Do the "rich" really PAY this much?

[kelpdiver 2]

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But we do have to pay what we owe as a country. And if we have to increase taxes to do so, it makes a lot more sense to increase them 2% on me than 10% on someone making $20,000 a year. For one thing I can better afford it, and for another, more practical reason, the government will get more money out of that 2%.

It would be easier to accept if that extra $2000 would actually go to paying the bills. My expectation, driven by established practice, is that Congress would increase spending by $3000. A recent example was the desire to respend paid back TARP money on job training benefits. It wasn't found money, it was debt in the first place.

It wouldn't be enough to make this tax surcharge a separate category of "debt bond" purchases because then DC would have more headroom before they hit the debt limit again, so still no actual incentive to cut costs.

And this is why Bill and Warren are giving that money to a foundation (Bill and Melinda Gates Foundation) that they control.

[mnealtx 0]

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This is all besides the point, which was that a willingness to see the tax rates go up for the rich does not necessarily prevent one from acquiring wealth. Any chance of your sticking to that topic?

Were you planning on ADDRESSING that topic at some point, rather than the charitable contributions?

I thought I did, but I'll do it again so there's no mistaking:

Warren Buffett support raising the tax rates on the rich.
Warren Buffett is a multi-billionaire.
Therefore, supporting tax rates on the rich is not an impediment to acquiring wealth.

Argument to authority, nice. Bogus, but nice.

If you're already a multi-(m)(b)illionaire, it probably won't hurt you because, like Buffett, you'll be diversified enough that most of your money will come from non-income sources - that's why he's able to say that he pays less tax than his secretary, btw.

Trying to get there? Yeah, that's going to impede you when you're still getting most of your money from sources that are taxed as income - why do you think IRA contributions are tax-exempt?

It also shows why the rich are leaving England, New Jersey and Maryland - the "tax the rich" crowd STILL can't figure out that the rich have the wherewithal to just move when taxes get too high...and they do.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[billvon 2,478]

>It would be easier to accept if that extra $2000 would actually go to paying
>the bills.

It, of course, will. The only time it will _not_ go towards paying the bills is when we have a surplus, which last happened around 1999-2000.

>My expectation, driven by established practice, is that Congress
>would increase spending by $3000.

Yes - which means they'd have to raise taxes even more to cover that.

As I've said about a dozen times so far, you have to do both. Cut spending to decrease what we spend, raise taxes to pay for what we spend.

[mnealtx 0]

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Yes - which means they'd have to raise taxes even more to cover that.

And then they spend even more on top of that. Then raise taxes to cover it. Then spend more. Then raise taxes to cover it.

And so on, and so on, and so on.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[billvon 2,478]

>And then they spend even more on top of that. Then raise taxes to cover it.

No; they've been reducing taxes since 1950. Top marginal tax rates:

1952 92%
1960 91%
1965 70%
1970 71%
1975 70%
1981 69%
1985 50%
1993 40%
2003 35%

That's half the reason we are so fucked. The other half, of course, is spending.

[mnealtx 0]

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>And then they spend even more on top of that. Then raise taxes to cover it.

No; they've been reducing taxes since 1950.

1967: 70
1968: 75.25
1969: 77
1989: 28
1990: 31
1993: 39.6

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That's half the reason we are so fucked.

Really?
"High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people”

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue. In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million. In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark. Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

(Table 3 attached)

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The other half, of course, is spending.

More like 7/8ths.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[likearock 1]

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This is all besides the point, which was that a willingness to see the tax rates go up for the rich does not necessarily prevent one from acquiring wealth. Any chance of your sticking to that topic?

Were you planning on ADDRESSING that topic at some point, rather than the charitable contributions?

I thought I did, but I'll do it again so there's no mistaking:

Warren Buffett support raising the tax rates on the rich.
Warren Buffett is a multi-billionaire.
Therefore, supporting tax rates on the rich is not an impediment to acquiring wealth.

