words. [1] http://www.taxfoundation.org/news/show/250.html#table6 http://www.taxfoundation.org/news/show/250.html#table6
- Arelius 14y ago
  >Though I support the idea that wealthy people should pay high taxes, perhaps even higher taxes than they do now, I think it's also worth noting that the US already gets 70% of all its taxes from the top 10%[1]. You do realize that if you make about $80K/year, you are already in the top 10% right? With that perspective, I feel that 70% of taxed income is absurdly low, the fact that 30% of all US tax dollars come from people making less than $80K/year is completely absurd to me. Edit: According to your table, the number is actually: $112,124 I still think my point stands.
  - eli_gottlieb 14y ago
    Your point doesn't stand. Read the rest of the data. Namely, notice that according to this data, the median AGI of the United States is $32,396/year. So half the population is making less than $32k/year. Yes, the top 10% and the top half of the population are taking on almost all of the income-tax burden.... because they (we, in my case) have almost all the income. There's nothing fair about demanding tax money from people who are just plain poor. You tax the rich, because rich people have money. Now, we could talk about distributing the tax burden "fairly" across the rich and the middle class, but that assumes we have large, broad middle class. Which we don't: making a "middle-class salary" like, say, $66,193/year already puts you on the border of the top 25% of the country. And then notice that to get from the top 25% to the top 10%, you have to make almost twice as much money. Top 10% to top 5% isn't that large of an increase, but top 5% to top 1% requires more than doubling your income. So, to be clear: To go from median to top 25%, you need to roughly double your income. To go from 75th percentile to 90th percentile, you need to almost double your income. To go from 95th percentile to 99th percentile, you need to more-than-double your income. We're operating a tax system designed for a bell-curve income distribution when what we actually have is a power-law income distribution.
donzimmer 14y ago
"Never mind that the Buffet-rule (minimum 35%) would net $31 Billion over the next 11 years versus $7 Trillion in estimated deficits." Yes. Tony Robbins did a great deconstruction of this in a video, "Is taxing the rich enough? Will that solve our problems?": http://www.youtube.com/watch?v=jboTeS9Okak http://www.youtube.com/watch?v=jboTeS9Okak (Regardless of what you think of Tony Robbins personally, this is an excellent video. I love how he breaks down exactly how much money it would take to really solve our financial issues.)
- gnaritas 14y ago
  Taxing the rich isn't about solving the budget problems, it's about solving the fairness problem. It doesn't matter that it isn't enough to make a fiscal difference, people want to feel the laws are fair and the rich are paying at least as much of a percentage of their income as the middle class. That's what the Buffet rule tries to address, equality.
  - webXL 14y ago
    Can you solve this fairness issue: "the US already gets 70% of all its taxes from the top 10%" The rich are getting richer not because they pay too little in taxes, they're getting richer because they rig capitalism with the help of their buddies in D.C.. Level the playing field of commerce, and you'll start to see some redistribution of wealth.
    - gnaritas 14y ago
      There's nothing wrong with the rich getting richer as long as they're paying an equivalent share of their income to taxes and not getting special treatment. Crony capitalism is a different problem entirely. And there's nothing unfair about the top 10% paying 70% of the taxes, in fact that statistic doesn't include the relevant data to even see if it's fair. It's not their share of total taxes that is relevant, it's what percentage of their income vs the percentage ordinary people pay that matters. For example, if that 70% only represents 20% of their income, then 70% isn't enough, they aren't paying a fair share.
    - 14y ago
muhfuhkuh 14y ago
"(See the Department of Education, TARP, Medicare, war, etc.)" TARP money has been paid back almost in full, depending on who you talk to. The DoE budget is like an eyedropper full in the wake of an ocean, compared to the DoD and elderly entitlements. And, if you want $FAVORITE_CANDIDATE to touch Medicare and Social Security, you go right ahead. I'm quite positive they will smile and move on, knowing where their constituent bread is buttered come election time. Believe me when I say that the elderly are the most important lobby in the US, and they don't even have to spend a dime to influence almost every branch of government.
