With "the Buffet Rule": "If you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class families do... On the other hand, if you make under $250,000 a year – like 98 percent of American families do – your taxes shouldn’t go up."
Okay, well thanks for reminding me not to let my income spike up over $250,000. I want to remain in my safe cocoon of acceptably restricted income. I don't want to be one of those people who is making things feel unfair.
But the Buffet Rule would only raise $47 billion over a period of 10 years. $47 billion won't even cover 1 week of running the federal government. So it's nothing remotely approaching a serious effort at balancing the budget.
What is it then? Obama is telling us. Right there in the post title. Make this country a little fairer. The only reality is how everyone feels. Now, go to sleep children.
March 31, 2012
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128 comments:
As I wrote this post, an email came in from Barack Obama. The subject line was "Hey."
He was asking me to give him $3.
The salvation was "Let's go."
Singed: "Barack."
Salvation?!
Yikes... what a typo!
Am I still susceptible to the Oneness of the One?
Should be: "salutation."
"Fair" doesn't mean what Obama thinks it means.
Barack was singed?
I really think the Republicans should play along. Any rich person worth their accountants will game the system just fine.
Since everyone is calling this the "Buffet Rule" I think we should just cut to the chase and make it only apply to Warren Buffet.
The kind of economic stupidity we've come to expect from the president. What's disturbs me is how Buffett is willing to latch on to this. Eighty years of building a reputation as a reasoned individual flushed down the toilet...for what?
The air must be going out of the Trayvon Martin thing; he's back to class warfare.
PS Ann, put down the coffee (how many cups is it this morning?), step away from the keyboard, put on your coat, and take a nice walk in the country with Mr Meade.
Better make it the "BuffeTT" rule, or everyone will pay only what they want each time through the line.
Rich people don't consume much of their money. Instead they invest it in voluntary trades that most benefit them, which (curiously!) tend to be trades that most benefit the other side of the trade as well.
The mutual benefit of the trade raises the national standard of living by that amount.
Voluntary trades do that.
Coerced trades, say by government, are not voluntary and have no such surplus of benefit. The cost to one side is more than the gain to the other, in most cases, particularly where payoffs have directed the whole thing.
That negative mutual gain reduces the standard of living of the nation.
The more government directs things, the lower the standard of living.
Another way to see the same effect is that resources are misallocated away from their best uses, and beneficial trades no longer happen, when people no longer direct their own wealth.
The perverse consequences take over right away and build faster and faster when the government starts to fix things, and fix the things it fixed, until bankruptcy.
The Russian model: Your neighbor has a cow and you have no cow. You're granted one wish. You wish your neighbor's cow dies.
Fairness above all, in Russia.
The "fairness argument" is blind to the obvious truth that if I earn $1M, I've created value that wasn't there previously. I've done "good" in one form or another for the people who have paid me.
Lat's call this silly business about "fairness plan" just what it is ... a disincentive to create. Fairness and goodness don't just come from taxation ... unless you are a statist.
He can't win with facts or logic, like in 2008 it will need to be emotion, but this will be uglier than that "Hope and Change" crap that never materialized.
No matter what he says between now and Nov 6, just remember what he said to Medvedev.
"...you should pay at least the same percentage of your income in taxes as middle class families do..."
The effective tax rate, the rate people pay after deductions and exemptions, for the median US household is 4%
For the top .1%, those making $2 million and up, the effective tax rate is 22.7%
For the top 1%, those making $380,000 and up , the rate is 23.3%
Mr. President, they already do, and by a wide margin.
(2008 numbers)
It won't be fair until the top %5 give Zero all of their money to give to his friends.
Then it will be fair.
Tell me again about how this guy is likable.
Tell me.
Con man.
Loser.
My wife started her own company a few years ago. We live in a very modest house with four children who attend private Catholic schools (one in a private non-Catholic college). We pay taxes to support a public school system that we do not use. We are struggling mightily to keep the company (which employs three other people) afloat and yet we find ourselves at or near the point where we are maligned by our own president for our efforts because somehow we seem to be contributing to the unfairness of society.
This is how the government chases rabbits down holes. You set up a tax system with a set of rules that define such things as taxable and nontaxable income, deductibles, and credits. Then, when you need a class villain to scapegoat (rich people, oil companies) you blame them for following the rules.
Thus you need to make up a new set of special, targeted rules to handle the exceptions to the rules on the books.
Those new special, targeted rules, will of course, create their own exceptions.
I really don't have any big objection to the Buffet tax per se. It's a minor inconvenience for the rich that will have no real impact on the economy. But philosophically its a Siphonaptera of ugly and unnecessary overcomplication.
And for what? Obama rings the bell and hopes his dogs drool.
This is not designed to appeal to reason. It appeals to emotion. Feelings and all that.
It is to remind women and effeminite men who vote based emotion who is the fairest of them all. Obama probably asks the mirror that question when he gazes at himself.
