This argument is stupid. Even with Higgmond’s revised numbers, the rich couple still payed a lower tax rate than the poor couple. Even AlphaSeeker would admit that’s not fair.
NakedPuts Wrote: ------------------------------------------------------- > This argument is stupid. Even with Higgmond’s > revised numbers, the rich couple still payed a > lower tax rate than the poor couple. Even > AlphaSeeker would admit that’s not fair. The rich couple got a volume discount. What’s wrong with that?
NakedPuts Wrote: ------------------------------------------------------- > This argument is stupid. Even with Higgmond’s > revised numbers, the rich couple still payed a > lower tax rate than the poor couple. Even > AlphaSeeker would admit that’s not fair. Conservatives will argue this until they are blue in the teeth. HOW UNFAIR!! Somehow we have tricked the Layman into thinking that the poor pay no taxes and the rich pay half of everything they make. It couldn’t be further from the truth. For example: In 2007, Warren Buffett stated that his effective tax rate was 17.7%, without trying to avoid paying higher taxes, while his 60k a year secretary was taxed at 30%. The rich have the highest % of their income from capital gains and dividends, the best access to tax shelters, estate planning, tax deferral, valuation discounts, and of course widely used illegal tax avoidance strategies that couldn’t be used by the poor even if they wanted to.
higgmond Wrote: ------------------------------------------------------- > NakedPuts Wrote: > -------------------------------------------------- > ----- > > This argument is stupid. Even with Higgmond’s > > revised numbers, the rich couple still payed a > > lower tax rate than the poor couple. Even > > AlphaSeeker would admit that’s not fair. > > > The rich couple got a volume discount. What’s > wrong with that? Seriously?
1morelevel Wrote: ------------------------------------------------------- > higgmond Wrote: > -------------------------------------------------- > ----- > > NakedPuts Wrote: > > > -------------------------------------------------- > > > ----- > > > This argument is stupid. Even with > Higgmond’s > > > revised numbers, the rich couple still payed > a > > > lower tax rate than the poor couple. Even > > > AlphaSeeker would admit that’s not fair. > > > > > > The rich couple got a volume discount. What’s > > wrong with that? > > > Seriously? No, not seriously. That was a joke. I can see the merits of the arguments on both sides of this issue and kind of lean back and forth. I do get bothered though when someone skews “assumptions” to try to make his point. The issue of fairness goes well beyond the effective tax rate. For example, what does the rich couple get for the additional $40K per year in taxes? Shouldn’t that also factor into what’s fair? Should the store charge you more for a shirt than they charge the cashier at the local supermarket just because you can afford to pay more?
For example, what does the rich couple get for the additional $40K per year in taxes? They get a stable, sovereign nation, with a legal system that protects their rights, an army and a civil force that protects their property, and an economic environment that allows them to accumulate vast amounts of wealth. They get an infastructure that they can exploit to grow their wealth. In addition, as investors they get to accrue the economic value of some % of the the labor force’s efforts to accrue to their wealth. In other words, owners of assets, investors, companies etc, have workers that create economic value - lets say at $40 per unit hour of labor. The owners pay the labor force $20/ per unit hour for this economic value, and the rest accrues to their wealth, as compensation for the risk they are taking as owners. The rich should pay more in taxes to protect this institution.
It is interesting to see that the megaclass, the richest and most powerful of the top 1% is fairly split between conservatives and liberals with the conservatives losing market share thanks to Bush II. From an ideological point of view, they should be mostly ‘Forbes’ libertarian types but they’re not. But the liberal elite benefit good and well from their (D) affiliations regardless… C-C-C-Corporatist?
1morelevel Wrote: ------------------------------------------------------- > For example, what does the rich couple get for the > additional $40K per year in taxes? > > They get a stable, sovereign nation, with a legal > system that protects their rights, an army and a > civil force that protects their property, and an > economic environment that allows them to > accumulate vast amounts of wealth. They get an > infastructure that they can exploit to grow their > wealth. Doesn’t the poor guy get this stuff too? > > In addition, as investors they get to accrue the > economic value of some % of the the labor force’s > efforts to accrue to their wealth. In other > words, owners of assets, investors, companies etc, > have workers that create economic value - lets say > at $40 per unit hour of labor. The owners pay the > labor force $20/ per unit hour for this economic > value, and the rest accrues to their wealth, as > compensation for the risk they are taking as > owners. The rich should pay more in taxes to > protect this institution. I don’t think my taxes fund this part. Not saying you’re wrong, but just don’t think that’s a government service.
