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Posted by howdy 4 years ago
"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice." -Warren Buffett, chief exec of Berkshire Hathaway
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Posted by Richard Bonine, Jr. 4 years ago
Here is the entire article that Howdy was quoting. There is nothing quite as validating as hearing such a message straight from the horse. And if the current pattern hold true, it will be entertaining as hell to view the many economic charts and muddled meanderings of Captain Google and his keyboard brigade in about a week.

Stop Coddling the Super-Rich
By WARREN E. BUFFETT
Published: August 14, 2011

http://www.nytimes.com/2011/08/15/o...src=tp&smid=fb-share

OUR leaders have asked for "shared sacrifice." But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as "carried interest," thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they'd been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It's nice to have friends in high places.

Last year my federal tax bill - the income tax I paid, as well as payroll taxes paid by me and on my behalf - was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income - and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine - most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It's a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn't refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion - a staggering $227.4 million on average - but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country's finances. They've been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It's vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country's fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can't fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million - there were 236,883 such households in 2009 - I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more - there were 8,274 in 2009 - I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice.
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Posted by Bridgier 4 years ago
I'm sure Rick or Korky can tell us why we shouldn't listen to someone who's won far more at the grand capitalist casino then they ever will, whose membership in the monied elite is factual, as opposed to merely aspirationaldelusional.

Or:

Warren Buffet thinks the Laffer curve is bull$hit. Who's going to tell him he's wrong?
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Posted by Frank Hardy 4 years ago
Take the 10 to 1 and run! Keep gay marriage out of national politics, along with every other social issue, and let's get on with it.

I really am getting to like Ron Paul.

FH
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Posted by Jan Cornutt 4 years ago
I never said that the rich shouldn't pay their fair share. But if I am paying an average of 36 percent, then the rich should also pay an average of 36 percent. I have always said we need tax reform and close the loopholes that allow the rich to pay less than their share. Until we get that tax reform and a budget and cut unecessary spending, I am against any tax increases......korkyII
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Posted by Bob L. 4 years ago
Hey Corky:

Here's a hint:

You don't pay 36% of your income in Federal income taxes.

You're welcome.
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Posted by Wendy Wilson 4 years ago
Rats, Bob. You beat me to it. Most folks don't have a clue what % they pay in federal income tax.
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Posted by Forsyth Mike 4 years ago
So you jack up the taxes on all the rich people by 10 or 20 or 100 percent. It's still not going to make much of a dent in the deficit.
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Posted by Gunnar Emilsson 4 years ago
But its one step in the right direction.

And, once again, for you slow thinkers out there, the deficit is not the problem.

Unemployment is the problem. The stagnating economy is the problem.

Wall Street gets it. The TeaTards and the social regressives here do not.
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Posted by Rick Kuchynka 4 years ago
it will be entertaining as hell to view the many economic charts and muddled meanderings of Captain Google and his keyboard brigade in about a week.



The wonder of Google, Richard is that it searches articles from sites of all persuasions, rather than just regurgitating what the Kos Kids,
DU'ers, or Huffponauts underlined for you that day

Warren's always entertaining when it comes to his tax diatribes, but the real crime (which he neglects of course to mention) is this:

Last year my federal tax bill - the income tax I paid, as well as payroll taxes paid by me and on my behalf - was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income



A little bar-napkin math shows that Mr Buffett apparently only declared about $40 million in income, which, for a 40+-billionaire is an obscenely low number. But I'm sure the jump in marginal rates from 36 to 40 or 50 or 90 or whatever the progressive definition of 'fair' is would ensure that the guy hiding 90% of his income from taxation in the first place is going to suddenly pay his fair share
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Posted by Forsyth Mike 4 years ago
Okay, I'll rephrase.

If you jack up the taxes on the rich by 10 or 20 or 100 percent, that's not going to increase hiring. It will decrease it, if anything. You think those rich people are going to tolerate less $$ in their pockets?

Just like raising taxes on "corporations." It would just make prices go up, which would make sales go down, which would make jobs disappear.

