"I'm rich; tax me more!"Follow

No, and please never speak about businesses again.

Edited, Sep 28th 2010 6:08pm by Allegory

At some point, if the investor ever wants to actually gain anything from his investments, he's going to have to pay that capital gains tax. So it's going to affect his choices. My earlier point was that a guy who made his millions riding a stock bubble and presumably diversifying since then talking about how income taxes don't affect him like they used to is kinda misleading.

Especially this statement:



Um... duh! And if he was mixing all different tax types, then he's probably the only person with investments in the universe who doesn't take into account long term versus short term capital gains tax rates when making investment decisions. And that's absolutely dependent on the difference between capital gains rates and personal income rates.

So he's either a nutty one off, doesn't know what he's talking about (maybe he's got someone who handles his portfolio for him?), or he's flat out lying in order to make a political point. It's hard to say, but his op-ed is so full of contradictory statements and just flat out "wrong" things, that it's hard to take him seriously.

You cannot write off business expenses?

Really?

I will happily admit my post is wrong at face value (it is NOT a one day transaction), but my understanding is that it is very easy to buy and sell things which make your corporate taxes (even as a sole proprietorship) look very small.

Edited, Sep 28th 2010 4:50pm by yossarian

In reply to the title of the post: I don't know the source, because it was some event on C-SPAN years ago, but Warren Buffett said that it just isn't right that his personal secretary and he pay the same rate of taxation.

His page on wikipedia has a related quote - that he pays a lower percentage then his employees. It does not indicate he believes this is wrong.

Yes. And he was comparing capital gains taxes to income taxes. I could explain it to you, but it's kinda necessary for long term capital gains taxes to be lower than income taxes.

As to the specific statement, he was talking about paying 17.7% on $46M, while his secretary paid 30% on $60k. So that means that he paid $81.M in taxes, while she paid much much less. He's also incorrect. Someone making $60k would pay 25% in taxes, not 30%. It's also progressive, meaning that she'd pay only $11,181 (in 2007, the year he made this statement), which works out to 18.64% of the whole in taxes. Of course, that assumes that she takes no deductions and has no exemptions. Assuming she's single, with just a standard deduction and exemption, we're looking more at around $9k in taxes (right around the same 17% number. If she's got a kid or three, or is buying a home, her taxes are likely much much much less.


It's an absurd statement to make. And just like the one in the article above, it's somewhat deliberately misleading. He's deliberately fudging the facts in order to make what appears to be a strong political statement about taxation and the whole "rich vs poor" dynamic. But it ignores massive factors that differentiate the two cases involved. How many people's jobs were dependent on the economic activity which generated that $46M in earnings for Buffet? Do we just pretend that he's the only person benefiting from that? It's not the same thing.

so like, 1 years worth of military spending? wooo.....


I agree we should let the tax cuts expire as it will help, but if we really want to decrease the debt in a meaningful way there are some other problems we also need to address asap.
In order to keep pulling in X$ in taxes while taxing all income groups the same you'd need to significantly raise the tax burden on the vast majority of people to a point where the middle class would become poor and the lower class would become destitute. Increased destitution increases crime. Increased crime increases federal spending. Increased federal spending increases accumulated debt. Increased accumulated debt forces you to increase taxes. Nation goes to hell. Good job >_>b




Aside from that, it doesn't work for most of the same reasons trickle down economics doesn't work, the rich are just less likely to spend money in ways that stimulate the economy than the poor, more likely to try to avoid taxes, and more likely to spend wealth outside of the country and on foreign products.

Edited, Sep 28th 2010 8:11pm by shintasama

Like *not* spending trillions of dollars on stimulus and health care bills? I agree!

Not letting the tax cuts expire wont make any difference at all if we don't curb spending. Give the government more money, and they'll just spend more money. If extending the tax cuts reduces that money next year, and that makes it harder for them to spend more, and perhaps even encourages them to actually cut spending, then it's worth doing just for that reason.



Irrelevant tangent since that's not really what anyone is arguing about (fair tax being a separate issue). On this issue, it's a matter of everyone being taxed for more next year than they are today. In every measurable way we'll be better off if we extend the tax cuts. We're in the middle of a low point economically speaking. What we need to do is get GDP growth going again. Increased spending combined with decreased GDP are the two largest factors affecting debt right now. The anemic GDP growth we're seeing, following a period of negative growth is killing us in terms of tax revenue. The best way to bring that back up is to encourage GDP growth. Letting the taxes go up is the absolute wrong thing to do if you want to do that.

We're already (temporarily) waaaaaaaay on the wrong side of the Laffer curve. Raising taxes will have a negative effect on total revenue over time. We need to get GDP growing at healthy numbers first and *then* consider tax rates. Trying to raise taxes right now is moronic.



Those who believe this will believe as you do. Those who don't wont. Just stating your belief as fact doesn't make it so. The reality is that when a bunch of rich people lost a bunch of money it did lead to ~10% unemployment over about an 18 month time period. So clearly "the rich" do spend their money in ways which stimulates the economy. And they do it all the time, not just when the government passes a bill. And they do it to such an extent that 5% of the working population lost their jobs when one sector of our economy lost a bunch of that money.


Want to rethink the whole "trickle down economics doesn't work" bit? Cause it's getting really stale, especially when there's so much abundant evidence that it does in fact "work". You just don't see it. Most likely because you're looking in the wrong locations.

Edited, Sep 28th 2010 5:37pm by gbaji

Fair enough, although, the only people I've ever met who made decisions weighing heavily on what capital gains taxes they were going to have to pay, were idiots. They were the leeches of a wealthy family.

Most investors are going to chase the profits, with only a mild cursing at the capital gains taxes. Mind you, my circles only include the rich, not the filthy stinking rich.

Whoa, hold on. This one doesn't have to fall under either. He could be this and one of the others.

Edited, Sep 28th 2010 10:14pm by Uglysasquatch

Allegory's going to start wearing a top hat and monocle, grow a moustache and put some hotels up on old Park Lane.

I'm sure all of the people in the area who made over $50k/year and bought massively overpriced homes here in Central Oregon (there not being any that weren't at the time) would beg to differ with you, if they had time to spare from handling being foreclosed on.

Sure! I mean, a bag of M&Ms is great so it stands to reason that I should eat a billion M&Ms, right?? But a billion M&Ms isn't good for me at all so this must mean that I shouldn't eat any M&Ms!! There's no options in between or reasons not to pick an extreme!!

Wait...

Edited, Sep 28th 2010 9:20pm by Jophiel