They know the gender gap exists and are exploiting it. Sing it, otehr Barry:
Feelings,
Feelings like I've lost you
And feelings like I've never have you
Again in my life.
Feelings,
Wo-o-o feelings
Wo-o-o feelings
Again in my heart
Feelings,
Wo-o-o feelings
Wo-o-o feelings
I am very much against taxes directed at specific firms or industries and "breaks" for others that may be favored for one reason or another at the moment, and I am also against taxes mentioning any specific income levels, especially now that I think we are on the threshold of another major inflationary event/period.
As if what Obama wants is of any importance. He will be joining the unemployment line in January.
The rhetoric is simply " pay your fair share so we can get our free share" as pithily expressed by another commenter on this blog.
Dear President Obama,
How is it fair that many people who choose to not work full time not only pay no taxes, but get a check from the federal government?
How is it fair that because my income went up a little last year due to a job change (and my vacation time at my previous company being paid) and that due to a divorce, I now file as single, I suddenly can't deduct the amount I'd put into my IRA earlier in the year?
Tank said...
It won't be fair until the top %5 give Zero all of their money to give to his friends.
It won't be fair until the top %50.5 give Zero all of their money to give to his friends.
FIFY
There will be no "fairness" when the citizens perceive the tax system as being dominated by party financing concerns, fashionable ideology, and other hit or miss ad hoc maneuvers as the political winds swirl.
Sorry, leslyn, say hello to AMT.
Henry said...
But philosophically its a Siphonaptera of ugly and unnecessary overcomplication.
Apt, apt. As a sometimes flea-bitten mammal, I feel your metaphor.
Singed: "Barack."
Barack was "singed" asbestos he can.
Since everyone is calling this the "Buffet Rule" I think we should just cut to the chase and make it only apply to Warren Buffet.
Buffett's companies don't pay their taxes. Therefore, the Buffett Rule should knock the corporate tax rate down to zero.
Let's not forget that when Warren Buffet & his secretary were given the chance to release their tax returns to the press as Exhibit A of this horrible iniquity, they declined.
Why do I get the sneaky suspicion that somebody didn't want to let the facts get in the way of a good story?
Fairness is an ethical concept, not an economic one (efficiency is the analog) . When talking about taxes, or the allocation of goods generally, efficiency provides a measure against which results can be judged objectively. Fairness, not so much. So it's no surprise that O prefers to discuss economic issues in those terms. Above all, avoid any way of framing the issues that would require judging them against real- world results.
How about a different Buffett rule?
Say, everyone with a net worth of over $40 billion send the feds $10 billion.
After all, they can afford it.
I love the way he kinda slides the $250,000 people in with the millionaires and billionaires.
What shall we call this group who will see their taxes raised? Fairnessaires?
Twofiftythousandaires?
In Soviet Amerca, fairness mean all the shortages will be shared equally!
leslyn- you realize he's saying taxes at that level will go up, right? You just don't get to call yourself a millionaire while you pay your fairness tax.
President Obama regularly rails against the $4 Billion in tax credits to oil companies and now this Buffett rule that could raise $5 Billion a year? Does he not understand those amounts are miniscule and meaningless in relation to the fed's annual deficit? He sounds like a dope when he whines about $4 Billion.
Buffett's reputation is dramatically overrated. His wealth is the product of Federal policy he has actively lobbied for his whole life.
He's a bitter old man that needs all powerful Uncle Sam to protect his wealth.
Pogo:
I know a 29 year old who grew up in Soviet Russia and now lives in Chicago. He and his family are scared to death of Obama due to Obama's love of wealth redistribution and central planning. They know what an abject disaster it is.
I've always wanted to know: How do you measure "fairness"? Obama once said that he wouldn't mind less federal revenue to make the tax code more "fair". More fair than what? You can measure the effects of tax policy by looking an the increases and decreases in revenue.
Fairness has to be one of the most arbitrary quantifiers that you could have. It's more fair when fewer people feel envious? Is it more fair that when total revenues decrease, you have to have more tax increases for "fairness".
Fairness is self important bullshit. It means I get to make the rules.
These people know better, but they don't care. It takes 10 minutes at most to determine that if you seized all the assets of the Forbes 400, you'd fill the gaping Federal deficit for about a year. The following year, you'd need to seize the assets of the next 2000 or so wealthiest. $47 billion over 10 years? Why not half a trillion over a century? Ridiculous.
But AJ, Soviet America will be so much more the fair!
Brutally fair.
Brutally.
Just ask them!
A rising standard of living is based on an economy whose productivity and efficiency increases over time. An equitable distribution of wealth not only does not raise living standards, it, in most cases, actively lowers them. People build better mousetraps because they are in pursuit of money, not mice.... Liberals are fond of crtiicizing conservatives for their belief in intelligent design, but their own economic beliefs are gaudy with ignorance and superstition. Buffet can pay more taxes but there will be no free lunch at the buffet.