The more I read and hear about this economic situation the more I think we're just all screwed. No solution is going to make everyone happy, yet nobody wants to "give" anything to the other side. It's only a matter of time until the whole house of cards comes crashing down.

As you can no doubt tell, I don't know a whole lot about politics. Probably just enough to make me dangerous.
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Posted by howdy 4 years ago
Perhaps you should study economics as well...Trickle down econ didn't work during Reagan and it won't work now...History has already proven that...but those that don't pay attention to history are doomed to repeat it...sadly they take the rest of the nation with them...
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Posted by Rick Kuchynka 4 years ago
Define 'didn't work'

Compared to Obamanomics, Reaganomics was a stunning success.
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Posted by howdy 4 years ago
LOL, Obama has been in office a bit over two years, so I think you are speaking of the lasting effects of Bush policy that Obama left in place sadly...like the wars and also the tax cut for the rich...Get up to date Rick, you are throwing snowballs in a gun fight...
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Posted by Rick Kuchynka 4 years ago
Yeah yeah. And Bush's first term was all Clinton's fault.

Except all I heard at the time was what a terrible 'Jobless Recovery' Bush had. Thanks to Obama, that term has now been given new meaning.
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Posted by Jan Cornutt 4 years ago
Yep and Obama admin has doubled the national debt since he took the reins. In the end and I don't care if it is the left or the right in power, it's the middle class that's going to take it in the shorts. (and that is historically speaking) No matter who they are, our politicians are all in bed with big corporations and the rich. That's where they get their money for their political agendas.....korkyII
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Posted by Richard Bonine, Jr. 4 years ago
The wonder of Google, Richard is that it searches articles from sites of all persuasions, rather than just regurgitating what the Kos Kids,
DU'ers, or Huffponauts underlined for you that day


It is true that Google does search articles from sites of all persuasions. I'd encourage you to try reading some articles from publications like the Atlantic and the Economist. I think it is important to understanding both sides of the issue. True wisdom is knowing the right thing to do and then doing the right thing. There is not much wisdom found in one-sided ideologies. It is important to understand which side of the Laffer curve we are on. Raising taxes is a way of managing the Laffer curve to maximize revenue. The wise thing to do is raise taxes in certain economic classes.

If Mr. Buffet thinks he should pay more, I think we should listen and accept. Frankly, IMO we ought eliminate the corporate tax all together and raise the personal rate so that those in Mr. Buffet's economic class pay taxes on all of their income and not use multiple corporations as shelters.

I agree that we need to cut spending and do a lot of restructuring. But all of that needs to be done in a manner that keeps past promises to those who have paid into various systems over the many years. For every dollar of spending cuts in social programs there ought to be at least 5 dollars of cuts in military spending. It is absolutely pointless to go around the world attempting to install our form of freedom in other countries, while simultaneously shackling ourselves in economic slavery. Yet that is exactly what we are doing.

The slash and burn polices of the current crop of republicans are going to cause more problems then they solve. Going on the equivalent of an "economic crusade" or inquisition to rid the US of evil socialism is not the way to solve the problem. The facts are that life prior to 1913 was very bleak and people were not well cared for. Republicans seem bound and determined to take us back to those days.

[This message has been edited by Richard Bonine, Jr. (8/15/2011)]
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Posted by Mary Bonine 4 years ago
Perhaps Uncle Warren and 5 of his mega-rich friends should serve as advisors for the 12 member committee. Maybe then something will be accomplished.
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Posted by Steve Allison 4 years ago
The old "rich need tax cuts so they can hire people" keeps coming up. Let me say this about that statement. If you hire someone it is an expense and so are the other expense of paying an employee. Because business is taxed on profit, you pay no taxes on those expenses. This means if the rich want tax cuts to hire people all they need do is HIRE THE PEOPLE and their taxes will go down!!!! All this other crap about needing cuts or other incentives are just excuses to keep more money in their own pockets.
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Posted by howdy 4 years ago
Great idea Mary...at least Uncle Warren...he is a wise ole dude IMO...
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Posted by J. Dyba 4 years ago
A little bar-napkin math shows that Mr Buffett apparently only declared about $40 million in income, which, for a 40+-billionaire is an obscenely low number. But I'm sure the jump in marginal rates from 36 to 40 or 50 or 90 or whatever the progressive definition of 'fair' is would ensure that the guy hiding 90% of his income from taxation in the first place is going to suddenly pay his fair share



You should google the difference between 'worth' and 'income'.