- spamizbad 14y ago
  Targeting medicare and social security is silly anyway. They are funded via a separate tax (FICA/SECA) that only applies to the first 200K/250K of income. And the only reason why SS/Medicare are running out of money is because the government frequently borrows against social security surpluses. You may remember, back in 2000, one of Al Gore's campaign promises was to put social security into a "lock box" with the hopes of stopping this (IMO it likely would not have buy-in from congress but it's still a good idea).
  - smsm42 14y ago
    SS is funded by separate tax, but if there's a shortcoming, it is filled from the general budget, and if there's a surplus, it goes into general spending - so this distinction is an accounting fiction, both are incomes of the same government and as long as government fulfills its obligations nobody cares how the money got there. When SS starts running negative cash flow, the govt would have to refill that. Right now the promise of the govt is to refill that up to 2.7 trln - which is the size of SS Trust Fund - but nobody doubts for a second that the govt will in fact refill any sum necessary or will change SS rules (raise taxes and/or cut benefits, which are not legally guaranteed by anything) if necessary. So "lock box" here has very little meaning except taking part of the money out of circulation for no reason - it would definitely not stop the govt from borrowing money.
    - crusso 14y ago
splinterofchaos 14y ago
Actually, the facts back him up. Look at this article analysing the deficit (specifically, the graph near the top): http://www.cbpp.org/cms/index.cfm?fa=view&id=3490 http://www.cbpp.org/cms/index.cfm?fa=view&id=3490 This shows tax cuts as the largest cause in our deficit. I won't argue that getting rid of tax cuts will get rid of the deficit, but every tax season, the money lost from these cuts doesn't go towards reducing dept. Worse, the amount lost from cuts grows each season. "Are they really investments or are they just political favors that over-cost and under-deliver? (See the Department of Education, TARP, Medicare, war, etc.)" The graph shows that TARP doesn't impact the budget much.
- webXL 14y ago
  The tax cuts weren't just for the wealthy though. You're basically just doing the Buffet-rule by only removing Bush tax cuts for the wealthy. Not going to help much.
  - splinterofchaos 14y ago
    I realize that, but the tax cuts disproportionately benefit the rich, still (http://money.cnn.com/2012/01/03/news/economy/income_inequality/index.htm http://money.cnn.com/2012/01/03/news/economy/income_inequali...). Low income houses would still pay low taxes, just not no taxes. Plus, the idea that ending the Bush tax cuts and giving a break to the poor are mutually exclusive is a false dichotomy. The power exists to do both.
    - webXL 14y ago
      I never implied the rich didn't disproportionately benefit or you couldn't end the Bush tax cuts and help the poor at the same time. However, the net effect of that new tax structure wouldn't help the economy much, and therefore wouldn't help tax revenue.
      - splinterofchaos 14y ago
        You're right. I had misread your post.
eli_gottlieb 14y ago
But you can invest... Your money isn't stuffed under your mattress, is it?? Investment generates profits. It doesn't add to aggregate demand, but subtracts from it.
- webXL 14y ago
  Why should the government "invest" then?
  - eli_gottlieb 14y ago
    Because government "investments" are not for-profit investments in excludable (private/club) goods. They're non-profit "investments" in protecting commons goods and providing public goods.
cowkingdeluxe 14y ago
The main thing Buffet was trying to do was to raise the capital gains tax rate, which is only 15% right now. It would save quite a bit if it was raised back to 25%.
cpeterso 14y ago
> But you can invest... Your money isn't stuffed under your mattress, is it?? But much of that investment heads out of the US to foreign companies or foreign expansion of US companies.
gadders 14y ago
If he feels strongly about it, he is also perfectly at liberty to pay extra taxes voluntarily and lead by example.

