Time to Talk About the Buffett Rule

[ApatheticNoMore]

This fact bears repeating. Often. So we can finally put this meme about the 47% who don't pay federal income tax in context: they don't pay because They Are Too Poor. Why is that something to be upset and jealous about?

Again it is not that easy, like I said California minimum wage, 40 hours a week, standard deduction, no kids, gets you in a position you CAN'T ESCAPE federal income taxes, not even with the earned income credit (and yet that *IS* poor, I'm definitely going to define living here on minimum wage as poor ok). Those who escape federal income taxes might be poor but claiming all the poor are escaping federal income taxes is just not true. I think people who criticize "people not paying taxes" think it's about poor people, but they are actually criticising deductions, since that is what makes the tax rate zero, just being poor is not going to do it.

[mm1970]

How many times should the same dollar be taxed? If you, as a partial owner of a company, invest your money in the form of stocks or bonds, which then generates a 10% annual return, should it be subjected to the highest corporate tax rate in the world prior to you receiving it only to then have it taxed again at a 25 to 30% rate? Exactly how many slices of the pie should the government take before you are allowed to enjoy the crumbs?

Well, that's the big question, isn't it? For me anyway.

WHEN is it the same dollar? If you invest $100 and you earn a 10% return, that $10 - is that the "same" money or is it NEW money? Right or wrong, the government mostly taxes you whenever money changes hands. So you earn your income and get taxed. You buy goods with that money and it gets taxed. You save the rest. Your savings get loaned to companies who make a profit and they (sometimes) get taxed. The companies pay their employees who pay income tax. Your savings net you a return and you get taxed on that.

You die and leave your money to your kids, but it changes hands (it's new money to them), so it gets taxed. When is it the same dollar and when is it a new dollar?

[flowerseverywhere]

well it has served one purpose, it has given more fuel to the partisan fire.

If it was passed, this would be a very small amount in relation to the bigger money picture. Like rearranging the deck chairs on the Titanic. Do something that might make a real difference in the long run.

[mtnlaurel]

Again it is not that easy, like I said California minimum wage, 40 hours a week, standard deduction, no kids, gets you in a position you CAN'T ESCAPE federal income taxes, not even with the earned income credit (and yet that *IS* poor, I'm definitely going to define living here on minimum wage as poor ok). Those who escape federal income taxes might be poor but claiming all the poor are escaping federal income taxes is just not true. I think people who criticize "people not paying taxes" think it's about poor people, but they are actually criticising deductions, since that is what makes the tax rate zero, just being poor is not going to do it.

Damn, I just looked up California Minimum Wage = $8/hr.
That's $64 a day. $320 a week. $16,640 Gross over 52 weeks in calendar year.

..... So blood CAN be squeezed from a turnip!

That's just not right to me.

[Gregg]

I am against a flat tax because the wealthier one becomes the lower percentage of income must be spent on the necessities of life (food, shelter, health care, clothing, etc.) Because they have more disposable income (by definition income they can fritter away in any manner they choose,) I feel the fair thing is to expect them to pay a heavier burden in tax.

I've never really been able to think of that approach as "fair" bunnys. First, knock out the extreme. If someone is below the point of being able to provide for themselves they won't pay taxes. Period. Moving on (with a somewhat oversimplified example, but you get the idea)...

Let's say I'm middle class and you are successful beyond your dreams. I make $100,000/year and you make $100 million. I spend 10% of my income ($10K) on food every year. Under your premise you would need to spend $10 million on food or you would be penalized. To take it all the way, what happens if you actually DID spend 10% of your income on food, just like I did. It certainly wouldn't be fair to penalize you then, would it?. What about other (Federal) expenditures? We both drive our cars on the same highways. Why should it cost you $10.00 in taxes for every mile you drive when it only costs me $.10? What about defense? Does the military do more to protect my house than it does yours? Probably not. Even under a flat tax you would be paying exponentially more for all those services than I would. If the flat tax was 15% I would be paying $15,000 per year and you would be paying $15,000,000. Do you think you would be deriving 1,000 time the benefits I would or could it be that you are, in effect, subsidizing the benefits I get? At what point do you guess you would get tired of doing that?

My belief is that when "defining" fair as many in this thread have inquired about, it is inherently more fair for those who make more money to be expected to pay more and a higher percentage of their income (regardless of how it is "earned") to taxes.

If I had a deer in the headlights emoticon I would insert it here. I absolutely agree that there is a symmetry to make more, pay more, but in terms of absolute dollars, not dollars AND percentage. This country provides a lot of opportunity to its citizens. Those that have the wherewithal to take advantage of it owe something for the opportunity. That is why an approach like a flat tax makes sense. If you want to make $100K or $100M you know that part of it will go toward supporting the opportunity you had for the next guy. And yes, under that plan the more you make, the more you pay. What I can not stomach is the Robin Hood approach of forcibly taking ever larger slices of someone else's pie as they become successful. Fair is to set the slice taken as the same size (percentage) for everyone. If your pie gets bigger so does the slice you hand over, but the approach of trying to make everyone's bite end up the same usually doesn't work out so well.

[ApatheticNoMore]

If it was passed, this would be a very small amount in relation to the bigger money picture. Like rearranging the deck chairs on the Titanic. Do something that might make a real difference in the long run.

