Posted on 08/24/2011 2:38:56 PM PDT by 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,
(Excerpt) Read more at washingtonpost.com ...
What is left out about this one-sided comment is that "Capital Gains" comes from investments into business that is already paying federal tax on THEIR profits, thus (yes there are tax loopholes and exceptions) this income has already been taxed once already!
Me personally, I prefer total replacement by consumption taxes that will capture the more of the underground economy. Before the inter-connected economy, this was impractical but now I would like it IF WE CAN KEEP THE IDIOTS from retaining the IRS and the income tax. [Fat chance! Unfortunately!]
The problem with “spending” is that it is too vague...
Meaning, Government workers, despite how necessary are “spending” be it a cop, teacher or middle manager at the EPA.
Our immigrants come here, legally or illegally, and start draining systems they never paid into...anchor babies, refugees, asylum seekers...chain migration...are all people who are are in the red, then we pay Governement workers, for life, to hand out other people’s earnings...
End Social Security now, anyone under 55 gets to privatize their money. Put in, take out...the system has too many takers.
(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)
Euh, the WAPO misses Golub’s main argument, which is that government could fix its deficit problem by not doing things it shouldn’t do, and being more efficient at the things that it has to do.
No kidding. I feel dumber for having read the excerpt. I didn’t go on to the article itself.
Seems to me that the 50% of workers who don’t pay federal income taxes and the 100% of non-workers who pay no taxes at all have zero skin in the game. Rather than letting the non-payers exert their voting majority to force more government support for themselves, I’d like to see no voting rights for anyone who does not pay income taxes. How’s that for fairness?
Thanks! I’ve always gotten the two confused. You have given an excellent definition of each. I appreciate that.
Most of Buffett’s wealth exists because it was never taxed at all. He has owned his shares in Bershire Hathaway for his entire working life. Taxes on cap gains don’t occur until the gains are realized and become taxable. This is true for all company owners. Saying that they get a special tax break (15% on cap gains) is just stupid. They have not received the capital gains as income and have not paid any taxes.
Barry wants money from the rich for the same reason that the IRS does - that is where the money is. Not much point in taxing the poor!
Just try raising the taxes on them and watch the collapse of jobs; that should be convincing. Remember the tax on luxury yachts? Destroyed thousands of jobs as the "rich" simply bought or leased overseas?
Your comments (newbie) sound like you're trolling. And you use of "...the “anti tax” crowd, if which i am proudly a member" is a dead giveaway.
You define the rich with words such as obscene & rotten rich kids? Do you realize this is all the “media” really shows you? I am mildly rich in my area and I do mean mildly. I know some people you would consider obscenely rich. We as a whole give more to churches, charities and to our communities then is stolen in the name of tax revenue. As conservatives we will never be recognized for this and don’t really care. We care about the people who are helped and nothing more. Our children are taught to work for what they want and do not in any way resemble Paris Hilton and the Hollywood elite that the media props up as examples.
If they want to make sure the rich pay more, illegals and others earning illicit income pay their fair share, it would make more sense to tax consumption (maybe a national sales tax).
God only asks for 10%, why does the government deserve more?
The IRS tables show that the top 25% of wage earners pay 97.3% of all income taxes in 2008. There are some conservative foundations that have crunched the numbers that disprove this meme that rich don't pay their fair share of taxes using income and other taxes.
I am sure you have read that there are not enough rich people to have much of an impact even if we took 100% of their earnings.
Furthermore, every time they have implemented a tax on the “wealthy” or “tax reform” people in the 0 to 28% get hit pretty hard. I read that if the Bush tax cuts expire there are some lower income people who will get a 50% increase in their taxes, and the wealthy will not be hit that hard % wise.
Even if they stick to $250,000, current monetary policy is likely going to lead to double digit inflation. Next thing you know Mr. and Mrs. low and middle income are inflated into the higher brackets.
Buffet is playing loose with the truth. His company paid 29% in taxes for 2010. Whatever distributions he received would pay an additional 15% which totals 44%(not just the 15% he claimed). He would owe additional taxes on his $175,000 salary and director fees. I could not find out info about his other benefits.
In addition to ignoring part of the taxes he pays (corporate tax), he inflates what his employees pay. In a 2007 interview he stated that his employees paid 15% payroll taxes, and averaged a total of around 30% in taxes vs his 15%.