Old Man Ric:
"Fairness" "Affordable" "Adequate school funding" "Reform" are the words that libruls have appropriated for their own use alone yet they can't and won't define what these words mean and how they would measure and achieve their goals.
Better make it the "BuffeTT" rule, or everyone will pay only what they want each time through the line.
My first thought when I started reading was that I would only have to pay for what I want or use. That is fair!
I was disappointed to find this is not what was meant.
Lessons from history: Bernard Baruch, like Warren Buffett today, was the capitalist beloved by liberals in a previous generation. Here is the deal he had with Herbert Bayard Swope, the editor of The New York World. He managed Swope's finances and, in return, Swope gave him a favorable press and whatever useful information his reporters were privy to. At that time, The World was the most respected liberal journal, and Swope knew lots of useful information. Win, win. Swope retired young with a portofolio worth seventeen million dollars--this at a time when $25,000 was considered a princely sum for an editor. Bernard Baruch became known as the "park bench philosopher", and you may be sure that his portofolio was worth more than seventeen million dollars....There's a saying that behind every great fortune there's a great crime. I don't know if that's true, but behind a most great fortunes in finance, there's inside information.
It takes money to run a government, so taxes are necessary. An argument can be made for moderately higher percent taxes on larger incomes on the theory that a larger portion of higher incomes are dependent on the services government provides. However, this needs to be done on a curve, not by large discontinuties at arbitrarily selected levels. And the tax should be the same for all sources of income.
You have to hand it to him, Obama is quite skillful at misleading people into thinking he said something other than what he said.
"thanks for reminding me not to let my income spike up over $250,000"
That's not what Obama said. He did not say individual income of $250,000.
What he said was, "If you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class FAMILIES do... On the other hand, if you make under $250,000 a year – like 98 percent of American FAMILIES do – your taxes shouldn’t go up."
After all the Clinton years, haven't people learned to parse every word that comes out of a politician's mouth, especially a Democrat?
It's symbolic and symbolism wins.
Just like putting money into "green" energy doesn't and can't put even a dent into our foreign energy dependency and just like all of the stuff we're supposed to do to solve global warming is only symbolic.
What matters is if we *feel* properly about things.
How "fair" is it that almost 50% of Americans pay no federal income tax at all? You want to raise revenue? Everyone should have some skin in the game.
"Jack Swigert: Listen, listen, they gave us too much delta vee, they had us burn too long. At this rate, we're going to skip right out of the atmosphere and we're never going to get home.
Fred Haise, Sr.: What are you talking about? How'd you figure that?
Jack Swigert: I can add."
Yay! favorite commenter, PogoПОССУМ returns!
Tell me comrade ПОГО, how is that you have so well mastered American articles, a and the? I am forever perplexed.
In former Soviet Union, we are delighted that comrade OБAMA is spelling very closely to mother tongue!
Human experience lesson.
Specialize and trade to create wealth. That not only works but it benefits both sides. You can only get wealthy by making other people wealthy.
The prior model since the stone age: hit the guy on the head and take his stuff.
That doesn't create wealth, it just moves what exists.
Obama is a stone-age guy.
And if Buffett wasn't so busy fighting in court the taxes he owes and gave the US Treasury $1.5 billion out of the goodness of his heart, that would reduce the deficit by 1/10th of a percentage point.
Yeah "fairness"!
Happy you voted for this economic illiteracy, Ann?
Any statute with the word "fair" in it, won't be.
If you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class families do.
It's provable that they, in fact, the rich pay more taxes than everyone else.
I suspect Obama has no idea what he's talking about. But I also suspect that if he did, he'd lie and still say what he said.
@chicken that is the little:
Товарищ!!
Is good am be back. I am been in marvelous Cuba, land of free, learning the English now 3 years.
Each day I learn your crazy language rule. Is like eating the glass.
But I do this for new Mother Country, Soviet Amerca!
After Premier Obama is again Dear Leader for the 4 more glorious years, I will become USA Ambassador to Texas. This you to hear more about soon!
slyn said...
Well, I'm going straight for the donut hole--the sweet spot between 250k and 1 Mil.
And the rest of you can't come. I've got mine, so--piss off.
Knock yerself out, sweetheart.
slyn said...
Well, I'm going straight for the donut hole--the sweet spot between 250k and 1 Mil.
And the rest of you can't come. I've got mine, so--piss off.
Hittin' the wine spritzers a bit early are we?
In Soviet Amerca, wine spritzer is for Номенклатура nomenklatura.
For the prole is Водка Vodka!!!
Specialize and trade to create wealth. That not only works but it benefits both sides. You can only get wealthy by making other people wealthy.
OMG! Somebody finally gets it. The freakin' secret to the whole thing. The part of the equation that the left steadfastly refuses to accept.