Argument to authority, nice. Bogus, but nice.

Nope. Argument to or from authority states:

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1. Source A says that p is true.
2. Source A is authoritative.
3. Therefore, p is true.

In this case, p = "supporting tax rates on the rich is not an impediment to acquiring wealth". I was not using Warren Buffett as an authority to support p but as an example of p. Very different.

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If you're already a multi-(m)(b)illionaire, it probably won't hurt you because, like Buffett, you'll be diversified enough that most of your money will come from non-income sources - that's why he's able to say that he pays less tax than his secretary, btw.

Okay, here you're on more solid ground. I kind of finessed the fact that his statements in support of raising taxes on the rich did occur after he acquired most of his wealth. My assumption is that people don't usually change their core beliefs that much over their lifetime and Buffett, who wasn't born rich, probably had the same views back then.

Perhaps I'm right, perhaps not. I'd say though that the fact he's willing to give away 99% of his wealth to charity is pretty good evidence that his heart has always been in the right place.

[mnealtx 0]

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I'd say though that the fact he's willing to give away 99% of his wealth to charity is pretty good evidence that his heart has always been in the right place.

Which has exactly NOTHING to do with the argument of raising taxes on the rich.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[billvon 2,478]

>"High income tax rates inevitably put pressure upon the taxpayer to
>withdraw this capital from productive business . . ."

Yes. Zero taxation would result in the greatest business input, ignoring things like transportation and dictatorial government control (both of which are issues without things like, say, highways and foreign invasions.)

However, in the real world, businesses would collapse quickly if the underpinnings of government (infrastructure, defense, regulation, justice department etc) were removed. Thus there is an ideal level of governmental activity to support business, and thus an ideal level of taxation to maintain the best possible productivity from businesses. The extremes (0% taxation and 100% taxation) are clearly unworkable.

Thus the concept of the Laffer Curve. There is an ideal level of taxation if your goal is support of private business, with dropoffs on either side. Which is why "cut taxes no matter what!" is a foolish paradigm; cutting them to the point that our infrastructure collapses, or our country defaults on our loans, is a stupid approach.

>More like 7/8ths.

Half. Ignoring one side is just as stupid as ignoring the other. It's like claiming that spending is 7/8 of everyone's problem, and how much you make is almost immaterial.

[mnealtx 0]

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>"High income tax rates inevitably put pressure upon the taxpayer to
>withdraw this capital from productive business . . ."

Yes. Zero taxation would result in the greatest business input, ignoring things like transportation and dictatorial government control (both of which are issues without things like, say, highways and foreign invasions.)

However, in the real world, businesses would collapse quickly if the underpinnings of government (infrastructure, defense, regulation, justice department etc) were removed. Thus there is an ideal level of governmental activity to support business, and thus an ideal level of taxation to maintain the best possible productivity from businesses. The extremes (0% taxation and 100% taxation) are clearly unworkable.

Thus the concept of the Laffer Curve. There is an ideal level of taxation if your goal is support of private business, with dropoffs on either side. Which is why "cut taxes no matter what!" is a foolish paradigm; cutting them to the point that our infrastructure collapses, or our country defaults on our loans, is a stupid approach.

Funny how that's always the argument when tax cuts come up - ANY cut is going to collapse the infrastructure.

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>More like 7/8ths.

Half. Ignoring one side is just as stupid as ignoring the other. It's like claiming that spending is 7/8 of everyone's problem, and how much you make is almost immaterial.

7/8ths - if you habitually spend more than what you earn, the spending is the problem, not the earnings.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[kelpdiver 2]

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Perhaps I'm right, perhaps not. I'd say though that the fact he's willing to give away 99% of his wealth to charity is pretty good evidence that his heart has always been in the right place.

Not really. How many years does he have left to live? He was a double digit billionaire for a long time before he had this proof of heart...it seems prompted by Gates.

