kchoya
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Post by kchoya on Aug 16, 2011 10:06:54 GMT -5
People like to hide behind percentages to mask reality. Like it has been said, statistics don't lie but statisticians do. Ruth Marcus has an interesting article in the Post today making the argument for the upper income paying more. But she quotes some interesting statistics - but hides behind the statistics. Using her numbers - and including all taxes, not just income taxes, but payroll and state and local taxes - she says (once I unravel her statistics) that, on average, the lowest fifth household (in income) pay $726 a year in taxes, the middle fifth pay $9,030 in taxes and the upper fifth pay $66,175. Of course these are themselves only averages but they say that households, each enjoying the same benefits of national security, courts, police protection, etc., pay enormously different amounts to procure those benefits. I'm not saying they should pay the same amounts but at least let's deal in numbers rather than statistics. www.washingtonpost.com/opinions/rick-perrys-warped-tax-injustice/2011/08/15/gIQAvzwPHJ_story.html?wpisrc=nl_opinionsI'm not sure that all people do enjoy the same benefits of national security, courts, police protection, etc. (let's add infrastructure). If I'm a business owner who pays more in taxes (income and payroll), I am paying for the government to protect not only me and my home but also my business, not to mention the safety and security of the entire market that I operate in. I am paying for courts to enforce and uphold my contracts. I'm paying for roads that allow customers to come to my shop and put more money in my pocket. I am paying for whatever government does that allows people to live in a way that robbing my store is not their easiest way to get dinner that night. Or think of a government regulation on food quality. Imagine our ban on selling expired plankton as food is lifted and everyone in the business owner's town comes down with red tide poisoning. The employee has red tide poisoning. The business owner has red tide poisoning, and his business is ruined because everyone is too sick to buy what he's selling. Arguably, the business owner benefits more from those services than do my 9-5 employees, who just have their personal safety, their homes and personal property, and a commute to and from work everyday. Take that to a larger scale: I think an argument can be made that people with tens of millions of dollars and companies and businesses benefit much much more from the status quo than do the middle and lower-middle classes. Except you completely ignore the fact that the employee benefits by having an employer who pays the employee. |
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Post by hoyawatcher on Aug 16, 2011 10:13:31 GMT -5
What is interesting about the Buffet article and the discussion here and elsewhere is the lack of a definition of how to fix the "unfairness". Buffet doesn't really propose anything other than tax me and people like me more. OK - and for the moment let me ignore KCHoya's and others point that taxing him and his ilk more doesn't materially change anything other than make some folks feel better - but let me extend that into what "fixing it" means.
I think we all know Buffet's tax rate is based on his "income" being long term capital gains as opposed to a paycheck (and the fact his tax lawyers are good enough to avoid AMT but I digress). So it shouldn’t be a surprise to anyone that his tax RATE is lower than his secretary’s. This aspect of the tax code was designed to spur savings and reward investors for the risk to them and rewards to the country of long term capital investment. So are you saying you want to dump the LT capital gains rate because Buffet doesn't have a high enough tax rate on “income” he actually takes and you want to do away with LTCG? What about millions of Americans who have used this to build small and medium sized businesses or investors who use this to save and invest for college, retirement, etc?
Or are we saying we should simply tax wealth? So if Buffet is worth $50 B or whatever he owes some of that net worth to the government regardless of how liquid it is and whatever the implications of converting a non cash asset to cash? What about the private biz owners who don't have public markets for their asset? Even with public market assets the implications are significant.
Or should we simply tax consumption and not "income"? So if Buffet is spending 50X more than his secretary we simply tax that consumption and all is fair? That would mean we go with the Fair Tax proposal being pushed by some now which I don't sense a lot of support for.
Or is this simply handwaving in advance of the next election to get folks riled up? As has been stated here and elsewhere doubling the amount of tax you get from Buffet, Icahn and their ilk doesn't change the fundamental budget position of the US with the spending levels now projected. You have to look at the "rich" as defined by Obama to have any meaningful impact. So do we do away with capital gains treatment because its lower rate is simply unfair or if we go to a new system that does away with lots of “loopholes and deductions” (whatever those may be defined as) are we OK that the tax rates that come out of that are going to be a lot flatter and Buffet still won’t pay a lot higher percentage of his income in taxes?
I have to admit I still don’t get what the fix is?
