Buffet says raise taxes for rich.

[wanamingo]

Interesting advice from the third richest man in America. He pays an amzingly low amount of taxes considering he has an estimate 47,000,000,000$ tucked in his mattress.

To quote him from the article:

"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,"

http://abcnews.go.com/Politics/warren-buffett-raise-taxes-wealthy-friends/story?id=14307993

 

[badge]

"My friends and I have been coddled long enough"

Some people claim that there's a woman to blame

But I know it's my own damn fault.

[flash=425,349]http://www.youtube.com/v/ue2-ZVxpVjc?version=3&hl=en_US[/flash]

 

[badge]

Plus Jimmy is just another 'cause of the debt crisis' billionaire. Or anyone making $250 thousand as Obamam refers to billionaires. I like his song. It has paid a lot of dividends over the years

 

[Gulli]

Plus Jimmy is just another 'cause of the debt crisis' billionaire. Or anyone making $250 thousand as Obamam refers to billionaires. I like his song. It has paid a lot of dividends over the years

Most people making over $250.000 would be millionaires I assume: if you live off $50.000 a year you'll be a millionaire in 5 years with a $250.000 income. So Obama was right to call them rich. Only about 2% of Americans make more than $250.000 according to the IRS (although if you were to believe the republicans every shopowner on every streetcorner makes makes this amount).

 

[badge]

Your ignorance is pure entertainment, Gulli, it truly is!! :lol:

I make this much.

 

[wanamingo]

If I never had to worry about money again.......sigh.

Heating is damn expensive in the northeast. Money always gets so tight in the winter.I only make about 25,000 after taxes a year.....But I have no debt. For the record I have no problem paying more in taxes if they are used responsibly.

Its hard talking about how much is enough when you always been wealthy (Most politicians).

 

[badge]

Heating is damn expensive in the northeast. Money always gets so tight in the winter. If I made I only make about 25,000 after taxes a year

I grew up in the midwest in a three room house with dirt floors, no heat. We turned the oven on and opened the door for heat. When people visited they asked if there was any way they could help. Like do we need food or anything, anyway they could help us. I didn't know what they were talking about. I wondered if they needed anything like a brain. My father came from a family of thirteen during the depression. My mother a family of eight. I worked in high school for $1.60 an hour after school. Worked over the summers too. I still have my check stubs where I was making a buck sixty an hour. I can scan one and post it for you. You can feel jus like like Jimmy Buffet that way. If Buffet gave all his money He owned, it wouldn't begin to make a dent in the record nearly five trillion the captain of the Titanic has run up in two and a half years.

 

[cburke82]

If you read the whole of what he says Buffet is saying there should be 2 more tax brackets. He is not talking about $250,000 and up. He is saying there should be another bracket for people making $1,000,000 and up and yet another for people making $10,000,000 and up. So basically he is only talking about the rich. There is no way to throw someone who is making $1,000,000 a year in the "mom and pop" business category.

Now I will say that any tax increase is BS if they are just going to spend it on crap we dont want/need like giving the government pay raises and starting wars we have no business starting or giving welfare to lazy people for that matter. BUT Buffet does have a point and one thing he says in that interview is that as a percentage he pays less taxes than his secretary. To me that is a strong argument for a flat tax BUT you also have to consider the following.

A flat tax of say 10% could possibly hurt some small business in this way. If your a new business or a struggling business and your total income after business expenses is $40-50k that $4000-5000 tax bill could put a hurt on you. Wile Someone like Buffet who make (I have no idea how much BUT lets estimate???) say $100,000,000 a year pays there $10,000,000 tax bill and still has $90,000,000 left.

Now Im all for making as much money as you can and spending it on what you like and not giving a huge amount over to the government but there is no way around taxes so we really need to come up with a tax system that makes it fare for everybody. Im not sure what that is lol. But Having people who will never need to have a single money worry pay a lower percentage sure does not sound fare to me.

We need to address the problem on both side not just one or the other. We need to make sure the taxes that we do pay are going to the propper places and not being squandered and we also need to make sure that whatever ammont that any person is taxed is a fare amount and not the product of loop holes and tax breaks to any one group rich and poor included.

 

[cburke82]

I've said it before and I will say it again.

Nothing is stopping old Warren from paying more taxes if he really wanted to. Hell, he could give up just half of his net worth and give everyone in the United States around $115 bucks! Be still my heart!