Its interesting to see what Buffett and Gates are doing with their donation campaign. Basically they have seen the inequity in the tax code and are encouraging all very wealthy to voluntarily give back. It pisses me off when someone that makes 10MM a year, hides/defers/shelters/ 5MM of it, they bitches about having to write a $1.75MM check - like they get nothing for it. Sure, we have our problems here. Congress wastes an as$load of money on both sides of the aisle, but you couldn’t build that kind of wealth in a lot of countries (try to build an empire as a carpet company in Botswana!) The US is still the easiest place to become a millionaire that isn’t oil land.
higgmond Wrote: ------------------------------------------------------- > 1morelevel Wrote: > -------------------------------------------------- > ----- > > For example, what does the rich couple get for > the > > additional $40K per year in taxes? > > > > They get a stable, sovereign nation, with a > legal > > system that protects their rights, an army and > a > > civil force that protects their property, and > an > > economic environment that allows them to > > accumulate vast amounts of wealth. They get an > > infastructure that they can exploit to grow > their > > wealth. > > Doesn’t the poor guy get this stuff too? takes money to make money. on average, the poor never get the opportunity to accumulate wealth beyond needs. the benchmark tax payment that the poor guy pays is just enough to not have to fear death and robbery every day. the poor man pays for cops and firemen. the extra $x that wealthy man pays, is the ability to invest in a free iraq or mass-scale US businesses. the rich man pays for infrastructure and military.
Good banter. >Doesn’t the poor guy get this stuff too? > > Yeah I think so, but they have less to protect and still pay more per year to protect it. Going back to the example: The poor guy spends $11k per year in taxes to protect his $30k in home equity and his income. The rich guy spends $53k per year to protect his wealth. We didnt say what he had but lets say it was $3 million - that makes all his gains that year 10%. He pays only 53k to protect 3 million. Only 1.7%. >I don’t think my taxes fund this part. Not saying you’re wrong, but just don’t think that’s >a government service. > Sure it is. Your taxes go maintaining our country, our economy, our legal structure, our laws, our infastructure…those things dont pay for themselves. All of those things are preconditions for USA style capitalism. You can’t have your cake and eat it too. If you want capitalism, you need to be willing to pay the price to protect the institutions that allow it.
1morelevel Wrote: ------------------------------------------------------- > Its interesting to see what Buffett and Gates are > doing with their donation campaign. Basically > they have seen the inequity in the tax code and > are encouraging all very wealthy to voluntarily > give back. > Interesting that you bring this up. Buffett is worth $47 billion according to Forbes and says he will donate 99% of his wealth before he dies. That will leave an estate of $470 million if he holds steady before he dies. If Congress does nothing, the old 55% estate tax will go back into effect next year. So, Buffett’s estate will pay $258.5 million in estate taxes. If he kept all of his money, his estate would pay $25.85 billion in estate taxes. Avoiding more than $25 billion in estate taxes is clearly a statement on the inequity of the tax code. Or maybe he just thinks he would prefer to decide who benefits from his wealth after he is gone.
higgmond Wrote: ------------------------------------------------------- > Interesting that you bring this up. Buffett is > worth $47 billion according to Forbes and says he > will donate 99% of his wealth before he dies. > That will leave an estate of $470 million if he > holds steady before he dies. If Congress does > nothing, the old 55% estate tax will go back into > effect next year. So, Buffett’s estate will pay > $258.5 million in estate taxes. If he kept all of > his money, his estate would pay $25.85 billion in > estate taxes. > > Avoiding more than $25 billion in estate taxes is > clearly a statement on the inequity of the tax > code. Or maybe he just thinks he would prefer to > decide who benefits from his wealth after he is > gone. i don’t get it. he’s still giving away $46.77B before death relative to $25.85 if he kept it all. are you calling him selfish although he’s clearly intending to get rid of an EXTRA 20 bil over what would be taken from him without donation?
