Tax the Rich!!!

[Baba]

Said from one of their own, not some ranting left coaster.
Hopefully when the tea party hangover has passed we'll actually use some rational and humane ways to solve the multitude of ills in our country and society.

http://www.nytimes.com/2011/08/15/opini ... -rich.html


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

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.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

[LGM]

I have to give Buffet credit... he knows when he's got it too easy, and is willing to pay more. He's able, and willing. He seems to dislike being "coddled".

Now, how do we get more to pay as they are able? Used to be way more taxes on uber wealthy... and fewer ways out of paying.

I'm shaking my head that I pay more percentage in taxes than Warren Buffet.

[Mighty Mouse]

Nothing is preventing Buffet from paying more taxes. He does not have to take the deductions he takes, nor does he have to structure his finances to maximize his tax savings.
He cannot have been surprised at the disparate tax structure in a progressive tax system. But while he was building up his wealth in the advantageous system, he did not say a word about the apparent inequality. Now that he is financially secure, he's willing to pay more. How convenient.
There is nothing wrong with the sentiments in the article. But it would mean more if he lived the life that he proposes. Plus, how about pushing the government for more responsible spending with the money they already have instead of arguing for more money to be poured over the financial hole that is DC.

[stinkfingers]

Spoken like a true neo-liberal, smacky. government is the problem, ad nauseum. Of course it has become a truism that the politicians who cling to this slogan the longest inevitably prove it's truthfulness by becoming the problem themselves.

See GW Bush's WMD in Iraq, or response to Katrina. Government certainly was the problem there, eh?

MM: You make some pretty appealing points there, but don't forget that when Buffet started out he was paying more in taxes than he is now.



He would have been paying up to 70% of his income in taxes until the arrival of Ronald Reagan and the "government is the problem" fellas.

The arrival of Saint Reagan not only saw income taxes of the rich fall, but also foretold of the beginning of the end of the middle class/working class:


So: Tax rates drop on the rich, while their earning sky rocket through neoliberal trade arrangements and domestic policies. The wages of working class and low-middle class stagnates, and now are in decline. This means that this population's tax contributions have nearly dried up. A more vibrant working/middle class would have led to more tax revenues...

But the other aspect of this is that the top 1 to 5 percent have become super rich via neoliberal arrangements. They have all the money now thanks to off-shoring of production and through their participation in absurd stock market wizardry.

see that? the top 1 percent control 42% of the wealth. The top 5% CONTROL 75% OF THE WEALTH! Why am I shouting?

Smacky, as long as you and your kind view this as a "spending problem" instead of an income distribution problem...or a taxation problem (call it what you will, it's neoliberalism) things will continue to head in this direction.

The neoliberals have been riding this country into the ground since Reagan, and they continue ahead full steam, whether Clinton is at the helm, or Obama, or a Bush. They control both parties, though the completely own the Rs, and merely most of the Ds.
--They've entered trade agreements with communists who control their nations banks and subsidize production, and call it free-trade.
--They've changed legislation so that they can send production jobs overseas in the name of "efficiency" which they then say was also "inevitable" in the face of globalization. But they created globalization.
--They've privatized enterprises formally conducted by government. Military, prisons, schools. The biggest reason we had no draft during Iraq is because there were over 100,000 private "contractors" fighting there. And we got the bill
-- They've deregulated entire industries, with the financial sector unfortunately the most obvious example
-- They see corporations as "citizens" and money as "free speech"

And they've brought us here, to the brink. 40 years ago, no one knew what the hell neoliberalism was. A family was able to buy a house and a car on ONE income. Mom could stay home if she liked. Dad could make a living at the factory. And college was affordable.

And then came Goldwater, Reagan, Rupert Murdoch and the neo-liberals. "Get government off our backs!" they clamored. And they raised what has been called "The Revolt of the Rich." We are now living the results of this revolt.

You all curious about what feudalism was like? I have a feeling we're all about to find out. For a twist, throw in rampant environmental degradation. Feudalism on a used-up planet.

Good times!

We spend too much! You know what? You're right. We do.

But I don't remember you saying that during Bush The Lesser's Reign. And he borrowed money from China to lower taxes on the rich. He put two wars on the tab. He structured (and then Obama implemented) a bailout for wallstreet and banks.

We do spend too much. But we also give too much away.
One last thing:
You will only be able to cuddle with your neoliberal ideology in comfort for so long. Eventually the top 1% will have it all. You better have enough sense to fear the other 99%.

Is that the America you want?

We didn't get here by accident. This was the plan. Their plan, and right now it's working out exactly as they wanted it to.

[supratank]

I love the flat tax idea. Hope it makes it someday.

As for Buffet, I am fine for him to write a massive check to the government! Why write an op-ed piece, just write the check and give it.

In fact, he could set up a bank draft to the government every month. I am fine for all wealthy people who feel this way to do this.

For me, i am barely making it financially (in other words, its tight all the time) and I don't want the government taking more from me. I want people who are not paying taxes to pay something - proportional to their income. I want radical changes to the way we spend money in this country, whether it be defense or entitlements. I would love a small national sales tax, a reform of the tax system to a flat tax, reductions in spending across the board (yes, even defense) and some different attitudes all around.

Most of all, I think the government has shown time and time again that its terrible at managing money. Absolutely terrible. Wasteful. Ridiculous.

Until that changes, we are as Americans are all in trouble. This isn't about politics for me, its about management and some innovation (or is it common sense?) from those in leadership (both parties) that is desperately needed.

[stinkfingers]

Smacky, don't get all butt-hurt cause I call you a neo-liberal. You are, and you're in good company.

