Time to Talk About the Buffett Rule

[iris lily]

... It might be in MY interest, but it is not good for our country or fair to working people.

Wait, so YOU may support issues that are best for the country but are not in your immediate financial self interest? Yet you malign voters in flyover country who do the same. You've said that many voters do not truly understand the issues because they vote against themselves, and you talk about them as if when they become informed or smarter they'd allow Nanny G to do what is best for them.

I guess it's ok that persons of superior intellect recognize issues that are best for the country as a whole and lobby accordingly, but poor fools in Kansas need to just give in to Nanny G who has only their best interests at heart. There's no accounting for their distaste of that teat.

[loosechickens]

You may miss the point, Iris Lily. It is possible that they may be both voting against their own self interest AND against the society and their country as well, after being shrewdly manipulated by a few emotional hot issues, like guns, gays and religion. And in the interest of a small handful of extremely self interested folks who would sell their country down the river without even blinking as long as the money and power is held in their hands. It's not rocket science. G'nite

[bae]

Maybe you just need Dick Cheney's or Mitt Romney's tax attorneys, bae, and they can show you how to have tens of millions in income every year and pay less than 15 percent in Federal taxes. You may be paying way too much.

Come now. It is trivial to arrange that, it's in the tax code, all simple and easy, with no smoke or mirrors required.

But that's not the sort of bogus mysterious tax loophole secrets the class warfare fans keep trotting out.

As you well know.

[peggy]

If it's so simple, bae, then why hire/gain access to armies of the best tax attorneys in the country? Anyone smart enough to amass great wealth surly can do a simple return with basic instructions. How many thousands and thousands of pages is the tax code? Surly there is one or two little loopholes tucked in there for which we hire armies of the best tax attorneys in the country.

[flowerseverywhere]

I am surprised at the level of personal attacks that are taking place here.

Don't a lot of states as well as the federal government give you a tax credit for certain things you invest in that are for the good of society? I am thinking historic preservation projects, low income housing, energy projects (like windmills) or other clean energy projects. Also, some people invest heavily when they do have income in tax free bonds. What about charitable deductions, too. If you have enough money you can donate a lot to charities. Even at my middle class income charitable deductions make a difference, although we are the middle class who pays tax.

I recently read a book by Neil strauss called "emergency" and he outlined how difficult it is for Americans to have offshore accounts and secret Swiss bank accounts today.

[Gregg]

There hasn't been this much hysteria on the right about socialism, commies, Karl Marx, etc., since the days of ole Joe McCarthy...

Hysteria is a little strong, at least if you get outside the sensationalist, fear monger media and go to the sources where average people speak their minds. Here, for example. My question is this LC, is it just possible that there is a valid reason so many folks are chiming in on this debate (nationally)? There are apparently millions of people who think there is. They can't all fit neatly into one of the caricature portrayals. Only a few could be great manipulators hell bent on ruling the world. A few more might be apathetic super-rich. None I know are zombies blindly following the landed gentry. None, to my knowledge, are inbred. Etc. Overall, it's just not a group of people that are generally slow on the uptake.

Yes, some of their (our) words have been heard before, but I would suggest your responses here are also delivered with a familiar drumbeat. It's worth stepping back a little and asking just what it was that raised the red flags. Are you really sure there aren't legitimate underlying issues that are making your opposition nervous and that it is nothing more than partisan paranoia? Dismissing the idea that "the state" is overstepping its authority is, at least according to much popular literature, what allows the state to do that very thing. The reason the watchdogs are cautious is because once you surrender any fraction of liberty its really costly to get it back.

Ya gotta chuckle.....because one thing the Republican very, very rich are really good at is marketing. And they market their story very well.......

It's true. Republicans are much better at marketing than Democrats. If the Dems were better they would immediately publish an extensive list of very wealthy donors who intentionally overpaid their taxes. You know, the ones who wrote that big 7 or 8 figure check over and above what they owed because their secretary paid more and the tax code just didn't offer any other way for them to chip in their fair share. It's a really long list....right?

[ApatheticNoMore]

I am surprised at the level of personal attacks that are taking place here.

yea really, now everyone is a Marxist.

Don't a lot of states as well as the federal government give you a tax credit for certain things you invest in that are for the good of society? I am thinking historic preservation projects, low income housing, energy projects (like windmills) or other clean energy projects. Also, some people invest heavily when they do have income in tax free bonds. What about charitable deductions, too. If you have enough money you can donate a lot to charities. Even at my middle class income charitable deductions make a difference, although we are the middle class who pays tax.

