Washington Post: Taxing the rich fairly can be done — and would raise revenue

Washington Post ^ | 08/23/2011

[SeekAndFind]

IT HAS BEEN a little over a week since billionaire Warren Buffett called for higher taxes on the richest Americans, and now comes the reaction. Harvey Golub, a former chairman and chief executive of American Express, writes in the Wall Street Journal that he “resents” Mr. Buffett’s suggestion. I already pay plenty of taxes, Mr. Golub asserts, adding: “Before you ‘ask’ for more tax money from me and others, raise the $2.2 trillion you already collect each year more fairly and spend it more wisely.”

Who’s right? Mr. Golub points out that almost half of the population pays no income tax, and that the very top earners — 250,000 Americans who make $1 million or more per year — already pay 20 percent of the total. State income taxes are often quite high, especially in places where the rich cluster, such as New York, New Jersey and California — yet, notes Mr. Golub, Mr. Buffett doesn’t factor that in. The current code is “replete with favors to various interest groups and industries,” as Mr. Golub puts it, from the mortgage-interest deduction to the exemption for employer-paid health benefits. On top of that, the government wastes a lot of money on farm subsidies and duplicative job-training programs.

All true. But this doesn’t really refute Mr. Buffett, whose main argument — that the burden of deficit-reduction should fall most heavily on the well-to-do — Mr. Golub doesn’t dispute. Mr. Buffett acknowledged that higher taxes on the very rich should be part of a deficit-cutting package that also tackles excessive entitlement spending. Unlike Mr. Golub, he noted that lower-income people who don’t pay income taxes do pay substantial payroll taxes, which are less progressive.

More to the point, there’s no contradiction between Mr. Golub’s attack on tax expenditures and Mr. Buffett’s lament,

[SeekAndFind]

WA PO makes the following disclosure at the top of the article:

Clarification: We should have noted, for disclosure purposes, that Berkshire Hathaway, which Mr. Buffett heads, owns a substantial minority stake in The Washington Post Co. and that Mr. Buffett is a former longtime member of the company’s board of directors.

[facedown]

Gibberish.

[Williams]

1 I have no desire for the wealthy to take their money out of the private economy and give it to the government.

2 Just wondering, can the poor be taxed “fairly”? It astounds me we talk about paying a fair share when 50% pay nothing.

[emax]

Well if it could work then it could create problems for the “anti tax” crowd, if which i am proudly a member. Whose really gonna object to a system where the richest 1 % of Americans get higher taxes and the resulting revenue being used to eliminate debt and give more $$ to health care, education, research funding-NSF grants and what not-and other sources ? Now, I would love taxes as low as possible for everyone in our nation, but how do you convince the other 99 % of Americans that a plan to effectively increase taxes for the top 1 % is a bad thing ?

[10thAmendmentGuy]

Mr. Buffett — like other ultra-rich people who get much of their income from investments — achieves that low rate thanks in part to one of the tax code’s most special favors: The 20-percentage-point gap between the top rate for ordinary income, which is 35 percent, and for capital gains, which is 15 percent.

The reason that investment gains are taxed at a lower rate is because we want to encourage people to invest in the companies that will build the economy. If we were serious about economic growth, we would cut the LTCG rate to 0%, and cut the top marginal income tax rate to 20%, while cutting a whole lot of spending.

[sappy]

next up. homeless to begin hiring. cause, hey, they’ve not nothing else to do.

[SWAMPSNIPER]

"Taxing the rich fairly can be done — and would raise revenue".

Thing is increasing taxes will only trigger increased spending, the liberals don't want to get the economy under control, they just want more to spend.

All the "fairness" rhetoric is just so much bullshat!

[Yaelle]

Fair = tax everybody. Don’t pay the working poor to not pay taxes.

[Raycpa]

Taxing the rich is merely getting an advance on the death tax. In the long run its going to cost us more. We are long term investors in the assets of the wealthy because of the estate taxes.

If we draw down our share of their wealth now we are reducing our long term investment return. If we assume the wealthy are going to achieve a greater return than the borrowing costs of our debt then long-term we have made a bad financial deal.

[ken21]

let’s raise taxes on those who voted for obama.

[Iron Munro]

Just wondering, can the poor be taxed “fairly”?
It astounds me we talk about paying a fair share when 50% pay nothing.

[VRWCmember]

All true. But this doesn’t really refute Mr. Buffett, whose main argument — that the burden of deficit-reduction should fall most heavily on the well-to-do — Mr. Golub doesn’t dispute.

No, the burden of deficit-reduction should fall most heavily on those spending the money in the first place. The problem isn't insufficient revenue. The problem is massively excessive spending.

[Raycpa]

Whose really gonna object to a system where the richest 1 % of Americans get higher taxes and the resulting revenue being used to eliminate debt

When has giving money to an addict ever gone to eliminate the addicts debts? Most rational folks realize that any additional tax revenue is not ever going to reduce the debt. Its just going to be spent.

Give an alcoholic or a gambler or a drug addict money to get them back on their feet before they recognize they have a problem and they are dealing with it is never going to help.

Give this current group of politicians the total income of even the top 25% of all Americans and this group will find reasons to spend it and never use one dime to reduce the debt.

[Osage Orange]

Who is going to spend the money wisely?

Is government going to risk the money in a business to make more money...thus providing jobs?

Or is government going to give that money away...to people they think will vote for them...in the next election?

[Spok]

The rich don’t have enough money to cover the cost of Obama’s vision of America. And there’s no guarantee that Obama or Congress won’t out spend revenue, reagrdless of how much money is brought in. When hundreds of millions and even billions are vanishing and can’t be accounted for, it’s clear that the government’s thirst for wealth cannot be quenched.

[Osage Orange]

Give this current group of politicians the total income of even the top 25% of all Americans and this group will find reasons to spend it and never use one dime to reduce the debt.

Not even their total income...but their entire assets!!

[basil]

How many years did we kick around the idea of a “fair tax”? As I understood that, everyone paid the same percentage of their income—whatever it was.

That still seems to me to be the most equitable/efficient way of taxing the population. No long forms to file, no deductions, no lawyers, just pay a percentage of your income that everyone else pays.

This would still be taxing the rich more, as the more you earn, the more you pay, but you pay the same percentage as everyone else.

[ilgipper]

the additional taxes will do no such thing. Debt will not go down. The deficit will not go down. Taking more money from people already paying the bulk of the tax bill is just going to lead to more freebies and handouts, and less money in the private sector. Less jobs, less investment, less purchasing.

If the government was cut to the point where we had a balanced budget, then we can talk about tactics to reduce the trillions of dollar of debt....possibly through taxation changes. Until then, no one serious can even talk about tax rate increases.

[dila813]

There shouldn’t be a deficit in the first place, there shouldn’t be a discussion on who shoulders the deficit because it is an abhorrent abuse of power

[emax]

Fair enough. But that could be turned around to argue that getting more $$ from the richest 1 % through higher taxes can also be used for other invaluable purposes as well, not solely to help drug and alcohol addicts who dont really want to be helped.

They can argue that the extra revenue can go towards building up Medicare, funding health care, funding universities for research through higher NSF grants and other sources, and of course more funding for public schools. Even we could agree that more funding for public high schools is completely pointless, what about the other uses for the added revenue ?

To reiterate, I am as anti tax as any FR member here but it would certainly help to be able to come up with the most effective counter arguments to those to believe taxing the richest 1 % -who after all, really dont need or deserve to have that kind of obscene wealth anyway-should be used to fix all kinds of financial crisis we have. It sounds so appealing to so many people who arent rotten rich kids, and so more strong counter arguments are needed.