Your statement is just ridiculously flawed.
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Posted by Bridgier 4 years ago
You should google the difference between 'worth' and 'income'.

You weren't supposed to notice that.
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Posted by Gunnar Emilsson 4 years ago
If you Google this site, you will find about 8-9 years worth of ridiculously flawed statements from Rick.
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Posted by Cory Cutting 4 years ago
I heard someone, I don't remember who it was, on CNN last night say that the ultra rich always put aside large amounts for donations and philanthropy. The suggestion was instead of giving, take the money and create jobs and expand their businesses, thus serving everyone instead of a single group.

This is a great idea, except if they were to cut off all the money to groups to do this, those areas would suffer. Not the best plan, but an idea is there somewhere....
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Posted by Tanneil Kuchynka 4 years ago
It is true that Google does search articles from sites of all persuasions. I'd encourage you to try reading some articles from publications like the Atlantic and the Economist.


I think you missed that I was mostly being sarcastic.

But anyway, there's good stuff in Atlantic and the Economist. I've linked to articles from both myself. Then again there's some utter crap published by both. Same as with any other publication. Each work stands or falls on it's own. Anything else is just judging the book by its cover.

You should google the difference between 'worth' and 'income'.

Your statement is just ridiculously flawed.


Yeah, I think I'm perfectly aware of the difference... but lets put it in context. The Laffer curve is built on the premise that the more punitive you make the tax structure, the harder people will work to work around it. On the left hand side of the curve (low tax rates) you have low tax revenue simply because of low rates. But people pay those rates because hey, why not? It's cheap

In the middle of the curve, you have high tax revenue because the tax rate is not cheap, but competitive... not too low, but not so expensive that it becomes more profitable to work the loopholes and/or take your money elsewhere.

On the right hand side of the curve you again have low tax revenue, but counter-intuitively high rates. Many find this idea controversial, but it really isn't. If your asking price isn't competitive, it should be no surprise that people will do whatever they can not to pay it. Just like McDonalds would go out of business trying to sell $20 Big Macs, America (as we know it) would go out of business trying to collect 75% of people's actual income.

What's so comical about Warren Buffett is that he knows how to throw out red meat to the torches and pitchforks crowd to make them think he's one of them. But the guy, for all intents and purposes doesn't pay taxes. By most accounts, Warren added $3 billion (with a B) to his net worth last year. And he only presented $40 million for taxation. Take his recommendation to the extreme. Collect a 100% tax rate on his 'taxable' income. Take 'all' 40 million. Do that, and you're barely collecting 1% on what Uncle Warren put in his pocket last year. Warren likes to talk about raising those tax rates. Why? Because essentially he doesn't pay them. The only people it would punish are the people who pay taxes in a more straightforward manner. And they'll quickly learn to do what Mr. Buffett does and hide their money from the government instead.

While one man's actions aren't proof of anything, Mr Buffett's experience is one data point that suggests we're still far on the right hand side of the Laffer curve. Where tax avoidance is costing the government much more than a lower tax rate would.
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Posted by Rick Kuchynka 4 years ago
Yeah! What she said!
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Posted by Cory Cutting 4 years ago
All that proves is that if one lives with Rick long enough, it WILL rub off on you!
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Posted by Denise Selk 4 years ago
Or Ricky just doesn't pay attention to whose account is logged in when he posts.
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Posted by Richard Bonine, Jr. 4 years ago
All that proves is that if one lives with Rick long enough, it WILL rub off on you!