by webXL 14y ago

jiggy2011 14y ago

You invest whenever you buy something from a company. Perhaps it is better to have many millions of people making small investments in the form of purchases and therefor "voting" on what is better. Rather than having a few large investors who may likely invest in stuff they never or rarely use which could have a habit of creating a bubble.

anon808 14y ago
That's 100% correct. Investing by consuming products of companies scales a lot better than invest-betting on startups and financial instruments.

shmulkey18 14y ago

Investment: noun. Political payoff made with other people's money.

poppysan 14y ago

I have to disagree. 31 billion may not wipe out the deficit, but it is a good start. The alternative minimum tax is another good start. I think there will be no single thing that eliminates our deficit, and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it.

Arelius 14y ago
> especially if many of them are for it. I do not think that is the case, generally speaking.
smsm42 14y ago
We already have AMT. Which was introduced with exactly this purpose. Read its history: https://en.wikipedia.org/wiki/Alternative_minimum_tax#History https://en.wikipedia.org/wiki/Alternative_minimum_tax#Histor... It grew in an unmanageable mess of complicated rules that nobody understands and that has very little relation to its original purpose. Since it worked so nice the first time, we absolutely have to do it again. > and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it. By "many of them" you mean half-dozen wannabe politicians? You are confusing the opinion of tiny vocal minority with the opinion of silent majority which doesn't do talks on TV. The reasons not to do it are plenty - grabbing more money from productive people to feed insatiable appetites of runaway government spending projects is not a sustainable model. Since most of the politicians are afraid to talk about any serious spending cuts and measures to bring deficits under control, it will not end up in anything but the same deficits with more government spending. Government can spend arbitrary sums of money, so we'd just end up in the same place very soon.

aeturnum 14y ago

Though I support the idea that wealthy people should pay high taxes, perhaps even higher taxes than they do now, I think it's also worth noting that the US already gets 70% of all its taxes from the top 10%[1]. As long as we're keeping capitalism, I don't buy the argument that simply being rich is wrong. I'm also fairly skeptical of set limits on income, as setting those limits is very hard. What goes into it? How much money per year is the limit of a "Just" income? I don't think those questions have a definitive answer. I think repealing the bush tax cuts is a good idea. I think we should keep the estate tax. I think the "buffet rule" isn't bad, but it's no solution. I just wonder when people will say it's enough. Rich people pay less tax today than they did a decade ago - but they're making massively more money as well. If we add all those taxes, and there's still a massive income imbalance, what then? I think it's in everyone's interest to live in an equal society, for reasons that I don't want to get into right here. However, I'm dubious that can be achieved through targeting one social class or another. It seems like the American right is targeting the poor, while the left is targeting the wealthy. Everyone feels like a victim and just wants to keep what they have now. What a crappy situation. Edit: I missed some words. [1] http://www.taxfoundation.org/news/show/250.html#table6 http://www.taxfoundation.org/news/show/250.html#table6

Arelius 14y ago
>Though I support the idea that wealthy people should pay high taxes, perhaps even higher taxes than they do now, I think it's also worth noting that the US already gets 70% of all its taxes from the top 10%[1]. You do realize that if you make about $80K/year, you are already in the top 10% right? With that perspective, I feel that 70% of taxed income is absurdly low, the fact that 30% of all US tax dollars come from people making less than $80K/year is completely absurd to me. Edit: According to your table, the number is actually: $112,124 I still think my point stands.
- eli_gottlieb 14y ago
  Your point doesn't stand. Read the rest of the data. Namely, notice that according to this data, the median AGI of the United States is $32,396/year. So half the population is making less than $32k/year. Yes, the top 10% and the top half of the population are taking on almost all of the income-tax burden.... because they (we, in my case) have almost all the income. There's nothing fair about demanding tax money from people who are just plain poor. You tax the rich, because rich people have money. Now, we could talk about distributing the tax burden "fairly" across the rich and the middle class, but that assumes we have large, broad middle class. Which we don't: making a "middle-class salary" like, say, $66,193/year already puts you on the border of the top 25% of the country. And then notice that to get from the top 25% to the top 10%, you have to make almost twice as much money. Top 10% to top 5% isn't that large of an increase, but top 5% to top 1% requires more than doubling your income. So, to be clear: To go from median to top 25%, you need to roughly double your income. To go from 75th percentile to 90th percentile, you need to almost double your income. To go from 95th percentile to 99th percentile, you need to more-than-double your income. We're operating a tax system designed for a bell-curve income distribution when what we actually have is a power-law income distribution.

donzimmer 14y ago

"Never mind that the Buffet-rule (minimum 35%) would net $31 Billion over the next 11 years versus $7 Trillion in estimated deficits." Yes. Tony Robbins did a great deconstruction of this in a video, "Is taxing the rich enough? Will that solve our problems?": http://www.youtube.com/watch?v=jboTeS9Okak http://www.youtube.com/watch?v=jboTeS9Okak (Regardless of what you think of Tony Robbins personally, this is an excellent video. I love how he breaks down exactly how much money it would take to really solve our financial issues.)

gnaritas 14y ago
Taxing the rich isn't about solving the budget problems, it's about solving the fairness problem. It doesn't matter that it isn't enough to make a fiscal difference, people want to feel the laws are fair and the rich are paying at least as much of a percentage of their income as the middle class. That's what the Buffet rule tries to address, equality.
- webXL 14y ago
  Can you solve this fairness issue: "the US already gets 70% of all its taxes from the top 10%" The rich are getting richer not because they pay too little in taxes, they're getting richer because they rig capitalism with the help of their buddies in D.C.. Level the playing field of commerce, and you'll start to see some redistribution of wealth.
  - gnaritas 14y ago
    There's nothing wrong with the rich getting richer as long as they're paying an equivalent share of their income to taxes and not getting special treatment. Crony capitalism is a different problem entirely. And there's nothing unfair about the top 10% paying 70% of the taxes, in fact that statistic doesn't include the relevant data to even see if it's fair. It's not their share of total taxes that is relevant, it's what percentage of their income vs the percentage ordinary people pay that matters. For example, if that 70% only represents 20% of their income, then 70% isn't enough, they aren't paying a fair share.
  - 14y ago