What exactly would you propose, going after social security? Tax cuts are a large part of why we are in deficits. Now you might propose something like ending the wars (Ron Paul actually said he could massively reduce the deficits with no Social Security cuts). I would definitely agree with ending the wars, but I'm not sure even it is without economic consequences, see I think they have decided to conquest the whole middle east for oil for strategic reasons (really better than green energy and conservation? really? is it really really what we want? was the choice ever given? who bought out that choice - Exxon?) Maybe in order to save revenues abolish homeland security? That I would like to see . Hey in order to save money on the deficits we would like to get rid of fascist policies ... wouldn't that be nice. But maybe even fascist policies are strategic :\ Anyway is anyone proposign this? (besides Paul)

Now to some extend the government may not need any of our taxes at all and can keep spending, when it can just print money afterall, but hmm .... it's doing it to some degree and well it did it for the banks (not TARP, what the Fed did).

[loosechickens]

O.K. Sorry, folks.....having to do a major edit on this post because what I stated as a yearly amount is really what is likely to come in over ten years......post is now edited to be accurate.

Let's see. The same Republican Congressmen and commentators who are sneering at this 47 billion dollars over ten years that the Buffet rule would bring in to the Treasury, as though it's chump change, not enough money to even matter, etc., are the SAME folks who talked of a tiny percentage of that amount of dollars going to Planned Parenthood as a HUGE amount of money, a significant expenditure that the country simply couldn't afford.

So, perhaps a little "reframing" is in order. The money that the Buffet rule would bring in EVERY year, would be enough to fund many years of allocations to Planned Parenthood, you know, the ones that represented such a HUGE expenditure of taxpayer dollars every year, that we couldn't "afford". And since that money going to PP was considered SO significant an amount of money, perhaps that will help them realize just how useful the Buffet rule might be as a way of raising needed revenue, since it is so much in excess of that amount.

So, sometimes 47 billion dollars is just an insignificant dribble of money, and sometimes, something that is a tiny fraction of that amount is HUGE.........I guess everything really IS relative. Or how, exactly, one wants to frame thoughts about dollars.

And over, say, TEN years, or more, well that "chump change" that isn't going to make any difference supposedly, will add up to a LOT, unless you are one who throws around 47 billion dollars as just "insignificant" and the folks who are paying it wouldn't even notice the little burp in their balance sheets.

As someone said once.......you can fool some of the people all the time, and all of the people some of the time, but you can't fool all of the people all of the time, and the fooling that has been going on in these past few decades while the very richest of the rich have gathered ever more for themselves at the cost of the middle class, may be about to end.

[flowerseverywhere]

What exactly would you propose, going after social security?

no. But a more balanced approach is in order. Not the smoke and mirrors of proposing ideas to get votes, especially when you know there is no chance they will get passed. Increasing taxes for the rich may not be a bad idea, however doing that and not reducing spending is.

You noted a lot of good ideas to decrease spending. The postal service is holding rallies now to protest stopping Saturday delivery. That would be a good idea as they operate at a deficit. Raising rates for junk mail to help the postal service.

what about duplicate services. " The GAO says the government might save tens of billions of dollars simply by eliminating duplicate and overlapping federal programs."

http://www.usatoday.com/news/washing...ing/53275924/1

wasteful government spending, the 2011 wastebook released by Sen. Coburn. Some of this might be funny if it wasn't so tragic. :

http://www.coburn.senate.gov/public/...3-c25a5e194365

just like a household, city, state or business they need to figure out how to spend less.

[Spartana]

From a piece on CNN:

"A minimum 30% tax on million-dollar incomes won't do much to eat away at the nation's debt, it won't create jobs, and no one expects it to get through the Democratic-controlled Senate, much less the Republican-majority House."

So what do you think? A good rule with no support? A misguided attempt by people who really don't understand the economy? Is it now just the President's turn to play some election year politics?

Personally, I think it started out as the second and moved to the third. 60% of Americans disagree with me (Gallop: 60% support it, 37% oppose).

Haven't read all the posts yet, but I think the wealthy should pay taxes on the same scale and manner based on their income as everyone else with one (and only one) exception - job creation. If they can prove that they created X number of jobs in this country (no off shoring) to US citizens (no illegal aliens or foreign nationals) then they should get some sort of tax break. And I'm talking about "real" jobs, not just using their money as buying power for high end luxury goods and services as a means of "job creation". That doesn't cut it. It takes the same amount of labor to create a Rolls Royce as it does a Hyundai Accent. For the cost of buying one Rolls, you could buy dozens (hundreds?) of Hyundais thus creating many, many more jobs. Now I'll read all the posts!

[flowerseverywhere]

O.K. Let's see. The same Republican Congressmen and commentators who are sneering at this 47 billion dollars per year that the Buffet rule would bring in to the Treasury, as though it's chump change, not enough money to even matter, etc., are the SAME folks who were talking of the 300 million dollars going to Planned Parenthood as a HUGE amount of money, a significant expenditure that the country simply couldn't afford.

LC, where did you get that number? Even over ten years it is big, however I found much lower numbers. And I don't dissagree with what you are saying.

http://www.reuters.com/article/2012/...83F05H20120416
"The Buffett tax would raise $47 billion from 2012 through 2022 if imposed on taxpayers earning more than $1 million, or $500,000 for married individuals filing separately, according to a March memo from the Joint Committee on Taxation, a nonpartisan body that estimates tax changes for lawmakers."