This is incorrect, because the employer pays half of this tax. Also, Social Security is actually a premium paid for old age insurance (they only used the term tax to make it constitutional). Same with Medicare, premiums paid today for future benefits. Many people get out more than they put in.
In his 2007 interview he stated that the best tax would be on consumption (not sales tax though). He thinks it would be great if everyone had an unlimited IRA, and were only taxed when the money was withdrawn. Any surprise that would be very helpful for his bottom-line?
With respect to the death tax (all the money accumulated has already been taxed), he is not opposed to that raising, because the insurance companies he owns benefit from people using estate planning services and the sale of life insurance to fund family limited partnerships and avoid the death tax. Buffet himself plans to avoid this tax through charitable gifts.
Now to capital gains. Buffet states that it wouldn't hurt if capital gains taxes were more. Higher capital gains taxes would encourage long-term holding of stocks which benefits his companies, but for people looking for start up capital investors a higher rate could mean the deal doesn't happen.
Capital gains taxes are not indexed to inflation. What if you built a “spec” house for sale, wound up renting it out for 10 years and then sold it for a “profit”. While renting it, your basis is lowered using depreciation.
The profit during the year of the sale is subject to 15% capital gains tax on the difference between the sale price minus your basis. If you adjusted your basis for inflation, part of the money you get is just the return of capital due to appreciation (a phantom profit you have to pay tax on).
Currently, most people only pay 15% capital gains except for the lower income who pay 10%. Americans who own stocks whether through their IRAs, 401k, or individual holdings all benefit from the lower capital gains rate.
No one is suggesting a tax on wealth, and if you really want to tax the rich, that could work, except they just take it overseas. If you raise income taxes, the wealthy don't care, because they have their income from capital gains or dividends.
If you raise taxes on dividends and capitla gains you hurt old people relying on dividends for income, and young people trying to save for retirement, college for kids, or their first house.
If you raise the death tax, people just set up charitable trusts, but the family owned business has to be sold or the heirs have to go into debt to pay the taxes.
I personally don't believe there is any way to tax the rich with out also taxing or harming someone else with lesser means. All this talk about who to tax and who is not paying enough is just a red herring to keep people from focusing on the real problem which is reducing the size of government, stopping wasteful spending, and enacting entitlement reform.
Repeat at every opportunity: All Americans are taxed enough already. Stop the spending, stop the spending, stop the spending!Hope there is something in this long winded post you can use. LOL.
“Must be nice for Warren Buffet, he’s wealthy enough that he can afford to be a socialist.”
If Buffett has the courage of his convictions will he then stand in front of his wealthy Berkshire shareholders at the next annual meeting and ask them to join his socialist crusade to give more of their dividends and capital gains to the government? I doubt it.
“The Liberals and Socialists do not like upward mobility, it creates a company, which COMPETES with their end-all Government, which can never happen.”
Upward mobility also makes people more independent and less beholden to big government, and therefore less likely to vote for big spending liberals and their endless handouts. This threatens their power base, so gotta keep the money rolling in.
“I know some people you would consider obscenely rich. We as a whole give more to churches, charities and to our communities then is stolen in the name of tax revenue.”
We have some affluent friends who work on soup kitchen lines and donate their specialized skills to provide other community services. They are quite modest about it.
“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. “
Income tax revenues in every year of Obama’s reign have come in just over a trillion dollars.
Annual deficits in every year of Obama’s reign have come in just under a trillion and a half dollars.
If you DOUBLED *everybody’s* income taxes, you’d raise another trillion and change - still not enough to cover the Obama / Democrat spending sprees since the Pelosi/Reed congresses and the Obama presidency.
Repeat until it sticks - we’ve got a SPENDING PROBLEM, *NOT* a revenue problem.
Moreover, money invested has already been taxed once!
In order to be invested, it first has to be earned -- as income -- and has been taxed accordingly.
That the Washington Post never so much as mentions this fact is evidence that they are either a.) stupid or b.) duplicitous.
Presumably, the members of their editorial board aren't stupid. Which leaves only one option...
That would be the "flat tax" -- where everyody pays the same percentage of their income (without any deductions).
The "fair tax" is a national sales tax -- which would replace the income tax.
And, why, may I ask, do they not "deserve" it? And why do you care? And, even if they don't "need" it, why is that any business of yours?
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