Buffet has it right!

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riser

Illustrious
Feb 17, 2001
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http://www.reuters.com/article/2012/11/26/us-buffett-tax-idUSBRE8AP0LY20121126

I haven't been a fan of a lot of his outspoken political comments, but this one I can agree with. I believe that there should be a tiered system with capital gains. In his case, the higher earns on capital gains can pay more, leaving the normal tax rate untouched for myself and those who do not earn that much with capital gains.

Democrats for some reason are focusing on class warfare with raising income tax rates - which doesn't affect the wealthy, it affects the middle class the most. Thus, the shrinking of the middle class. If you increase capital gains for the wealthy, making $1 million or more, to say 25%-30%, I can agree with that, as long as write offs are also increased I suppose if they were to lose money as well.

This whole notion that raising income tax matters to the wealthy is such a big lie. If you had 10 million in the bank, what job would you have? I would be sitting on a beach and investing my money, not working an 8-5.
 


Buffett has it wrong. Most people with enough money to pay income taxes (which only about half of the adult population) also have some investments of some sort, even if they are sitting "inaccessible" in a retirement account somewhere. Thus they pay capital gains taxes just the same as they pay income taxes. Buffett is all about raising taxes since he has *already* earned his money. If you wanted to ding Buffett, you would have an asset tax. That's not what he is proposing. He likes being one of the elite and wants to kick the ladder he climbed up on (relatively low taxes and less regulation) so that few else become as wealthy as him and steal his fame. Do you think anybody would listen to Warren Buffett if he only made $100k a year?
 
Why is it a lie because you said so. The wealthy can afford more tax increases and it has been proven that this helps the middle class more by economists.Even Buffet agreed to this.
 
We have to be careful as to the amount/line of where these taxes take off.
One of the methods used to help fight past debt is inflation, which will inevitably come.
Currently, the middle class top earners are near the proposed income amounts, and down the road will easily exceed them, so there is truth in the statement it will eventually hurt the middle class, besides the fact, the wealthy are much like the government, where they can simply vote themselves a raise and let someone else pay for it
 
Doesnt your money get taxed in brackets already and isnt Buffet just calling for increases in the 1 mil to 10 mil bracket?

For example the first 50,000 is taxed at a low income rate. If I make more money my next 50,000-250,000 is taxed at a different rate, and then 250,000 - 1 mil is another different rate. Etc etc.

 


He is talking about raising the Capital Gains tax, not Income Tax. raise it for people making over $1 million in capital gains. He doesn't have an income, he lives off capital gains. He's a long term investor, not short term.
 


Marv, if you had a billion dollars in the bank, would you have a job getting paid by someone else? Or would you sit around investing your money and let it work for you? Income tax is earned income within a year. Capital Gains is income earned beyond a year. If you invested $10,000 and it went up to $15,000 in less than a year and you withdraw the money, this would count as income. If you waited until after that investment ages 1 year, it becomes Capital Gains and is taxed at a lower rate. This is how the wealthy get around it.. they don't play in the realm of Income Tax, they play in the realm of Capital Gains.

What he is saying is increase the tax rate on people making over $1 million in Capital Gains, not income tax - those people don't have an income since they're not working.
 


Yeah, which is why you see someone making like $95k being taxed at a lower rate than someone making $80k. If you put in tax deductions you can have a lower tax rate. For 5 years straight my effective tax rate was 13-14% because of tax deductions I was using. I should have been in either the 25% or 28% bracket, but deductions dropped me low enough.

As far as capital gains, it currently isn't tiered. It is 15% across the board. It could potentially go up to 25% to 30% under Obama's plan. Making it a tiered system would be better as someone like myself wouldn't get taxed at a higher rate for my investments. You and I get taxed at the same rate as a guy making $10 million in capital gains.
 
Yeah, when I saw that without the limits, I was pissed because I would invest heavily in divident granting companies, especially when you don't have a lot of money.

To be fair I think Buffet is right about.. and I mean temporarily.. .raising the cap gains rate. Now with the tax raising issue settled, we can move on to productive things like cutting spending.
 