muhfuhkuh 14y ago

"(See the Department of Education, TARP, Medicare, war, etc.)" TARP money has been paid back almost in full, depending on who you talk to. The DoE budget is like an eyedropper full in the wake of an ocean, compared to the DoD and elderly entitlements. And, if you want $FAVORITE_CANDIDATE to touch Medicare and Social Security, you go right ahead. I'm quite positive they will smile and move on, knowing where their constituent bread is buttered come election time. Believe me when I say that the elderly are the most important lobby in the US, and they don't even have to spend a dime to influence almost every branch of government.

spamizbad 14y ago
Targeting medicare and social security is silly anyway. They are funded via a separate tax (FICA/SECA) that only applies to the first 200K/250K of income. And the only reason why SS/Medicare are running out of money is because the government frequently borrows against social security surpluses. You may remember, back in 2000, one of Al Gore's campaign promises was to put social security into a "lock box" with the hopes of stopping this (IMO it likely would not have buy-in from congress but it's still a good idea).
- smsm42 14y ago
  SS is funded by separate tax, but if there's a shortcoming, it is filled from the general budget, and if there's a surplus, it goes into general spending - so this distinction is an accounting fiction, both are incomes of the same government and as long as government fulfills its obligations nobody cares how the money got there. When SS starts running negative cash flow, the govt would have to refill that. Right now the promise of the govt is to refill that up to 2.7 trln - which is the size of SS Trust Fund - but nobody doubts for a second that the govt will in fact refill any sum necessary or will change SS rules (raise taxes and/or cut benefits, which are not legally guaranteed by anything) if necessary. So "lock box" here has very little meaning except taking part of the money out of circulation for no reason - it would definitely not stop the govt from borrowing money.
  - crusso 14y ago

splinterofchaos 14y ago

Actually, the facts back him up. Look at this article analysing the deficit (specifically, the graph near the top): http://www.cbpp.org/cms/index.cfm?fa=view&id=3490 http://www.cbpp.org/cms/index.cfm?fa=view&id=3490 This shows tax cuts as the largest cause in our deficit. I won't argue that getting rid of tax cuts will get rid of the deficit, but every tax season, the money lost from these cuts doesn't go towards reducing dept. Worse, the amount lost from cuts grows each season. "Are they really investments or are they just political favors that over-cost and under-deliver? (See the Department of Education, TARP, Medicare, war, etc.)" The graph shows that TARP doesn't impact the budget much.

webXL 14y ago
The tax cuts weren't just for the wealthy though. You're basically just doing the Buffet-rule by only removing Bush tax cuts for the wealthy. Not going to help much.
- splinterofchaos 14y ago
  I realize that, but the tax cuts disproportionately benefit the rich, still (http://money.cnn.com/2012/01/03/news/economy/income_inequality/index.htm http://money.cnn.com/2012/01/03/news/economy/income_inequali...). Low income houses would still pay low taxes, just not no taxes. Plus, the idea that ending the Bush tax cuts and giving a break to the poor are mutually exclusive is a false dichotomy. The power exists to do both.
  - webXL 14y ago
    I never implied the rich didn't disproportionately benefit or you couldn't end the Bush tax cuts and help the poor at the same time. However, the net effect of that new tax structure wouldn't help the economy much, and therefore wouldn't help tax revenue.
    - splinterofchaos 14y ago
      You're right. I had misread your post.

eli_gottlieb 14y ago

But you can invest... Your money isn't stuffed under your mattress, is it?? Investment generates profits. It doesn't add to aggregate demand, but subtracts from it.

webXL 14y ago
Why should the government "invest" then?
- eli_gottlieb 14y ago
  Because government "investments" are not for-profit investments in excludable (private/club) goods. They're non-profit "investments" in protecting commons goods and providing public goods.

cowkingdeluxe 14y ago

The main thing Buffet was trying to do was to raise the capital gains tax rate, which is only 15% right now. It would save quite a bit if it was raised back to 25%.

cpeterso 14y ago

> But you can invest... Your money isn't stuffed under your mattress, is it?? But much of that investment heads out of the US to foreign companies or foreign expansion of US companies.

gadders 14y ago

If he feels strongly about it, he is also perfectly at liberty to pay extra taxes voluntarily and lead by example.