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TC
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Post by TC on Aug 16, 2011 12:38:12 GMT -5
I think what's being lost here is that Buffet claims he paid $6,938,744 in income tax last year, only 17.4 percent of his taxable income. That means a guy worth $50B had less then $40M in taxable income last year. Without commenting on the merits of how the tax code operates in that respect, let's not pretend that raising taxes on Warren Buffet and other gazillionaires is going to solve anything. Even if you taxed Buffett at 50% last year, that only means the second richest person in the country is contributing only another $13M to the US Treasury. Spending is the problem, not taxing. Except that most of the rich aren't in a situation like Buffett where they take only nominal salaries (nominal in terms of his position), lead a modest existence, and have very little in terms of capital gains. Buffett is the outlier. The Bush tax cuts were worth what - 3 trillion over ten years? |
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TC
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Post by TC on Aug 16, 2011 12:39:41 GMT -5
But she quotes some interesting statistics - but hides behind the statistics. Using her numbers - and including all taxes, not just income taxes, but payroll and state and local taxes - she says (once I unravel her statistics) that, on average, the lowest fifth household (in income) pay $726 a year in taxes, the middle fifth pay $9,030 in taxes and the upper fifth pay $66,175. Of course these are themselves only averages but they say that households, each enjoying the same benefits of national security, courts, police protection, etc., pay enormously different amounts to procure those benefits. I'm not saying they should pay the same amounts but at least let's deal in numbers rather than statistics. www.washingtonpost.com/opinions/rick-perrys-warped-tax-injustice/2011/08/15/gIQAvzwPHJ_story.html?wpisrc=nl_opinionsSomething tells me EasyEd loves RBIs (vs WAR, OPS, ISO, FIP, etc) |
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TBird41
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Post by TBird41 on Aug 16, 2011 12:47:12 GMT -5
I think what's being lost here is that Buffet claims he paid $6,938,744 in income tax last year, only 17.4 percent of his taxable income. That means a guy worth $50B had less then $40M in taxable income last year. Without commenting on the merits of how the tax code operates in that respect, let's not pretend that raising taxes on Warren Buffet and other gazillionaires is going to solve anything. Even if you taxed Buffett at 50% last year, that only means the second richest person in the country is contributing only another $13M to the US Treasury. Spending is the problem, not taxing. Except that most of the rich aren't in a situation like Buffett where they take only nominal salaries (nominal in terms of his position), lead a modest existence, and have very little in terms of capital gains. Buffett is the outlier. The Bush tax cuts were worth what - 3 trillion over ten years? But no one wants to rescind all of the Bush tax cuts. Just the ones on the "rich", which aren't worth that much |
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EasyEd
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Post by EasyEd on Aug 16, 2011 13:06:16 GMT -5
But she quotes some interesting statistics - but hides behind the statistics. Using her numbers - and including all taxes, not just income taxes, but payroll and state and local taxes - she says (once I unravel her statistics) that, on average, the lowest fifth household (in income) pay $726 a year in taxes, the middle fifth pay $9,030 in taxes and the upper fifth pay $66,175. Of course these are themselves only averages but they say that households, each enjoying the same benefits of national security, courts, police protection, etc., pay enormously different amounts to procure those benefits. I'm not saying they should pay the same amounts but at least let's deal in numbers rather than statistics. www.washingtonpost.com/opinions/rick-perrys-warped-tax-injustice/2011/08/15/gIQAvzwPHJ_story.html?wpisrc=nl_opinionsSomething tells me EasyEd loves RBIs (vs WAR, OPS, ISO, FIP, etc) You'll have to enlighten this old guy as to what the heck you are talking about. |
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hoyainspirit
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Post by hoyainspirit on Aug 16, 2011 13:39:52 GMT -5
Spending is the problem, not taxing. Correction. Spending and (the lack of) taxing of the wealthy are both problems. |
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TBird41
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Post by TBird41 on Aug 16, 2011 17:06:08 GMT -5
Spending is the problem, not taxing. Correction. Spending and (the lack of) taxing of the wealthy are both problems. Correction. Spending and (the lack of) revenue (due to lack of growth due to uncertainty and too much regulation) are both problems |
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hoyainspirit
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Post by hoyainspirit on Aug 17, 2011 12:19:48 GMT -5
Correction. Spending and (the lack of) revenue (due to lack of growth due to uncertainty and too much regulation) are both problems BP and AIG certainly agree with you, though I don't. |
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kchoya
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Post by kchoya on Aug 20, 2011 13:42:50 GMT -5
Except that most of the rich aren't in a situation like Buffett where they take only nominal salaries (nominal in terms of his position), lead a modest existence, and have very little in terms of capital gains. Buffett is the outlier. The Bush tax cuts were worth what - 3 trillion over ten years? Here's how much we can get from the super rich: www.cnsnews.com/news/article/warren-buffett-s-tax-solution-won-t-solvBut no one wants to rescind all of the Bush tax cuts. Just the ones on the "rich", which aren't worth that much |
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Buckets
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Post by Buckets on Nov 17, 2011 13:19:53 GMT -5
This is going well.
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