The Buffet Rule

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  1. Charles James profile image77
    Charles Jamesposted 6 years ago

    The Buffet Rule is that anyone who has income of $1 million a year should pay 30% income tax. What's wrong with that?

    1. habee profile image94
      habeeposted 6 years agoin reply to this

      I haven't made a final decision on the BR yet. I'm still reading about it.

    2. glockr profile image59
      glockrposted 6 years agoin reply to this

      What's wrong with that is the money is taxed twice. If you own stock in a company, you are in essence an owner of the company. Dividends are paid from the profit "your" company makes, which has already been taxed. The other problem with it is that every time capital gains taxes have gone up in the US, tax revenue goes down. It turns out that rich people aren't stupid, and if you punish them financially they find other places to put their money. So raising taxes on the rich actually results in the government having LESS money to spend on the poor whom they purport to care about. I think the only real concern they have for the poor is who they vote for.

      1. Repairguy47 profile image58
        Repairguy47posted 6 years agoin reply to this

        Nooooo? You think the libs care only for who the poor are voting for? That's crazy talk.

      2. Eric Newland profile image60
        Eric Newlandposted 6 years agoin reply to this

        I do remember reading that federal revenue actually INCREASED after the 2003 tax cuts. As well, 8 million new jobs were created over the next four years.

        Let's see, what were those cuts to? Oh right, dividends and capital gains.

        http://washingtontimes.com/news/2010/fe … l-revenue/

        1. Charles James profile image77
          Charles Jamesposted 6 years agoin reply to this

          When Guliani was mayor of New York he reduced the hotel tax significantly. The effect was that New York became more competitive. 20,000 hotel jobs were created, and people started building new hotels - which had not happened for over a decade.

          Reducing a tax can increase total tax revenue.

          Is it right, thoough, that rich p-eople pay proportionately less tax, and sometimes absolutely less tax, than middle income and poor people?

  2. Eric Newland profile image60
    Eric Newlandposted 6 years ago

    Even if one accepts it whole-heartedly, it still leaves us with the question of what to do with the OTHER 97% of the deficit (the most liberal estimate I've seen for Buffet Rule revenue is 3.2% of what we're overspending).

    Sometimes I feel like all the well-meaning-sounding talk of taxing the rich is just hand-waving to distract people from talking about budget cuts, which ultimately need to happen, with or without new taxes.

    1. Charles James profile image77
      Charles Jamesposted 6 years agoin reply to this

      Eric, you are quite right.

      Attention to the spending side is also importasnt. I cannot comment on detail on the USA spend, but we in the European Union pay agricultural producers ridiculous amounts of money, and even pay them not to grow anything! We have storage costs for a wine lake and a beef mountain. And sometimes we wreck the economies of other countries by dumping food.

      It was calculated a while ago that tax evasion is larger than our National Health Service.

      I saw a piece about your cruise misslies some years ago where the guidance systems could not cope with snow - a bit of a problem when your opponent is Russia! How did that programme get started!

    2. kerryg profile image86
      kerrygposted 6 years agoin reply to this

      I think it could just as easily be a bone thrown to the left to shut us up about income equality long enough to not have another autumn of #occupy leading up to the election.

      Whether it will work or not remains to be seen - I imagine most occupiers have noticed by now that the US middle class had the best standard of living during a time when the 1% were being taxed anywhere from 70-92%, not 30%. tongue

      1. Eric Newland profile image60
        Eric Newlandposted 6 years agoin reply to this

        I think you might need to read up on the difference between marginal tax rate and average tax rate.

        And yes, nothing encourages prosperity quite like punishing prosperity.

        1. Eric Newland profile image60
          Eric Newlandposted 6 years agoin reply to this

          Ah, yes, good ol' 1936. The glory days. That 79% marginal tax rate sure made a difference, didn't it?

          Actually, the prosperity we enjoyed in, say, the fifties was due in large part to the efforts of one visionary and charismatic leader.

          Unfortunately, that leader was Hitler.

          Nothing boosts the ol' GNP like getting everyone employed either as a soldier or building tanks, and nothing encourages frugal living like rationing. Best shot in the butt an economy can get, really.