Actually it is VERY HARD to get charitable deductions to make a difference if it is your only itemization. You have to give A LOT to charity on a middle class income to do that. For single people the standard deduction was $5,800, $11,600 married. So .... if your single and give $6000 to charity have at it, or married and give $12,000 to charity. Most middle class people are not giving that much to charity (in fact it beats what many contribute to their own retirement accounts which of course aren't itemizable ). See what I mean most of these deductions only make any sense at all to the middle class if you are able to itemize.

Hysteria is a little strong, at least if you get outside the sensationalist, fear monger media and go to the sources where average people speak their minds. Here, for example. My question is this LC, is it just possible that there is a valid reason so many folks are chiming in on this debate (nationally)? There are apparently millions of people who think there is. They can't all fit neatly into one of the caricature portrayals. Only a few could be great manipulators hell bent on ruling the world. A few more might be apathetic super-rich. None I know are zombies blindly following the landed gentry. None, to my knowledge, are inbred. Etc. Overall, it's just not a group of people that are generally slow on the uptake.

Yes they may get a world with no government benefits, but I'm not sure most will actually like it when they do. Now there is plenty, plenty, of government involvement that I can do the unintended (only I suspect it's not) consequences analysis on. Like the government basically owns the housing market by now. Was that necessary? Were private (at least nominally private aka the banks) lenders really some horrible horrible thing for the housing market? I dont' think so. Was there perhaps some freezeup in lending, yea but more so, noone is going to lend at conditions that keep current housing prices (especially in bubble markets) propped up. Enter the government. Was this a bailout? Yes I think so. Ok but back to my point, the things that are going to get cut are ultimately not things like this, it's ultimately social security and so on. People will have a world that no tax revenue funds, but will they like it? The ultimate truth is most people have not saved enough to do retirement alone with no social security. A few may have pensions (oh the irony if the right wing charge to cut ends up being mostly cheered for by those with government jobs!! who aren't even making it in the private sector), most people even the savers (and many arent' savers), but even the savers will not likely end up accumulating enough on the only sometimes matched 401k and so on to do retirement alone. So how to you fund the government if noone is willing to pay taxes? 30% like I said is not much more than my only middle class income is paying, is somewhat progressive. Now if the entire charge to defund government was aimed: we'll do the least damage to the poorer people in society while doing so, then hmm, as in first we'll defund everything benefitting the richer people, these farm subsides to giant agribusiness they have to go first, department of energy subsidizies to fossil fuels have to go first, etc. etc.. Then I think the poor would still be hurt by government defunding but if at least the aim was to do the least damage to them while attaining libertopia it would be one thing. But that's not the way it is going to play out. In fact the average persons money has alrelady been stolen in so many ways but they dont' know. The BIG ENTITIES have ALREADY been bailed (the banks etc.) with money we did not have (on debt, on money creation). And now there will be nothing left for joe schmoe poor or middle class, and we'll make sure no taxes will even be paid so that there will be anything left.

Dismissing the idea that "the state" is overstepping its authority is, at least according to much popular literature, what allows the state to do that very thing. The reason the watchdogs are cautious is because once you surrender any fraction of liberty its really costly to get it back.

Where was the outcry on NDAA? Oh I know many people were against it in principle and that is good, but even then how much did they do? I'm sure a few did a lot, most did not do much. I wrote my congress people, the president, called them, went to a protest (in which everyone left etc. ). I didn't do enough, how many even did this? The ACLU is in one constant never ending battle for our civil liberties these days (and I don't just mean some lefty issues the ACLU may get involved in, I mean REAL civil liberties fights, on what I would almost universally consider civil liberties). How many know? How many care? But 30% taxes are the epitomy of government tyranny, reallly? Taxes especially very direct ones (not hidding somewhere 50 miles deep within the tax codes) even compared to another way the government takes your money (inflation and money creation) are benign. It's much easier to just plan to hand 30% over to the government in taxation than it is to plan for say hyperinflation or even long run ordinary run of the mill high inflation (hey maybe especially for the middle class but hey).