I could eat a nice steak dinner, drink some aged bourbon, and smoke a nice cohiba with that. It will be as if I was one of them even!

When billionaires start talking about raising taxes they are talking about destroying the middle class. Not taxing themselves.

So some one making $1mill or $10mill a year is middle class? Thats what he is talking about , creating those 2 tax brackets and raising the taxes to those people. I would like to here his idea in a bit more detail as in how much he would think is a good amount for those 2 brackets to pay.....

 

[mf2780]

I feel adding taxes onto the rich is not the best way to deal with the debt our country faces. They need to find and do away with all the tax loopholes first.

 

[cburke82]

I feel adding taxes onto the rich is not the best way to deal with the debt our country faces. They need to find and do away with all the tax loopholes first.

Getting rid of loop holes in a lot of cases would mostly raise the tax rate of the higher income people..... There arnt to many $30-50 k a year people enjoying many loop holes. One think that I just thought of that needs to stop asap isfat returns for people who never paid any taxes. I have a friend who is a single mom who is a 1099 independent contractor for a catering company so she pays $.00 in taxes by year end. When she claims her child at tax time she ends up with about a $1000 refund. Now Im not sure she should pay much in the way of taxes if she is close to the poverty live and raising a child by her self but I also dont see why she gets a return when she has not paid any taxes at all.

 

[cburke82]

Tax loopholes are tax law. The mortgage interest deduction is prime example.

Perhaps you have not experienced this particular loophole before?

No I have not lol. Im by no means a tax expert I use turbo tax for god so yeah. But I can see a few areas where the law is not fare as in my example I stated in my last post. Just seems like some people pay to much other to little and most of what does get paid out is used in ways that dont make any sense.

 

[mf2780]

The problem with tax loopholes is a lot of the rich are paying a ton of taxes, while others are using loopholes and paying next to nothing. That is what needs to be fixed first. Also the government waste a ton of tax payers money because there seems to be no accountablility. Fix wasteful spending and fix people abusing the tax loopholes. Than there is a good chance we can reduce taxes across the board.

Yes the tax system is so messed up atm that its totally broken. When I was working full time and making a decent salary I paid in a ton of taxes and had to play with my 401k to not owe more at the end of the year. Last year while In school I only worked a few weeks (taking around 18-23 credit hours so not working) and got back more than 3 times what I paid in. Hell I got a bigger tax refund than I did working for those two weeks.

 

[Twoboxer]

Loophole #1: Every taxpayer gets the same deduction for cash donations, ie, they are subtracted from your total income so it's as if you never earned the money. Had you ket (eg) the $1, you would (mayne) have paid some taxes on it. So your loss for donating is something less than $1.

However, property (and stock, etc) donations work a bit differently. Whatever you paid for the stock or property doesn't matter, you get to deduct its current market value.

Why is that a loophole? Ted Turner bought an island in South Carolina for chump change about 30 years ago. 20 years ago he donated it to the state as a preserve. The value of the property was based on "appraisals" which put it over $20 miilion. He got to deduct that from income . . . without ever having paid any tax on the gain. This deduction was worth far more than the <$1 million he paid for this undevelopable island.

Loophole #2: Income on Municipal Bonds is Federal tax free, and state tax exempt if the Municipality is within your tax state. States take advantage of this, knowing that people in the top tax bracket can accept a 40% lower rate of return - or even less, depending on the State - and a Municipal Bond will still be attractive. So the rich can get higher after-tax returns through Munis than through other "safe" investments.

This may be a loophole, but usually its the rich who invest in Munis, and the "people" get to borrow money to finance projects - and in some states, state employee benefits lol - at a much lower interest rate.

The first loophole should probably be closed . . . but it *will* reduce charitable donations significantly. The second loophole should probably not be closed, because it will cost us all a lot more money through higher interest rates.

Tax law is complicated, as even these two simple examples show. And every change has unintended consequences.

 

[jsc]

Tax law is so complicated that the truly wealthy can afford to pay a horde of accountants to look for loopholes, err, closely examine existing tax laws.

 

[dalauder]

Tax law is pretty screwed up. I think they should just settle all the complaints by giving everyone a flat tax. I'm "middle class" and I think it might hurt me, but you really can't argue that a flat tax isn't fair.

And set all loopholes to expire in 2015--when tax shifts to the flat tax with no special rules and it's that simple. Then the government gets to layoff 80% of IRS employees because nobody's confused anymore.