People create wealth.
Governments consume wealth.
"fair" is what kids on the playground whine about.
That's the level of discourse which occurs when people put someone whose bike had training wheels on it into the Oval Office.
Is POGO Pogo? Or do we now have Pogos?
It's so fair that the tax will only materially matter to the few who have to pay it, for whom it will matter a great deal.
Yep, that's the definition of fair.
JAL,
It's just a mask, for fun.
Consider him my idiot socialist cousin from Minsk.
Or Chicago. Lo mismo.
"In former Soviet Union, we are delighted that comrade OБAMA is spelling very closely to mother tongue!"
Is flexible!
How about all money that a politician makes while in office besides salary is taxed 100%.
There's nothing more unfair than making money off one's elected position. The fair thing would be to give such money back to the people. Call it the "investing for America" bill.
This is fresh in my mind, with it being tax season and all.
I think ours is a fairly standard middle-class household, total income just a bit south of 100K. Over the past several years, we've paid between 6.5% - 8.5% of that in federal taxes.
So a dividend tax of 15% doesn't seem egregiously low.
The really scary thing about all of this is that my left-leaning friends are all convinced we have a deficit because of minor tax matters like this. (They also believe tax policy has no effect on the behavior of taxpayers, but that is another story.)
If the Bush tax cuts were repealed and the "Buffet tax" was implemented, we would still have a huge deficit and we would still be facing the retirement of the baby boomers, (of which I am on the tail end) which will make today's fiscal problems trivial by comparison. Spending must be cut- and not just the rate of spending growth. Real cuts. Big cuts.
Except for maybe for Althouse and Meade how many on this bog make over $250,000? And frankly, I have never let taxes hold me back from taking profit,in those few years when my family hits the mark, so what is the big deal about paying a bit more?
Do you know how "loop-holes" are born?
Loop holes are born when the government (and the people) decide to "stick it to" those who have more money than they ought, and then someone says.... but what if they have huge medical bills?... but what if they're going to invest?... we want them to invest, right? Etc., etc.
People on the edge of the "stick it to them" zone and people much lower (since taxes should be *fair* and rules apply to everyone) don't have their own accountants and don't handle enough money to spend time learning how to manage it well in between dealing with life. So the "rich" do well enough and the "not-so-rich" get screwed... again.
In my experience lawyers don't understand math very well. Maybe we should elect a CPA President.
Too bad he's not interested in protecting, preserving and expanding our personal freedom, but quite the opposite, forcing us to make the "choices" he approves of.
Okay, R/V, that is what I meant. To say "That tax policy would not change my behavior" should not lead one to the conclusion "That tax policy would not change the group behavior of the group being taxed." In other words, making judgments about tax policy on the basis of how YOU think the tax policy would change YOUR behavior is perhaps not the best way to project how the policy would actually change revenue or change the path of the national economy.
Rob well history shows that when we wealthy paid a higher tax rate, it didn't seem to slow us down, but simply encouraged us to hire a good accountant.
In terms of tax revenue...flat rate on higher income equals more..i.e. progressive income. A flat tax example is sales tax. It would seem "unfair" to charge a higher sales tax rate based on income. But it's interesting to imagine it. This could be posted as tax tiers on the price tag or done less visibly via an IRS provided card that is swiped at checkout to calculate your "fair share" sales tax.
Interesting that he presses the "fair share" route when over 40% aren't paying any income tax. Unless they make no use of government funded services, there's the more prevalent inequity. Actually, logic would suggest that after one makes a certain amount of taxable income, the fair share of supporting government (citizenry toll) would be met and anything above that would be untouched. That would still essentially be "progressive". If you really want to go fair share, you could argue that lower incomes should be taxed higher than higher incomes..in an attempt to get low income citizens to pay their "fair share". But that's logical thought, not political.
What would make the country fair for low income peoples? people living paycheck to paycheck?
1. no 2 year cell phone contracts
2. only month to month rental agreements
3. no tax on beer, beans, and bread
4. use credit checks only for credit applications
5. Legalize pot.
6. Restrict prosecutors and police from over felonzing suspects.
The buffet rule does squat for the poor. Obama might as well be giving them a squat sandwhich
Rob well history shows that when we wealthy paid a higher tax rate, it didn't seem to slow us down, but simply encouraged us to hire a good accountant.
So it's a stimulus program for accountants and tax lawyers - I understand now.
More jobs "saved or created".
Althouse is obviously engaging in another right-wing circle jerk
/shiloh
RV, history shows no such thing. I call bullshit.
Foolish twaddle.
Honestly I don't understand why you cons are against higher tax rates. Steve Jobs wasn't in it for the money. Sure he became filthy rich, but that was a by-product of his insatiable drive to change the world. He gladly paid whatever taxes he needed to. So all you cons obsessing about every last dollar are missing the fucking point about life.
roesch/voltaire said...