Guys, the flat tax idea isn't a very good one. Here's why. You will agree that staying alive costs a certain amount of money. Let's just say that it costs around 15 thousand dollars a year to survive. You know, beans, rice, second hand clothes, a mattress at the Y. You could probably do it.

Incidentally minimum wage earners make around this amount each year. Here's the point: nearly 100% of what they make goes to sustaining life. They can't pay 15% of what they make. Let's raise their salaries a tad: say they make 20,000 a year (but still spend 15K to survive). 15% (to use your number) would be three grand. Leaving them with 2 grand "expendable income" after taxes. hum.

Now let's take a guy who makes 100 grand. Let's just say that he lives much better and spends 50,000 on his living arrangements, sustenance and clothing. At 15%, the flat tax would leave him 35 grand. Aside from living better, he also has enough money to invest, vacation, get prostitutes, etc.

You get it? Flat tax is no damn good. Because a non-progressive tax affects the poor disproportionately. As do sales taxes. It's a no-brainer.

Sound smarter at parties by not talking about how awesome a flat tax would be. You're welcome! The working poor thank you.

Smacky: I agree in general about the Gu'ment spending money ineffectively, too muchly, wastefully. I disagree about the extent, and of course the timing of republican critique of Obama's spending plans is more than suspect. Moving beyond this, I question your analysis.

Want to know why they're not doing that? It's called the government. Government control = trying to create a risk free environment. Sorry, but that's not the way our economy works

That's just silly. Let's do consider Apple. They are sitting on cash....how'd they get so mucy? 1. They make a kick-ass product 2. They pay nothing to produce their products because they've off-shored production to China 3. They benefit by being HQed in a country that has some of the lowest corporate tax rates in the civilized world. That explains the cash (and hints at why the Gu'ment has so little). Now, why are they not reinvesting it?

You say it's because the government dissuades them, but you don't elucidate how. I'll assume you're talking about regulation.

If so, you're going to have to quit being lazy and explain yourself. Maybe use a chart.

Where would Apple invest their money anyway, Smacky? In China, where all their factories are? Why should they? Or in the stock market? Laughable! I think everyone with any sense has figured out that the stock market is an increasingly transparent shell game where unscrupulous financial wizards have nothing to sell but debts. These companies are sitting on cash because they have no place to invest anymore.

They aren't about to invest in America, because their production facilities are overseas.

You want to know what the real problem is? That these companies, banks, financiers, and assorted rich Mutherforkers are sitting on vasts amounts of cash. These are the top 5%. They control 75% of the wealth, and they are sitting on it.

Which means the bottom 95%, the guys who spend a larger proportion of their income just staying alive, cannot fuel the economy through consumption because they are out of cash.

Smacky, your side won. And this is what it looks like. If you are still chapped at me, look up neoliberalism. Yes, you'll see Clinton referenced, the guy who took GH Bush's Nafta program and shoved it down our throats. You'll also see Larry Summers, T. Geitner and other Obama acolytes pictured there.

It's not so much about R vs D anymore (thanks in no small part to corporations as citizens, money as free speech). Corporations and monied interests have engineered this economy, co-opted democracy, and have arranged things in this order. They are the ones who fund our billion dollar political campaigns. You don't get elected without them.

You want to save this country? Forget the bullsh#t you've been fretting. You need to make sure that the people who spend money, get money. This means that bottom 95% have a way to earn a living.

This means that we have to produce something in this country. How about IPods? I bet Apple could survive even if they paid 40% more for production. Americans would appreciate the jobs, and then Apple wouldn't have to worry about where to hide all their stacks of cash...

This also means that you raise taxes on the uber rich to bring their cash hoards back into circulation.

Mush!

[fishtank]

Is this a debate? Stink's right, isn't he? I'm ignorant. Is the ship already sunk? Stink's not that smart, is he? Why don't our leaders think like stink?

[Rogue]

I don't buy into the notion that government spending is to blame. I blame the public's indifference. Stay for the radicals on either side of the coin nobody is all that interested. Admittedly, even those radicals just blindly flock to catch phrases like, "the flat tax." Gotta chuckle at how we love those catch phrases.

Stink and Smack, please summarize your thoughts in a 5 line paragraph at the top of your posts. I'm interested but not enough to involve my mouse wheel. How's that for indifference? Meh.

I'll be back!

[stinkfingers]

Pay attention, Rogue.

Fish: Of course I'm that smart. Of course I'm right. And you all know it.

We've been sold out, and we aren't being given a democratic means to resolve this.

Obama is a colossal mistake. He's a dope, a buffoon, and he's as politically naive a man as ever walked the earth. He needs to be primaried by someone with balls, and someone who actually cares about American workers more than he does about our corporate overlords.

He does not deserve a second term. However:

All of the Republicans are bat-sh*t crazy hate mongers who don't believe in science. We don't need more stupid, ideological religious zealots in the oval office.

Ross Perot??? ARE YOU OUT THERE?

Say what you will about Perot, he was the only one the ONLY candidate that knew NAFTA would turn American workers into service industry zombies.

It's desperate times, fellers.

[get some]

wow....theres a pulse in here.

i agree with rogues assessment that the people are ultimately responsible. we allow these chuckleheads to run things.

and of course i believe stink is always right.

aside from that, i just finished reading a book i have been meaning to read for quite some years that goes to the point of much of what is being discussed. its titled Confessions of an Economic Hitman by John Perkins. really an interesting read that outlines exactly the direction this country has gone in the past 40 years and the reasons why. much easier to digest than a Chomsky but still just as bitter a pill to swallow.

anyone know of it?