That's pretty funny, Cory. But it might be flawed. It's pretty clear that Rick didn't rub off on his sister. I'm picturing the Kuchynka household was like the TV show Family Ties... with Rick starring as Alex P. Keton.

[This message has been edited by Richard Bonine, Jr. (8/20/2011)]
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Posted by Denise Selk 4 years ago
Keep in mind, I was moved out by the time Ricky was 14. At that time, he was much more concerned with El Guapo, Metallica being a sellout, and being the laughing stock of his class, than with political ideologies and the Laffer Curve.
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Posted by Wendy Wilson 4 years ago
By most accounts, Warren added $3 billion (with a B) to his net worth last year. And he only presented $40 million for taxation.


This is still a confusion between growth in net worth and income earned, two very different concepts. The increase in his net worth could, and probably does, come from the increase in value of his assets. An increase in the price of a company's stock or property held is not taxable income until the asset is sold. I don't know the ins and outs of Mr. Buffet's financial dealings, nor do I buy his "just one of the folks" spiel but it's not beyond the realm of possibility that his taxable income was only $40 million.
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Posted by Bridgier 4 years ago
El Guapo!!!! Obehigho!!! Good times.
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Posted by Cory Cutting 4 years ago
Richard, that was his wife that wrote that, not his sister! It is not ingrained in her... therefore it must rub off!

Denise, the funny thing is, he is still concerned with those things...
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Posted by Denise Selk 4 years ago
Cory, his wife didn't write that either. Ricky just didn't pay attention to who was logged in. I would have been as likely to write that as Tanneil.
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Posted by J. Dyba 4 years ago
Yeah, I think I'm perfectly aware of the difference...


Then you are purposefully ignoring it for the sake of an extremely weak argument.
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Posted by Rick Kuchynka 4 years ago
Funny. Lucky for me, Dr Laffer made much the same point about Buffett a couple days ago. I'm sure he doesn't understand the difference either.

http://www.cnbc.com/id/44191413/Buf...on_Ultra_Rich_Laffer

"If he really wanted to make (the tax code) fair, why doesn't he propose a wealth tax on everyone over $1 billion worth of wealth of 50 percent once and for all," Laffer said. "That would really work for him, but of course he's not going to suggest that because he would have to pay that."

Laffer said most of Buffett's wealth is in unrealized capital gains. "It's never seen a tax, and when he gives (the investments) to the Bill and Melinda Gates Foundation, it never will. This is ridiculous," he said.

The Laffer curve shows the relationship between tax rates and tax revenue. Its creator said that if "you raise tax rates on the rich, all the evidence suggests they pay less in taxes, because they can get lawyers, accountants, deferred-income specialists. They can change the location of their income, the timing of their income, the composition, and the location. They just leave."
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Posted by Rick Kuchynka 4 years ago
I don't know the ins and outs of Mr. Buffet's financial dealings, nor do I buy his "just one of the folks" spiel but it's not beyond the realm of possibility that his taxable income was only $40 million.


I'm not talking legality here, Wendy. What he's doing is perfectly legal. But Mr Buffett has gained a reputation, even among the investor class for his creative tax-deferment techniques.

http://www.businessweek.com/magazin...7/b3920043_mz011.htm

Anyway, it reminds me of a few years back when Warren was on a Death Tax crusade talking about how people like him should have to pay it. All the while he's setting up and fronting foundations to spoon feed his kids and evade death taxes altogether when he's gone.

When asked about the double-standard he said "If I had to give it to a single individual, or make some young Buffett a multi-billionnaire, or give it to the government, I'd absolutely give it to the government. I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations, will do a better job with lower adminsitrative costs and better selection of beneficiaries than the government."

http://www.cnbc.com/id/22199472/War...ty_Isn_t_a_Tax_Dodge

In other words, HIS money is too important to entrust to our wasteful government. But nobody else's money is. The hypocrisy is pretty boundless.