Rob well history shows that when we wealthy paid a higher tax rate, it didn't seem to slow us down, but simply encouraged us to hire a good accountant.
History shows us that when there is a higher tax rate there are less wealthy people to tax. Which slows us down.
Rusty - we don't have more rich people because of lowered tax rates. It's all due to the tech revolution has enhanced turn-around time.
Alex said...
Honestly I don't understand why you cons are against higher tax rates. Steve Jobs wasn't in it for the money. Sure he became filthy rich, but that was a by-product of his insatiable drive to change the world. He gladly paid whatever taxes he needed to. So all you cons obsessing about every last dollar are missing the fucking point about life.
And you miss the point on creating wealth. Wealth isn't necessarily money. money is the counter in the game. Jobs was very concerned about creating wealth. If he wasn't he wouldn't have created a huge corporation with its attendant write offs. How much does Apple have overseas?
Your assertion is invalid.
3. no tax on beer, beans, and bread
You're one of those Beer Farty Patriots, aren't you?
I see stuff like this and I'm wondering how bad his polling numbers really are he has to throw red meat like this to his base week after week. Obama should try getting his cabinet and staff to pay its own taxes first before lecturing the rest of the country on "fairness" What a dope.
http://www.washingtonpost.com/blogs/federal-eye/post/federal-employees-owe-103-billion-in-unpaid-taxes/2012/01/20/gIQAv7KKJQ_blog.html
So Ann opposes progressive taxation? Good to know.
Rusty - once again you miss the point. Steve Jobs #1 concern was designing kick-ass products that just happened to become massive hits and generated tons of cash. Then later he figured out how to streamline the supply-chain and all that. But the initial impetus was his desire to create better products for the world, not to make money. I submit that any CEO who is pursuing money rather then great product is shameful.
PogoПОССУМsaid...
In Soviet Amerca, fairness mean all the shortages will be shared equally!
That should read Insolvent America
JAL said...
Is POGO Pogo? Or do we now have Pogos?
What English plural of POGO? POGI? Or is better like in Italian to make hard gamma: POGHI
Excuse my frequent lapse in attention here. I am shopping rounds at large American oulet stores. This is very much something I enjoy on Saturdays.
Today in front of store I am confronted by large man asking for signature to support new tax on rich. Man is explaining that new tax only for over $250k making capitalist is. I am explaining back that I do not enjoy signing petition because makes me target Democratic. Then Man is saying to me "What about children?" I walk inside to buy vodka.
Alex, what the hell are you talking about? Steve Jobs became rich. What does that have to do with fairness in taxation?
It seems you are advocating the tired old line that taxpayers should just shut up and be grateful the government lets them keep as much as it does.
The fact that I cannot accurately predict what I will owe in taxes in 2013 is obscene. Any time, I change any of my benefits, it is a mystery what my paycheck will be until I get it. It ends up being a complicated game where I fiddle with a several numbers and cross my fingers and hope I don't end up owing the government a shitload of money.
"Rob well history shows that when we wealthy paid a higher tax rate, it didn't seem to slow us down, but simply encouraged us to hire a good accountant."
And the wealthy can and the wealthy *do*.
Which is one of my "buttons" when it comes to using tax laws to pick and chose between people.
The less wealthy don't go hire a good accountant. They just get screwed by the "run off" from the laws meant to punish others.
roesch/voltaire said...
Rob well history shows that when we wealthy paid a higher tax rate, it didn't seem to slow us down, but simply encouraged us to hire a good accountant.
History also showing is that in 1950s everybody is paying tax more. There is no 47% free rider. Everyone has skin in game. Everyone is feeling ouch when new entitlements asked for.
Permanent underclass is powerful tool to keep tools in power.
Joe - my point is you don't understand the psychology of rich people. Tax rates are irrelevant to them. They're going to be rich no matter what.
Seems since Obama has not lived up to messianic HOPE, the need is to forever deify Steve Jobs:
"charity’s not the only place he was tight. When he was alive he did everything he could to reduce his taxes. He used tax shelters to lower his tax rate from 35% to around 15% on millions. He put his real estate and other assets in trusts so they would escape the death tax.
Everywhere you look Steve Jobs was doing what he could to keep his own money. Not giving it away. Avoiding paying taxes. All while he’s taking advantage of everything America has to offer."
and "“You’re headed for a one-term presidency,” he [Jobs] told Obama at the start of their meeting, insisting that the administration needed to be more business-friendly. As an example, Jobs described the ease with which companies can build factories in China compared to the United States, where “regulations and unnecessary costs” make it difficult for them."
I don't get it, Ann. Do you think really wealthy people should pay LESS than the middle class?
Incidentally, the largest tax rate I found was for married filing single, equal incomes, earning 216K, no deductions. The Federal Government taxes alone are about 37%, after the personal deductions. It's really amazing. Compare that to the 15% those with lots of money get, with long term capital gains, using 2010 forms.
