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I don't consider myself rich - my income is way below $1 million dollars and tens of thousands below $200,000 - but I end up giving 40% of my income every year to local, state and federal taxes. I keep wondering when I read all these tax stories why the heck I'm paying so much than everyone else - above and below me on the income scale
No one speaks the truth about taxes - not least because the system is so screwed up that no one knows hoe it works - or is supposed to work.
Sydney, in general, you're probably in the sour spot: high W2 earnings (salary) with low investment income. Everyone with that description gets soaked. Poor people don't pay taxes, and rich people like Warren Buffet derive their income mostly from investments that have already been taxed once or twice.
Coming soon to a music outlet near you: Barack Obama and Warren Buffett Sing Their Greatest Hits!"Why Don't We Get Drunk And Screw The Country?""(Wasting Away Again In) Obamaville""Guns""Cheeseburger In Martha's Vineyard""Son Of A Son Of A Radical""He Went To Berlin""Come Taxday""We Are The People The Republicans Warned You About"
Plus which we would like "people like Warren Buffett" to invest their profits in something useful - which is not what is going to happen to money confiscated by the state.And in Buffett's particular case, it would be nice if he paid his taxes to start with, before he goes to complaining that he does not pay enough. Also, if he feels the "death tax" is proper, and indeed should be even higher, why is he giving his riches to Bill Gates' foundation so that so much won't have to go for taxes?Methinks something smells about this "Buffett principle." Of course, if the IRS is suing you for a billion dollars in back taxes, being known as a particular "friend of Barack" can't hurt. And in any case I understand Berkshire Hathaway makes a lot of money buying and disposing of small businesses that go belly-up, partially at least from excessive taxes and regulations that the heirs don't want to deal with.Wv: "dippo" - don't know this word, but might be descriptive of Mr. Buffett anyway.
Buffett spent decades making his fortune and his reputation as a financial seer.The latter was wiped out with one lousy pick, the former remains intact.
Obama is a liar and a con man.You cannot take a face value anything he says.End of story.
I keep wondering when I read all these tax stories why the heck I'm paying so much than everyone else - above and below me on the income scale I was pretty thrown the year a family member got married and acquired two children and suddenly made a profit of several grand on his taxes!
Zero is demonstrating some very disturbing behavior, indeed.We need to find out if he isn't looking for who may have taken his strawberries.
Zero, the poverty president, doing his best to expand big government.
@sydney -- You need some kids and a house you can't afford. I pay more in FICA than income tax.However, since any extra income I make comes from freelance work my marginal tax rate is insane. Self-employment tax is a killer.Still, the child tax credit is ridiculous overkill. The credits and loopholes have got to go.
Try making any investment income while you're low income. The passive income rules will wipe out the tax credits, and you can actually owe money to the IRS even though your income was below the poverty line.
So you are saying that the President of the United States is a liar?Trey
Oh, and they'll give you deductions for preschool if you work but not if you don't. Also, they'll give you deductions for educational expenses if you are an educator, but no deductions for you if you homeschool.
Sydney: What Bob Ellison said is spot on. You are venturing close, however, to being a millionaireandbillionaire yourself as you approach the magic millionaireandbillionaire cutoff of $200,000. Back before Obama, back in the days when we were unenlightened, a billionaire had to have 1,000 times more than a garden variety holder of one million dollars in assets. Now we learn that a millionaire is the same as a billionaire and thus the new word millionairesandbillionaires was minted. What is best about the new program is that you do not have to have or make an actual million dollars to become a millionaireandbillionaire!! You only need $200,000. See, math is easy when you think about it this way.
If you want to come to really despise taxes, start or invest in a business.
Obama is not alone, I think, in believing that regulations are inherently good, since they provide employment - on the government side in writing them and enforcing them, and on the private side in complying, or indeed, even efforts expended in non-compliance.However, this seems akin to Mark Twain's fable of the village wherein the inhabitants made a precarious living taking in each others' wash.
Try making any investment income while you're low income. They really shouldn't make you pay taxes for your first, say, 1000 bucks in investment income. You try to save a little money, and then you make a teensy bit in income from it (since interest rates are crap) and they tax that too.
This isn't about the budget..this about faux populism. And that means emotion, not facts. I think the people who decide elections see this.
Freeman Hunt, When I started my biz in 1983 it was shocking to see all the taxes and regulations. I never overcame the shock of having to pay both ends of my fica tax..15.3% right off the fucking top!
United States taxes are (when you combine in all levels of taxes) as high or higher than Western Europe, with fewer loop holes. Yet it is also a fairly complex and bizzare tax system too (hence the tax and accounting industry here). And the rich do pay more than the rest of us. With the alternative minimum tax, there are not a lot of loop holes for the rich beyond a certain point.
ndspinelli, all employees pay both ends of FICA. You think employers don't calculate their "half" into the cost of employees?The only times this isn't strictly true are right after a major withholding changes, like the original impositions of Social Security and Medicare and the recent situations when the government temporarily suspends or cuts FICA. Employers need a little time to compute such things into wages and salaries.When I ran a company, I made a point of telling the employees routinely that they were paying not 8% but about 16% in withholdings-- more than self-employed people pay.
In my experience, all the average tax rates in that WSJ table should be shifted down one line.Specifically, 12.7% on $100-200k is ridiculously low.
Fundamentally President Obama and much of the liberal/left believes that the purpose of the private sector is to provide the funds or wealth for the government to use and redistribute. In the name of fairness or social justice or equality or some other goal.That is, the state comes first and the private sector second. The economy in service to the government. It's why, for example, much of the stimulus went to state governments.Others believe that the purpose of the government is to provide the best environment for the private sector to flourish. That is, the private sector is first and the state is second or ancillary to that.Everything from that fundamentally different vision comes from that.