MattLikesAnalysis Wrote: ------------------------------------------------------- > higgmond Wrote: > -------------------------------------------------- > ----- > > Interesting that you bring this up. Buffett is > > worth $47 billion according to Forbes and says > he > > will donate 99% of his wealth before he dies. > > That will leave an estate of $470 million if he > > holds steady before he dies. If Congress does > > nothing, the old 55% estate tax will go back > into > > effect next year. So, Buffett’s estate will > pay > > $258.5 million in estate taxes. If he kept all > of > > his money, his estate would pay $25.85 billion > in > > estate taxes. > > > > Avoiding more than $25 billion in estate taxes > is > > clearly a statement on the inequity of the tax > > code. Or maybe he just thinks he would prefer > to > > decide who benefits from his wealth after he is > > gone. > > > i don’t get it. he’s still giving away $46.77B > before death relative to $25.85 if he kept it all. > are you calling him selfish although he’s clearly > intending to get rid of an EXTRA 20 bil over what > would be taken from him without donation? Not calling him selfish at all. Trying to illustrate that his decision isn’t a commentary on the inequities of the tax system. It’s philanthropy, nothing more nothing less.
Publicly, he has stated that he doesn’t want his wealth to go to his heirs, as he thinks it is too much wealth. I cant remember when it was, but he has testified in front of Congress about how bad an idea it is to repeal the death tax. He has lobied the worlds richest to give away their wealth, to develop sustainable philanthropies. Read more at www.givingpledge.org. Look at it this way - if we can grow some very massive, self sustaining foundations to support the common good, then that is less money that needs to be raised by taxes over the long term. If its a REAL donation, it does the same purpose as taxes, but the tax payer gets to choose the destination. I have no problem with this, and its fundamentally why donations should be tax deductable (maybe even tax credits?!) My problem is when the donations go to the arts, the theatre, etc. Its really a special interest and shouldnt count…a whole other issue.
Why don’t people who want a higher tax rate just pay more in taxes? Just report some additional income.
What our federal taxes buy and their % of 2010 budget (excludes catgories comprising less than 1% of the budget): Social Security: 19.6% Rich guy paid into this but will never see a dime because his own retirement earnings will disqualify him DoD: 18.7% You can argue rich guy benefits more because he has more to lose, but try dropping a bomb on poor guy’s house and let me know if he cares any less than rich guy Unemployment/Welfare/Other: 16.1% Rich guy paid into this but will never see a dime Medicare: 12.8% Rich guy paid into this but again won’t qualify due to income Medicaid: 8.2% Rich guy paid into this but again won’t qualify due to income Interest: 4.6% Nobody benefits here except debt holders Transportation: 2.2% Rich guy probably makes out a little better here. Nice highways certainly appreciated when doing 100 in his 7 Series Veterans: 2.1% Rich and poor guy equal here State Dept: 1.5% Rich and poor guy equal here HUD: 1.5% Don’t think Rich guy’s getting much out of this Education: 1.3% Rich guy’s kids are probably in private school, but he does benefit from an educated populace. Still have to say poor guy benefits more. Homeland Security: 1.3% Same as DoD Energy: 1.2% Equal
1morelevel Wrote: ------------------------------------------------------- > > Look at it this way - if we can grow some very > massive, self sustaining foundations to support > the common good, then that is less money that > needs to be raised by taxes over the long term. > If its a REAL donation, it does the same purpose > as taxes, but the tax payer gets to choose the > destination. I have no problem with this, and its > fundamentally why donations should be tax > deductable (maybe even tax credits?!) My problem > is when the donations go to the arts, the theatre, > etc. Its really a special interest and shouldnt > count…a whole other issue. You just quoted the rationale for the Bush tax cuts.
Here are my thoughts. -Eliminate all taxes at the corporate level. It all flows down to the personal level so just tax it there once. This includes corporate income tax, payroll taxes, FICA… This would also lead to many companies relocating to the US and moving back to the US. -Eliminate all deductions and loop holes. -Tax all types of income, only once, at the same rate. Obviously by eliminating all types of corporate taxes and inheritiance taxes our tax rate would be much higher. I would be much more in favor of knowing exactly what that high tax rate is than having to do some sort of long drawn out calculation regarding all the different taxes I’m paying either directly or indirectly at different levels. -Create a negative income tax for people with income below a certain threshold. Beneficiaries would receive payments from the IRS, based on how far their incomes fell below the tax threshold. This would not necessarily be a dollar-for-dollar payment for the amount below the threshold. A dollar-for-dollar payment would create an incentive to not work.
AlphaSeeker – I would be interested in seeing some support for your line “Almost half of the country’s household don’t pay income taxes already. Shame on them…”. My guess would be that you are taking one portion of the total federal tax bill (fed income tax) and then applying ALL of the federal deductions to just this one portion.