Then there is the return on Social Security. According to the social security web site, using their numbers, a person born in 1960, retiring in 2027, and earning 108K in 2010 will get less than 50 cents on the REAL dollar from Social Security.
Personally, I'm in favor of reducing programs, since those are a form of forced spending, which benefits the owners who make things.
Finally, if you look at the stimulus money, it didn't bounce around at all. There was no multiplier on it that I could see, in fact with some estimating from $250 - $450K per job created from the stimulus, it seems there was a tax on it. How much sense does it make to "Stimulate" the economy by pouring money into it, having it bounce one hop to be sucked up by the ownership class, to buy T-Bills? The money flows are screwed up and need to be fixed. I don't care at this point if government caused it, the problem is the middle class alone is paying for it. It needs to be fixed.
Tax rates are irrelevant to them. They're going to be rich no matter what.
How that was your point escapes me. It's also complete and utter bullshit. The rich are more conscious of tax rates than your average person, which is one reason they are rich. You rarely become rich by being frivolous with money.
The rich can afford to shelter money in ways the middle and upper-middle class can't and the existence of those shelters belies your argument, though I'll wager that the vast majority of the rich would rather not have to use tax shelters; it's annoying, costs money and often gets in the way of liquidity.
"All while he’s taking advantage of everything America has to offer."
I'd suggest that it's the other way around. America is taking advantage of him. He could have put himself and Apple anywhere he wanted. It didn't have to be the U.S., but where is the nation's replacement or alternative to the richest company in the world, which employs thousands, helps millions, and pays a crap load of taxes directly and indirectly and creates entire economic sectors with it's products.
Who is really the lucky one that Apple is here?
That's what Jobs was trying to get through to Obama.
Disclosure: Other than songs, I have never purchased an Apple product and don't like them.
Alex, that is tax policy from anecdote. Which, sadly, is how a lot of government policy of all sorts is made.
"where is the nation's replacement or alternative to the richest company in the world, which employs thousands, helps millions, and pays a crap load of taxes directly and indirectly and creates entire economic sectors with it's products."
That's what the green subsidies are designed to create. How's that workin'?
Tax rates matter a lot to those of us who have made enough to qualify for inclusion in our president's unfair group of evil rich people. To think otherwise betrays an unfamiliarity with the "rich" that is jaw dropping. If rates go from 30 to 33 percent progressives like Garage claim a 3% rise in rates is inconsequential. Numerate people and the rich would understand thst they have to do 10% better to stay even. 10% is not an easy hurdle to hop to get where you were. Taxes matter. To numerate and rich people. Not to people who dont know the difference between a three and a ten percent increase.
"Tax rates are irrelevant to them. They're going to be rich no matter what."
That is what I believe Obama thinks. But he doesn't say that, he goes to "fair share" as if that has been defined.
Incidentally, the largest tax rate I found was for married filing single, equal incomes, earning 216K, no deductions. The Federal Government taxes alone are about 37%, after the personal deductions. It's really amazing. Compare that to the 15% those with lots of money get, with long term capital gains, using 2010 forms.
And what was the money taxed before it was sent to the stockholders?
You're aware you need to add the corporate tax rate on top of the capital gains tax rate since every dime is taxed twice, right?
Can you explain why the government has any right to money that was already taxed once?
Steve Jobs wasn't in it for the money. Sure he became filthy rich, but that was a by-product of his insatiable drive to change the world. He gladly paid whatever taxes he needed to. . . . you don't understand the psychology of rich people. Tax rates are irrelevant to them. They're going to be rich no matter what.
The thing about rich people is this -- they are rich.
They don't have to work. They don't have to produce. They don't have to earn money, they are not compelled to have any income at all -- they are already rich.
Tax rates become very relevant to them when they reach a point where it is no longer worth it to them to go to all the trouble of working. And when government ends up taking near half of what you earn, when you own only half of the fruits of your labors, and the government owns the other half of your labor, then you are effectively no longer free, but a slave.
In that situation, the psychology of any sane rich person is to say, "to hell with that," and not bother working at all. "Why should I do all this work just so the government can take it." Thus, they both do not produce needed or desirable goods or services and they do not earn the income in the first place, such that, instead of government getting half in taxes, government now gets nothing.
Revenues go down, not up. Innovative products never get invented or manufactured and sold. The economy stagnates.
Fair: everybody pays income taxes
I don't care if they pony up a mere $20. At least they would have some skin in the game.
Tocqueville is right:
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship."
The communists followed a similar strategy in the Soviet Union, where individuals advanced principally by a selection process which often did not reflect merit and was highly discriminatory. The result was a progressively demoralized and disinterested population which found it difficult to acknowledge their own individual dignity. When it is implemented without consensus (not a perceived "consensus") it really is a corrupt system by design.
