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 He thinks it would be great if everyone had an unlimited IRA, and were only taxed when the money was withdrawn.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.
Dont worry, there is helpful info there indeed. As I may have not made clear before, I am not a fan in any way of more taxing on anyone. I’d sooner have my tonsils, wisdom teeth and appendix removed the medieval ways before advocating more taxes on anyone. The point was the need to develop arguments to deal with the mentality of taxing more “rotten rich kids “ (yeah it was meant to be facetious, probably should have included the /s tag) will bring more prosperity to the rest of Americans. We need to have a debater’s guide when it comes to raising taxes, taxing the richest, hell anything regarding taxes in general. And so we can be prepared to effectively argue that the solution to the crisis is never a matter of exhorting more tax dollars from people, (regardless of wealth).