It'll screw over non-profits...since less people/corporations will donate to save money but I think non-profits should be the first to get screwed when the economy goes down the toilet (I donate a lot, btw).

A whole lot of government systems/organizations need to be gutted and simplified to something that actually works effectively. That's not gonna happen, but it would be nice.

 

[Twoboxer]

Unfortunately, the tax code is neither the problem nor the solution to what ails us. We've got structural problems with the economy, and with the so-called entitlement programs. And while there's certainly room to argue that some people should pay more income taxes, no reasonable tax increases can possibly provide enough revenue to eliminate the current annual deficit, let alone the staggering unfunded future liabilities of Social Security, Medicare, and - yes - Obamacare.

We no longer manufacture very much, and since the world is flat most workers are or shortly will be competing with everyone else in the world.

People talk about the large gap between rich and poor in this country, but fail to recognize the HUGE gap between the poor in this country and and the poor in other countries. Again, since the world is now flat, that huge supply of competitive workers around the world will cause a continued hemorrhaging of jobs from the US. Unions cannot save those jobs.

Even Conservatives should read Tom Friedman's "The World is Flat 3.0". He's a "Progressive", but he does a great job of showing the problems in simple terms, and poses some surprising answers . . . considering the source lol. It's a great book if you're interested in a better understanding of what we face.

 

[dalauder]

Attack the entitlement programs? I don't think that will fix the economy outright either. But sure, cut them so long as you don't cut Planned Parenthood. Because I doubt you want the poor reproducing faster. That won't help anyone.

If you want to cut medical expenses, I suggest you go at the root of the problem though--not merely abolishing medical coverage for the non-wealthy. Medical care needs a legitimate reform. Obama's plan to reform it failed (well, in 95% of it's purpose anyhow).

But just as entitlement could use cutting--the U.S. probably doesn't need to build more $10B aircraft carriers when we've already got more ships in the water than the rest of the world combined--especially when I can't even tell you what a ship is good for in a war anymore. If you're not island hopping the Pacific losing thousands of soldiers for worthless islands, a HUGE naval fleet is a waste.

U.S. Unions need arbitration and busting in many areas. Now they should not lose collective bargaining rights, but many businesses (manufacturing especially, like the Auto Industry) cannot be profitable with the ridiculous concessions they've made to unions. Employers should provide safe working conditions, a lunch hour, and some minimal amount of time off. Anything beyond that should be on the negotiating table.

I guess I'm not very sympathetic to the "poor". My family members who are poor and on welfare earned their lot in life. They spend the many of their years not working and on welfare or trying to sue someone. Does anyone have an example of someone they know who's poor enough so they struggle to make end's meet who just had bad luck? Most I've known had drug problems or never actually attempted to succeed [legally]. And ALL the poor people I know have a nicer TV than I do and better video game systems too.

I am sympathetic to poor in other countries who actually are malnourished--and not because of deficiencies in the nutritional value of McDonald's.


Anyhow...there's a lot to fix. Not much of it will get fixed. But at least the government will have a LOT more money once we wrap up some of these expensive wars.

So long as someone like Michelle Bachman doesn't end up President and start another "Crusade-type" holy war, things will get better. I can guarantee you we wouldn't have been in Iraq if it was a Catholic Nation (Notice Hugo Chavez is still in power--and Venezuela has oil too!).

 

[cburke82]

Attack the entitlement programs? I don't think that will fix the economy outright either. But sure, cut them so long as you don't cut Planned Parenthood. Because I doubt you want the poor reproducing faster. That won't help anyone.

If you want to cut medical expenses, I suggest you go at the root of the problem though--not merely abolishing medical coverage for the non-wealthy. Medical care needs a legitimate reform. Obama's plan to reform it failed (well, in 95% of it's purpose anyhow).

But just as entitlement could use cutting--the U.S. probably doesn't need to build more $10B aircraft carriers when we've already got more ships in the water than the rest of the world combined--especially when I can't even tell you what a ship is good for in a war anymore. If you're not island hopping the Pacific losing thousands of soldiers for worthless islands, a HUGE naval fleet is a waste.

U.S. Unions need arbitration and busting in many areas. Now they should not lose collective bargaining rights, but many businesses (manufacturing especially, like the Auto Industry) cannot be profitable with the ridiculous concessions they've made to unions. Employers should provide safe working conditions, a lunch hour, and some minimal amount of time off. Anything beyond that should be on the negotiating table.