Fen:
Neither a tyranny of a majority nor a minority is desirable. In order to even have a chance of preserving individual dignity (which should be the goal), then it is necessary to maintain comprehensive stakeholders. This does not mean that everyone will enjoy a beachfront property in Hawaii. There are reasonable compromises, but it is imperative that we avoid policies which corrupt individuals and, in following, society.
Warren Buffett has not become a latter-day tax crusader so that he can pay his “fair share”; he has become a crusader so that he can continue plundering his unfair share of tax receipts and crony favoritism. By lending his reputation to the “tax fairness” crusade, Buffett legitimizes the progressive/socialist agendas that tickle the fancy of so many political leaders. As a result, Buffett endears himself to those with the power to advance his financial interests.
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even if you bumped the personal income tax all the way up to 100%, and literally confiscated every cent of Buffett’s direct personal income, the effective tax rate on the totality of his increased wealth in 2010 would have been only 1.4%!
So you see how easy it is to be a do-gooding, “fair-share-paying” billionaire?
Buffett’s “tax fairness” ideas — focusing as they do on personal income, dividends and capital gains taxes — would leave Buffett, himself, virtually unscathed. That’s because:
1) His personal income represents less than 2% of his annual wealth accumulation;
2) Berkshire Hathaway has never paid a dividend in its history;
3) Buffett, himself, has no intention of generating any capital gains because he has no intention of selling a single share of Berkshire Hathaway.
Tellingly, Buffett’s proposals exclude any mention of estate taxes or of disallowing certain deductions for those he calls the “mega-rich.” These exclusions are no accident.
Read more: http://feedproxy.google.com/~r/dailyreckoning/~3/b6BusthDyOY/#ixzz1qjUP8vl5
Tax rates should matter to everyone, or least everyone who has any ambition at all that would lead them off the dole. Tax rates matter even more to the poor, whether they know it or not.
The majority of all the money taken in taxes is not going to be used effectively in a way that will create jobs, solve problems, improve economic vitality and fuel upward mobility anywhere near as well as it would in the hands of the taxpayers.
It will be in either outright wasted, or used to deliver far less to the country and it's people than almost anything else that could be done with it.
All you have to do is imagine if congress had all of your money tomorrow. What would they do with it compared to what you would? Most of the rich are, by definition, better at utilizing money than even the average taxpayer, who is still better than the Congress, who uses a complex and unaccountable bureaucracy to do it primarily to get reelected.
Taxes are mostly just a dumb investment in an organization that is corrupt and very poorly managed.
I can do better, and I bet you can too.
Fairness? How about these two things as being "fair"?
First, how about a federal government lean enough not to take more than 15% of any American's earnings, and wise enough to not borrow for spending above the amount of taxes collected?
Second, how about a social discipline that encourages every able-bodied person to contribute via work? How about a social system that doesn't reward dropping out of high school with no further training? A system that does not reward out-of-wedlock births?
Otherwise, those who work and contribute must put up with the nonsense about so-called fairness, which is really nothing more that agreeing to a level of economic enslavement by a bloated government that confiscates and re-distributes what people earn as their own money.
A reminder: What you earn is your money. It does not belong to government.
Of course we need to pay taxes to do some things we can't do privately, but we are so far away from that standard that the way I look at is that every dollar I keep from the government is a little piece of the work they claim to be doing for which I'm saying: "Step aside, I can do this better myself."
Here's one idea for making people feel that the tax system is "fair". How about the President saying: "Look under our federal tax laws, rich people as a group pay dispropotionately more in taxes than non-rich people. Thanks, rich people!"
You're aware you need to add the corporate tax rate on top of the capital gains tax rate since every dime is taxed twice, right?
How about this. Let's get RID of the corporate tax altogether, and create a VAT instead. True, it will have some variations in the effects, but you could probably come up with a tax neutral way of doing this, and generally will have the same effect on corporations.
Now, the cool thing about a VAT is it is paid for by consumers. Then people like you won't keep repeating the statement that "corporate taxes" are paid for by the owners. The TRUTH is these taxes are also paid by consumers, and yes it also limits profits.
Remember Herman Cain? He calculates that 40c out of each dollar in a loaf of bread is tax. That's consumer's money going to the bread tax, you know.
When I first saw that Obama wanted a Buffet Rule to make things 'fairer', I thought he was going to issue vouchers for Golden Corral or something.
Alex said...
Rusty - once again you miss the point. Steve Jobs #1 concern was designing kick-ass products that just happened to become massive hits and generated tons of cash. Then later he figured out how to streamline the supply-chain and all that. But the initial impetus was his desire to create better products for the world, not to make money. I submit that any CEO who is pursuing money rather then great product is shameful.
No. You miss the point. The result of his desire was to create wealth. In oreder to feed his desire he had to keep creating wealth.