The banks would have to lend more because of the reduced investing? I don't know that would be the complete case. Some would stop investing, others would continue.

I'm looking short term. This settles the dispute about raising taxes. Now that it has been settled we can move into cutting spending where the real meat of the issue exists. A short term temporary tax rate hike on capital gains, for the $1 million plus crowd won't be dramatic. In fact, many might not even realize it if they don't sell their stocks.

That being said, the capital gains tax is assuming these millionaires are selling their stocks off during the year. If they don't, the tax doesn't generate anything. Make it 100%, if no one sells, no revenue is generated via the tax.
 
I dont see why a tiered system wouldnt work....

Correct me if you see some flaws.

The first 50k is taxed at 10% the next 50k-250k are taxed at 20% the next 250k-1mil is taxed at 30% 1mil-10mil is taxed at 35% 10mil+ is taxed at 40%

so if I make 75k this year Ill pay 10% on the first 50k and 20% on the next 25k.

 
Well that seems to be the catch, with enough money you can find a way around the tax structure.

But you can see how a tiered system like that would work. I just pulled those numb3rs out of my @55.

Didnt Romneys father pay an effective tax rate of 40%?
 


40% is excessive. Keep in mind that this money was already taxed once as income in most cases. From there, the person has to invest that money again and take a risk on that investment. A reason that capitals gains was lowered by Bush was to encourage people to save more money. If people were to save more money and invest it, they would be better off financially. For the first 10-20k earned, 0% would be nice because that's where most people in lower to lower middle class would fall early on. Older people might make $70k a year on their investment and pull it out or reinvest into something else.

Let's say you make money on something, you cash and and reinvest it. You have to pay income or capital gains on that tax, even though you reinvested it. A two tier sytsem would work. 15% for under $1 million, 25% for $1 million or more. 30% starts to push some investors away. 25% keeps investors in the game as they only lose 25% of their investment to taxes. Also consider the amount of work that these people are doing with their own personal savings in order to make more money. The gov't sits back and collects income on all that.. which is different than working in a job and being taxed. You're earning there, as opposed to investing your earned money.
 
The Fair-Share Balanced Budget Method

Article(s) ?

“Section 1. Congress ought to raise money by borrowing, but when the money arising from imposts, duties, and excise taxes are insufficient to meet the public exigencies, and Congress has raised money by borrowing during the course of a fiscal year, Congress shall then lay a direct tax at the beginning of the next fiscal year for an amount sufficient to extinguish the preceding fiscal year’s deficit, and apply the revenue so raised to extinguishing said deficit.”

“Section 2. When Congress is required to lay a direct tax in accordance with Section 1 of this Article, Congress shall immediately calculate each State’s apportioned share of the tax based upon its number of Representatives as allotted by the Constitution, and then notify the Executive of each State of its apportioned share of the total tax being collected and a final date by which said tax shall be paid into the United States Treasury.”

“Section 3. Each State shall be free to assume and pay its quota of the direct tax into the United States Treasury by the final date set by Congress, but if any State shall refuse or neglect to pay its quota, then Congress shall send forth its officers to assess and levy such State’s proportion against the real property within the State with interest thereon at the rate of (?) percent per annum, and against the individual owners of such property. Provision shall be made for a 15% discount for those States paying their share by (?) of the fiscal year in which the tax is laid, and a 10% discount for States paying by the final date set by Congress, such discount being to defray the States’ cost of collection.”

So if Vermont forks over 36,781,609,195$ we are in the clear? I know how much you guys love this could someone explain this intention? And why hasnt it been enacted?
 


Even with 40% I bet the returns you would see would still blow away bonds.
 


The Federal Debt per person would be $40k to $44k per person in the US. Enacting this would pretty much tax a vast majority of people at 100% in order to pay off debt per year.

330,000,000 people in the country, babies and all. Federal Deficit is what? 1.4T this year? 1,400,000,000,000,000,000.
 


1,400,000,000,000 ?
 
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