[This message has been edited by Rick Kuchynka (8/21/2011)]
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Posted by J. Dyba 4 years ago
Your first argument, pointing out Laffer's take on it, is completely supporting my point about worth vs. income. He flat out said that if Buffet dislikes his low INCOME tax so much, he should be suggesting a tax on his WORTH. Buffet has plainly stated income tax on the wealthy is insufficient.

As to the death tax issue, Buffet has made his stance crystal clear and stands by it(even your quoted article highlighted it). IF YOU DONATE YOUR WEALTH TO CHARITY, THE MONEY WILL PROBABLY BE BETTER SPENT. If you're not going to donate to charity, and it comes down to the government, making your offspring filthy rich, or an individual(this is not a charity), it should go to the government.

The fact you didn't comprehend this from that article gives me little hope you'll comprehend it here, as I am unable to make it any plainer spoken then what it was previously. I'm hoping you merely skimmed for the words you were looking for an missed the actual point of the article.
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Posted by Rick Kuchynka 4 years ago
He flat out said that if Buffet dislikes his low INCOME tax so much, he should be suggesting a tax on his WORTH. Buffet has plainly stated income tax on the wealthy is insufficient.


Sorry, but for that to make sense, you'd have to be saying that Buffett isn't talking about raising INCOME taxes for the wealthy. If you read his article, you'll see that he's primarily talking about raising INCOME taxes for the wealthy... aka the tax he doesn't pay, just like the Death Tax. Which is what I've been saying all along.

If he were being intellectually honest, as you suggest, he'd mention that his $40 million in 'taxable' income is chicken feed, and he'd spend less time talking about 17% of that meaningless amount.

He neglects to talk about his WORTH, because as he's repeatedly shown with his actions, he enjoys talking about taxes more than paying them.
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Posted by Rick Kuchynka 4 years ago
Here's another read from (Richard's favorite) economist Greg Mankiw on the same topic when Mr Buffett decided to play populist a few years back.

http://gregmankiw.blogspot.com/2007...ffetts-tax-bill.html

Even more striking to me is a fact that Mr Buffett did not emphasize: how low his taxable income is. His income of $46 million represents a mere 0.1 percent of his reported net worth of over $50 billion. That is not an impressive rate of return!

Why is it so low? I can think of at least four possible ways investors like Mr Buffet can keep their taxable income, as opposed to their true income, low:
They hold stocks that pay minimal dividends.
They avoid realizing capital gains.
They hold some of their portfolios in tax-free municipal bonds.
They give appreciated assets to charity, getting a deduction for the current market value without ever having to realize and pay tax on the capital gain.
Notice that raising tax rates, as Mr Buffett seems to want to do, would not much affect any of these tax avoidance strategies. Even if tax rates were raised substantially, the tax savvy Mr Buffet probably wouldn't be paying much in taxes as a proportion of his wealth or as a proportion of his true income.
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Posted by J. Dyba 4 years ago
So the gist of your side of this is "Don't tax the wealthy, they can afford to break the law easier."


Gotcha.
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Posted by Rick Kuchynka 4 years ago
Well, if you think that's what the message is, I'm not sure you've been listening to the debate.

Our tax system needs to be both competitively priced and substantially simplified. Easier said than done, I know. But the favorite 'fix' always talked about where you just jack rates on 'the rich' without worrying about incentive is just moving us further in the wrong direction.
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Posted by Gunnar Emilsson 4 years ago
We aren't talking about significant "jack the rates on the rich" here.

No one is talking that.

All we are talking about is returning to the rates under Reagan, H.W., and Clinton.

What's so wrong about that?

Especially since we have two wars to pay for.

What's so wrong about that?

If we want to "jack the rates on the rich", we can return to the times of the Eisenhower (Republican) administration. Where people sucked it up, and realized that for national defense, we had to pay for that.

But no, your sick blend of neocon/teabaggers wants it all, and wants to pay for nothing.

I think you are all a huge bunch of hyprocritical douchebags who are out to destroy our country. I am hoping by November 2012, the majority of the voters see through your destructive ways, and throw your tea party yahoos back out into their trailers.
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