Besides which if he was such an altruist he would have given his employees who had passed up their free shares, their free shares. Something he went out of his way not to do.
Yes it was all about the money.
"I'm not sure the Buffet rule is the best way to go about promoting social cohesion"
Class warfare has a way of heightening divisions. And pushing a rule named after a hypocrite that won't be affected by it is insulting.
"things were economically healthier when the country and corporation were closer to a military caravans."
Can you give an example?..when?..what company?
"public u professors are technically still state/public employees."
Yeah Ann,
You'd be "keeping it real" if you played the role of blue fister, OWS, tax the rich/fair share professor.
I'm in Canada skiing.
I was talking to one of the locals, and they were commenting how things are so much cheaper in the States.
He asked me if I knew what BC meant.
Well...of course, I responded "British Columbia".
"Nahh", he said. "It means Bring Cash!!"
I liked it a lot better in this country before Barack made things so fair. It reminds me of when my mom took away whatever we were fighting over so no one would have it. That was fair.
Pogoes?
Funny (not) how "...endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness..."
omits "fair."
People around the world get die for those.
Republicans, the stupid party, should force Democrats, the retarded party, to live up to what comes out of their mouths.
Pass a tax increase for registered Democrats. They want higher taxes and think they are great? Then they can pay for them.
They can do so voluntarily already, but Democrats get off on the force aspect. I say give it to them good and hard.
Henry, you are partially right.
We should pass a Constitutional Amendment that takes 100% of Buffett's net worth. That is roughly equal to the same revenue collected from 10 years of the Buffett rule.
The Republicans are dumb for not proposing this. Win by giving the morons what they want, but in a different format.
They say it's about the revenue? They get the same revenue and faster. They say it's about the fairness? It's 'fairer' for one rich man to suffer rather than punishing a larger number of poorer men.
Comrade ПОССУМ ,
Please to tell the secret of how you enter the Cyrillic characters?
"We pay taxes to support a public school system that we do not use. We are struggling mightily to keep the company (which employs three other people) afloat and yet we find ourselves at or near the point where we are maligned by our own president for our efforts because somehow we seem to be contributing to the unfairness of society."
Ding...Flukin' ding
Please to tell the secret of how you enter the Cyrillic characters?
I believe the Comrade used a Windows Character Map
Back in the Carter years I remember being lectured by the head of marketing at the small company where I worked on clever ways to shelter income. Of course, back then my wife and I didn't make enough so that it made sense to spend money in strange and frivolous ways to shelter income (I mean, buying lithograph stones???).
I see that Barack Obama longs to return to those pre-Reagan days.
The rich can shelter money. Period. The rich can move money. Period. The Buffet rule is not targeted at people in Buffet's financial class. It is targeted at the people the Democrats hate with a blind passions: small farmers and small business owners.
Without the really, really rich -- the limousine liberals -- to support them, the Democrat party would fold in a week. Buffet rule or no Buffet rule, there will be plenty of loopholes and ways to shelter income in the resulting tax code. Count on it.
We should pass a Constitutional Amendment that takes 100% of Buffett's net worth. That is roughly equal to the same revenue collected from 10 years of the Buffett rule.
Wife and I did some quick calculations. If the Democrats really did manage to raise the maximum tax rate to 70%, as has been reported in the Washington Post, and if California really does raise its maximum tax rate to 13%, plus a local income tax add-on of 3%, and add in sales taxes and property taxes, then rich Californians could wind up owing more than 100% of their income.
Will Silicon Valley turn into a ghost town? Will rich, liberal Californians "go Galt" as the Laffer curve predicts? Or will they just move to a low-tax state (e.g., the hill country around Austin, TX)? Or will Democrat politicians come to their senses?
As to that last one, nah.
If the Democrats really did manage to raise the maximum tax rate to 70 percent . . . Will rich, liberal Californians "go Galt" as the Laffer curve predicts? Or will they just move to a low-tax state
Remember the rates are marginal. The 70 percent rate would apply only to that portion of income which is above a certain amount, say $250,000.
But the rich have acquired wealth. They have houses and fancy cars and jewels, etc. that are already paid for. So they don't need a super-high income.
They can live quite well on making only $249,000 or $100,000. So that is what they will do. They will earn up to a certain point and then stop. Only a really stupid person would go earn more money that "they don't really need."
If they "don't really need the money, so it is OK to take it in taxes," as the high-tax crowd says, then they don't really need to earn it in the first place. Continuing to work is not cost-effective, the rich will rather spend their time with leisure instead.
That is exactly what I did with my small business, the income of which was taxed at 28 percent, plus 15 percent self-employment tax, plus another 5 percent state income tax = 48 percent. After a certain point, my time became more valuable to me than earning and having to give half of those earnings to the government. So I simply stopped earning more, I simply stopped providing those services to people who needed them.
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