I guess I'm not very sympathetic to the "poor". My family members who are poor and on welfare earned their lot in life. They spend the many of their years not working and on welfare or trying to sue someone. Does anyone have an example of someone they know who's poor enough so they struggle to make end's meet who just had bad luck? Most I've known had drug problems or never actually attempted to succeed [legally]. And ALL the poor people I know have a nicer TV than I do and better video game systems too.

I am sympathetic to poor in other countries who actually are malnourished--and not because of deficiencies in the nutritional value of McDonald's.


Anyhow...there's a lot to fix. Not much of it will get fixed. But at least the government will have a LOT more money once we wrap up some of these expensive wars.

So long as someone like Michelle Bachman doesn't end up President and start another "Crusade-type" holy war, things will get better. I can guarantee you we wouldn't have been in Iraq if it was a Catholic Nation (Notice Hugo Chavez is still in power--and Venezuela has oil too!).

I agree that being involved in two wars that we dont need is not cool for our budget and we really should pull out now with the least ammount of troops left there to keep order. One administration made the mistake of starting that process and now the next one is also making a mistake by staying there so long, Didnt GWB declare that we won that war in Iraq like 10 years ago lol.

I think a flat tax with a poverty line would be good. Basicly everybody pays 10% unless you make below a set amount per year then you dont pay BUT you also dont get any crazy refunds. I say this because I dont think a collage student working there way through school that has a part time job making 10k per year should have to pay $1000 worth of taxes as that would be hurtful to them. So if you make $60k you pay $6k make $100 billion you pay $10 billion and then you do this... Any lage surplus has to be used in a way that improves the country or given back to the people. So if they end up with a $30000000000 surplus somehow they cant spend it on a war or going in to save some country from them selves but it could be used for new schools or invested in our country by way of scholarships. Stuff like that that will have an end effect of improving our country and the people as well. I fee for other less fortunate country's but If we have this huge deficit in our spending and we are cutting funding to schools and cops and important things like that, then we dont need to spend $0.01 on Libya or Iraq or any other country until we are in a much better state ourselves.

 

[Gulli]

I agree that being involved in two wars that we dont need is not cool for our budget and we really should pull out now with the least ammount of troops left there to keep order. One administration made the mistake of starting that process and now the next one is also making a mistake by staying there so long, Didnt GWB declare that we won that war in Iraq like 10 years ago lol.

I think a flat tax with a poverty line would be good. Basicly everybody pays 10% unless you make below a set amount per year then you dont pay BUT you also dont get any crazy refunds. I say this because I dont think a collage student working there way through school that has a part time job making 10k per year should have to pay $1000 worth of taxes as that would be hurtful to them. So if you make $60k you pay $6k make $100 billion you pay $10 billion and then you do this... Any lage surplus has to be used in a way that improves the country or given back to the people. So if they end up with a $30000000000 surplus somehow they cant spend it on a war or going in to save some country from them selves but it could be used for new schools or invested in our country by way of scholarships. Stuff like that that will have an end effect of improving our country and the people as well. I fee for other less fortunate country's but If we have this huge deficit in our spending and we are cutting funding to schools and cops and important things like that, then we dont need to spend $0.01 on Libya or Iraq or any other country until we are in a much better state ourselves.

10% won't cut it, that might generate maybe 1/3 of the current budget. That's the problem with a flat tax: you'll have to tax the sh*t out of the middle class and the poor to make it work, although it would really help if the rich really paid all the taxes they're supposed too on all of their income, not just salary/bonuses but also dividents, etc... and no Swiss bank accounts either.

 

[Twoboxer]

The "Alternative Minimum Tax" was installed to force "millionaires" to pay their taxes. It uses a flat rate of 28% and eliminates many deductions.

Unfortunately, the threshhold income was never indexed, and now many who are middle class are subject to that rate. Doubly unfortunate, apparently dividends and Muni income are not included in the calculation, otherwise good ol' Warren would be paying FAR more than 17% overall.

Just shows Congress doesn't know wtf it's doing.

FYI, last tax season I did a return for someone with AGI of ~$350k. When we went back and added up all of the readily identifiable taxes he paid during the year, he spent 54% of his income on taxes . . . Fed & State income, FICA & Medicare (not including what his employer paid on $108,000 max) personal income tax, property tax on 2 houses, etc.