        2. kerryg profile image86
          kerrygposted 6 years agoin reply to this

          People who care about building a good business (and thereby improving the economy) aren't usually the ones taking salaries 400 times higher than their average employee. They usually take reasonable salaries and put most of the profits back into growing the business (which in some cases makes these expenses tax deductible).

          People who just want to make themselves filthy rich without giving anything back to society at large are free to leave the US if they don't like our tax policies, and good riddance, frankly.

          I'm not saying such people shouldn't be allowed to exist, just saying that the US government shouldn't be rewarding them for activities that enrich themselves at the expense of the US economy and the American people.

  3. Kangaroo_Jase profile image80
    Kangaroo_Jaseposted 6 years ago

    Whats wrong with that?

    30% tax????? Bloody cheap if you ask Australians as we pay;

    $54,550 plus 45c for each $1 over $180,000   <<<---- this is our highest individual earnings tax bracket.

    1. Charles James profile image77
      Charles Jamesposted 6 years agoin reply to this

      Yes, but what do your rich guys actally pay?

      1. Will Apse profile image90
        Will Apseposted 6 years agoin reply to this

        The super rich pay 10 per cent on average in the UK. They have a habit of migrating if you charge them anything reasonable.

        That is one of many the powers of capital.

        http://www.thisismoney.co.uk/money/news … ds-newsxml

        1. EmpressFelicity profile image70
          EmpressFelicityposted 6 years agoin reply to this

          Yes, and you can't very well stop them migrating unless you impose some extremely draconian laws.

          The economics of one country doesn't take place in a bubble - it's dependent on what happens in other countries, and on whether the parties concerned have freedom to go elsewhere.

  4. Wayne Brown profile image84
    Wayne Brownposted 6 years ago

    One of the big problems with it is that Buffet is talking about folks other than himself. You will note that he said "income tax" not "capital gains tax".  Most people with income above a million a year have a lot of that income coming off investments, etc.  To get at it with the 30% tax, one would have to raise the capital gains tax which will severely undermine the investment of capital into the production and business base of the country.  Warren Buffet needs to stick to what he knows best and shut up.  When the flimsy example of his assistant's tax rate being higher than his, that should have been your signal to realize that Buffet gets most of his income from capital gains. WB

    1. EmpressFelicity profile image70
      EmpressFelicityposted 6 years agoin reply to this

      Not arguing with what you say - it makes complete sense - but what is Buffet hoping to gain by touting the idea of increased income tax?

      1. Will Apse profile image90
        Will Apseposted 6 years agoin reply to this

        Buffet is on record as saying he fears the rise of an entrenched plutocracy in the US.

        He wants higher inheritance taxes and a higher taxes generally for the rich.

        In other words. the poor old fool thinks people should earn their money. And that the people who have money (and the power that goes with it) should have have some kind of merit.

        1. EmpressFelicity profile image70
          EmpressFelicityposted 6 years agoin reply to this

          That's a bit like Fred Goodwin saying he's against bankers' bonuses.

          1. Will Apse profile image90
            Will Apseposted 6 years agoin reply to this

            He has also said that he doesn't understand why his obscure talents in a particular area of the financial markets net him billions whilst people like nurses and teachers who make just as an important a contribution to the world, earn a pittance.

            He plans on donating most of his money to good causes.

            Bill Gates is of a like mind.

      2. glockr profile image59
        glockrposted 6 years agoin reply to this

        It allows him to appear as if he "cares for the poor" while he himself shelters his money in tax exempt foundations. I don't remember the exact word for what he's doing but it rhymes with 'hypocrisy."

    2. Charles James profile image77
      Charles Jamesposted 6 years agoin reply to this

      I have no issue with 30% capital gains tax.

      One issue with Buffet is that his companies generally hold assets for a very long time, and do not generally pay dividends. I think it reasonable to apply the 30% tax to income and capital gains whether realised or not,

  5. Repairguy47 profile image58
    Repairguy47posted 6 years ago

    Why not just quit spending so much? Oh, never mind.

  6. Disturbia profile image61
    Disturbiaposted 6 years ago

    $1 million a year?  Why set the bar so low?

  7. EmpressFelicity profile image70
    EmpressFelicityposted 6 years ago

    14-minute video called "Warren Buffet Paradigm Puppet".

    Interesting, especially about five minutes in.


    http://www.youtube.com/watch?v=gJYLmDbI … mp;list=UL

 
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