[ETA: social security and medicare are currently self-funded through payroll taxes though (and if the cap was raised on the income subject to Social Security taxation, Social Security could be self-funded under current conditions pretty much indefinitely. So then you ask what is worth still funding in the Federal government that isn't self-funded? Food stamps, unemployment, welfare, other general aid, regulation of environmental/worker protections, national parks, green policies (at current far outweighed by non-green policies), medicaid. I'm not sure this actually amounts to that much money. Minimal defense? Well fine it should be less than most other countries in the world pay for theirs since it's been overfunded for years, so drastic cuts.]

[Midwest]

yea really, now everyone is a Marxist.



Actually it is VERY HARD to get charitable deductions to make a difference if it is your only itemization. You have to give A LOT to charity on a middle class income to do that. For single people the standard deduction was $5,800, $11,600 married. So .... if your single and give $6000 to charity have at it, or married and give $12,000 to charity. Most middle class people are not giving that much to charity (in fact it beats what many contribute to their own retirement accounts which of course aren't itemizable ). See what I mean most of these deductions only make any sense at all to the middle class if you are able to itemize.

Many middle class, however, are able to itemize and take full advantage of these deductions. If you have a house with a mortgage and/or live in a state with an income tax, you are probably itemizing.

With regard to your comment on retirement accounts, you don't itemize those because unless it's a roth, you aren't paying tax on them anyway. If your income is low enough, you even get a credit for those retirement contributions against your taxes.

If we want to fix the deficit, we need to fix spending and everyone needs to pay at least some income tax. The rich may, in fact need to have their rates raise. But, we also need some reforms at the other end of the spectrum.

When a significant part of the population pays no income tax, that's a problem. Despite assertions to the contrary in this thread, middle class people aren't paying 30% of their income in federal taxes.

The class warfare proposed by the buffet rule is simply a misdirection.

[ApatheticNoMore]

When a significant part of the population pays no income tax, that's a problem. Despite assertions to the contrary in this thread, middle class people aren't paying 30% of their income in federal taxes.

Well I'm 20%. I just looked at a paycheck. So it came out to 19.6% I have paid so far of my income for federal taxes when you include SS and medicare (I am currently contributing 12% to my 401k - I don't expect anyone to be impressed by that, I'm not, I could do better . But taxes would be higher without that). That's overall, not marginal. I consider my income middle middle class for living in California (it's not cheap to live here, I mean sure this income might be ALL THAT somewhere in the country but ...).

A 60k income for a family would not be easier to do here, it's doable, it's just tought. So if you want to rent a house that's 2k a month, 3k to buy. Noone on a 60k income has any business buying a house here (unless they have a good inheritence or something, then well sure, have at it). Sure you could rent a 1 bedroom for 1k, you want to raise a family in that? It's doable but if you go with the renting a house for 2k a month then maybe 500 a month in medical insurance to cover a family (and that's not the fanciest of plans). So your up to 1/2 your GROSS on housing and medical. Then are you saving anything, paying any taxes, food, car expenses etc.. Am I really supposed to be eaten up with envy if one of my neighbors is raising a family on 60k a year here and not paying a massive amount in taxes? It's not a great income, not for a family.

[bae]

If it's so simple, bae, then why hire/gain access to armies of the best tax attorneys in the country? Anyone smart enough to amass great wealth surly can do a simple return with basic instructions. How many thousands and thousands of pages is the tax code? Surly there is one or two little loopholes tucked in there for which we hire armies of the best tax attorneys in the country.

A rather bold claim was made:

... only those really, really, really rich people who have the ability to arrange their investment income into everything from Swiss bank accounts, to Cayman Island corporations, to utilization of every possible tax avoidance loophole that could have been shoehorned into the tax code by politicians anxious for that next big campaign donation from the sugar daddies.........

These loopholes do not exist, nor are the foreign account evasion techniques legal (heck, my wife used to work for the FBI tracking down funds Very Bad People had squirrelled away in that manner...).

I ask for specifics, no response is given other than generalities of the form: "well, there must be!".

For those interested, go to the Intuit Turbotax web site to their free tax estimator:

http://turbotax.intuit.com/tax-tools...ors/taxcaster/

Enter in the data for a married couple filing jointly, with no deductions at all, and $1 million dollars of dividend or long term capital gain income, and tell me how much tax that couple pays, and what the rate ends up being.... It will take you 60 seconds. I just did my own taxes, and it took mere moments to fill out the forms for this.

Now consider a second path: what happens if you invest in public-activity muni bonds...

You'd think Simple Living fans, who presumably have read and thought about "Your Money or Your Life" would know this stuff, it isn't rocket science.