People don't realize that its not just income tax. A lot of Federal mandated spending is taxed and done at the state level now. Which is why property taxes have skyrocketed while municipalities no longer collect garbage, sweep streets, provide sewer and water, have full time fire departments . . . like the used to. Citizens now pay for all of that separately, a hidden tax increase of significant size.

 

[autoboy]

Buffet pays less of a % of his income than his secretary because his gains are all long term capital gains which are taxed at 20% no matter how much you make. It IS a flat tax on capital gains. Raising capital gains tax would have a severe impact on the US stock market. It would also be political suicide to raise it because any loss in market value for years could be directly blamed on the President, regardless of what actually caused that particular downturn.

The problem is that an income tax is a tax on productivity. Those that produce more are taxed more. That's backwards IMO. I'd like to move to a consumption tax which is basically a national sales tax on certain goods and services with the highest tax on luxury goods. A consumption tax would promote investment and would increase the value of used goods. IMO, we as a country spend way too much on stuff that we end up just throwing away after a couple years even though they are perfectly workable products.

 

[cburke82]

10% won't cut it, that might generate maybe 1/3 of the current budget. That's the problem with a flat tax: you'll have to tax the sh*t out of the middle class and the poor to make it work, although it would really help if the rich really paid all the taxes they're supposed too on all of their income, not just salary/bonuses but also dividents, etc... and no Swiss bank accounts either.

The point is you would combine a flat tax wile also cutting spending in areas where its not required. Also I was just using 10% as a nice round number. I dont know what % it would take to give the government a reasonable budget to work with. I would say no matter what your political alliance the fact that there is a huge gap developing between the rich and poor and the fact that the middle class is shrinking should be of concern. As far as how you fix that its hard to say. There is really no way for the government to force a company to hire workers here for a middle class wage. They could spend more money on making it easy for people who want to go to school be able to do so. If your not from a well off family or extreamly smart so that you get a full ride scholarship it can be hard to get a good education past high school.

I was watching somthing on cnn and I wish I remember who was talking about it but he was talking about how the government would have been better off in the long run spending all that stimulus money paying for people to go to collage, not just new students but also people who have an education in a job sector that is diminishing as well. Thats the short version he explained it in much better detail but it made a lot of sense.

 

[cburke82]

Buffet pays less of a % of his income than his secretary because his gains are all long term capital gains which are taxed at 20% no matter how much you make. It IS a flat tax on capital gains. Raising capital gains tax would have a severe impact on the US stock market. It would also be political suicide to raise it because any loss in market value for years could be directly blamed on the President, regardless of what actually caused that particular downturn.

The problem is that an income tax is a tax on productivity. Those that produce more are taxed more. That's backwards IMO. I'd like to move to a consumption tax which is basically a national sales tax on certain goods and services with the highest tax on luxury goods. A consumption tax would promote investment and would increase the value of used goods. IMO, we as a country spend way too much on stuff that we end up just throwing away after a couple years even though they are perfectly workable products.

Consumption tax is also a nice Idea but I dont think the government will ever go for that. They would have no way of making sure they got a certain amount of money lol. There are pluses and minus with anything like this. You could say that taxing spending would reduce spending as a side effect that would then cause business to make less and possibly pay less or not hire the same amount of employees. What buffet was saying about adding 2 new brackets to the people who make over $1mill per year made sense. He is right in saying that it would not make sense for someone with that much income to shy away from investing based on a higher tax rate. In other words would you rater invest $500,000 and make a 8% return and then pay an extra % of that gain in the form of a tax OR just park that $500,000 in the bank and let inflation eat at it and gain nothing.

Personally I believe that somebody like Buffet knows more about what raising taxes will do to the economy than any senator or congressman will ever know. Lets not forget that he makes all his money in the stock market and has been one of the most successful investors of our time. So if raising taxes in the manner he is suggesting would end up in an overall loss to the stock market why would he even bring up that subject?

 

[Twoboxer]

. . . What buffet was saying about adding 2 new brackets to the people who make over $1mill per year made sense. . . . Personally I believe that somebody like Buffet knows more about what raising taxes will do to the economy than any senator or congressman will ever know.

Agreed. But let's keep in mind that what Buffet proposes is vastly different from what Obama proposes. Obama uses words like "millionaires and billionaires" while meaning $250k+/yr . . . and IMO he really intends to reach down lower. Buffet is talking $1mm+/yr. Buffet's suggestion is way out of "small business" territory.