Buffett does pay less taxes than anybody else. With a legion of lawyers and CPAs to obstruct, obfuscate and "negotiate down" years of taxes with the IRS. Lesser mortals don't have that privilege to negotiate with the IRS, lesser mortals such as small business owners and $250,000 household earners will be sent to jail for tax evasions. Lesser mortals' small businesses will be sold at fire sale prices to cover the tax bills, lesser mortals' small businesses will be bought by Buffett, and the smalll businesses' losses will be used to write off Buffett's profits to lower his taxes to lower than his secretary's. Lesser mortals don't have 10% of at least $40 billion tax-free to leave to their heirs who, by the way, take care of his so-called "charitable" organizations to write off more taxes. And lesser mortals are not handed billions of stimulus and TARP to pay their management and directors bonuses and dividends. Lesser mortals' investment in BoA may go down the drain when the Market crashes, Buffett's preferred stocks will guarantee him 6%, taxpayers will pony up to save the too big to fail BoA guaranteeing Buffett his 6%.Hagar, the tax system is deliberately screwed up to leave loop holes for the likes of Buffett.
ic, your description of how income taxes work on rich people like Buffet is inadequate. It's a popular myth that rich folks can get around income/cap-gains taxes and estate taxes. Charitable remainder trusts don't do the job. Let's try to be honest and informed.
I get the feeling freshman math (usually, calc) and sophomore Economics are two more classes where nobody remembers ever seeing GodZero.PS sydney, you'd be surprised how big the boat you're in really is.PPS Good one, Clyde.
Bob Ellison: Buffett's genius is in his Berkshire. He pays his taxes. But he's a hypocrite to say he pays less than his secretary after gaming the system to pay less than his "fair" share. I never say charitable organizations and all that cover all their shenanigans. My complaint is his hypocrisy and special treatments. Please don't call up a straw man, or are you peddling red herrings?
Bob Ellison: Indeed, the employee pays the 15.6% FICA tax from the first dollar of income. He also pays 3% or so for Unimployment Insurance and 2% or so for Workers Comp, so he starts right out at a tax rate of over 20% from the first dollar.Buffett pays none of those taxes. I'm no Buffett, but I've paid none of those taxes either since I left my profession and just fixed up one principal residence after another and selling it for a profit after two years, upon which only long-term capital gains (15%) are due on gains over $250,000. Optimizing such activity can gain you $125,000 totally tax-free income per year for life. And you don't have to waste $200,000 on a college degree.
Urkel realizes that nearly 50% of wage earners in the US do not pay federal or in some cases state income taxes? Oh wait...
The other issue with Buffet that is often ignored is that he a) takes very little salary and b) sells relatively little stock. Point being that he already has the money he needs on hand and has little need to sell assets to get any more.
don't sell yourself short jimbino. you're just like Buffett. you advocate for others to pay more taxes while paying none yourself.
I had a small business. It's true you get screwed on the FICA end, but you also get to duck some other taxes. My small business became not so small and then, as I attracted competitors, smaller again. Still, at the very end, I was able to sell out for a decent profit, and the money was taxed on the long term capital gains schedule.... I suppose I have paid more taxes than some and less than others. I don't think that one can enforce or even conceive of a tax plan that is absolutely fair. If, in the final tally, it turns out that I have given more to the government than they have given to me, that's OK with me. The people whose lives are based on government largesse lead very hobbled lives.
Carnegie claimed that a rich man had a moral duty to die penniless. At the end, his money went to found universities, libraries, and foundations. I suppose these charities have done some good, but, nonetheless, his great contribution to civilization was supplying limitless amounts of cheap steel to the world. Beyond this, one never distrusts the ulterior motives of someone who is making a profit.....I think Buffett deserves to be taken at his word. These are his beliefs. If there is any vainglory, it is in his pursuit of moral grandeur rather than riches.
How about we close the "holding company loophole," which reduces Berkshire's tax rate on dividends it receives from its holdings. Or do I misunderstand the relevant law?Why is Buffett all of a sudden making himself a public and political figure? It might be that he's old and wants to do some good, as he sees it. But it might also be that some of the tax reforms that have been poposed would be bad for Berkshire's status, and, hence, for Buffett's wealth.
If the IRS is suing Buffett for a billion in back taxes, that is likely to be a little more than a dispute about the interpretation of some obscure rule.Winding up in court and having to "take the fifth" would be intolerable. Hence, go political and make publicly friends with the Prez.
How about we just loot him home and company? He gave $30 billion to the Gates foundation. We want that back. Think about what private property means in this country, and what Obama is proposing to do to it.
Further thoughts on Buffet's secretary. If she was with him from back when, he probably endowed her with a few of the A shares and she probably bought some on her own. She is not one of the poor and wretched on this earth. Her Berkshire holdings have probably made her a millionaire many times over, and, if she has cashed in any of her holdings, she paid the same low rate as her boss. Further research should show that Warren Buffet's secretary is one of the one hundred wealthiest women in Omaha. I think it's a sin that I have to pay more taxes than Warren Buffet's secretary.
Obama knows the turf! Joe Wilson ssid it best, "You Lie"! http://www.youtube.com/watch?v=WpSDBu35K-8&feature=youtube_gdata_player
What product does Buffet make? When we think about enabling job creators, is Buffet the image that comes to mind? I know he has a secretary but....
My apologies. I drifted off into teh whole "jobs" thing. Back to inconsequential fundamentals: "Tax the rich!!""More, more, more..How da ya like it? How d'ya like it?"
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