Zuckerberg, on the other hand, has pledged to start giving away his money now, while in his 20s. That might be a better argument to use. But again, they're opting to give to a charity, not the government, and on an incremental and voluntary basis. They can always change their mind if they don't like how the money gets used, or if they start feeling "poor."

[kelpdiver 2]

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>And then they spend even more on top of that. Then raise taxes to cover it.

No; they've been reducing taxes since 1950. Top marginal tax rates:

1952 92%
1960 91%
1965 70%
1970 71%
1975 70%
1981 69%
1985 50%
1993 40%
2003 35%

Without actual detail of the thresholds and number affected, the marginal rate doesn't tell you a hell of a lot.

[billvon 2,478]

>Funny how that's always the argument when tax cuts come up - ANY
>cut is going to collapse the infrastructure.

Who said that? Could you point me to a quote of someone who claimed that any cut is going to collapse the infrastructure?

>if you habitually spend more than what you earn, the spending is the
>problem, not the earnings.

If you habitually spend more than you earn, the problem is that you are spending more than you earn. There are two parts to that statement - "spending" and "earning" - which you yourself have just acknowledged.

Bill Gates probably spends half a million bucks a year on things like chartered aircraft, dining, art for his home, things like that. Is that too much? Should he spend less because you think that 7/8 of the problem is spending?

[kelpdiver 2]

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Bill Gates probably spends half a million bucks a year on things like chartered aircraft, dining, art for his home, things like that. Is that too much? Should he spend less because you think that 7/8 of the problem is spending?

why would you cite an example with the 3rd wealthiest man on the planet?

for most people, there is a pretty clear upper bound on earnings. You don't get to buy a Ferrari on a whim, or charter a private jet to the Bahamas. Short of winning the lottery, that's never going to be in the realm of possible.

Spending 1.5T in red ink in successive years is an example of buying ferraris. You're not going to make up that deficit with taxation.

The Clinton Administration (or for those who insist, the Democratic led Congress in 1993-94, the Newt lead Congress in 95-) got to the virtually balanced budget by doing a moderate tax increase, and effectively curtailing spending changes for the rest of the decade, coupled with a boom period. We're not seeing that sort of restraint right now, and lord knows when the two wars will end.

[dj123 0]

[reply7/8ths - if you habitually spend more than what you earn, the spending is the problem, not the earnings.

[billvon 2,478]

>why would you cite an example with the 3rd wealthiest man on the planet?

Because it's as valid as using the third poorest person on the planet. If your expenses exceed your income, then you have problems. Fix either one of those problems and you're good.

>You don't get to buy a Ferrari on a whim, or charter a private jet to the Bahamas.

Agreed; that's true for most people. And it's also true that most people don't win the lottery. Thus they have to spend within their means.

>Spending 1.5T in red ink in successive years is an example of buying
>ferraris. You're not going to make up that deficit with taxation.

I agree. You're going to make that up by cutting spending AND increasing taxation. Traditionally democrats ignore the first part of the equation; republicans ignore the second. Each is as blind as the other.

[lawrocket 3]

[Reply]
I think it's part luck, part hard work, part upbringing. You can do well with any one of those, but for most people, I think it takes a combination of all three.

[lawrocket 3]

[Reply]Dude, he has pledged to give away 99% of his wealth to charities. How much more do you want from the guy?

More to the point, he has consistently said that the rich should be taxed more as he does here.

[billvon 2,478]

>If anybody tells me I'm lucky to have my law license, I tell that
>person to go to hell. I worked my ass off, struggled the entire time and
>ultimately sacrificed everything else to get it. It wasn't luck.

Agreed. But luck also played a part in your success - where you were born, your genome etc.

>But by "we" I would mean "all of us." Not the wealthiest. All of us.

Every sane taxation plan out there has the wealthiest paying most of the cost. It's really the only way it works. Having everyone pay their share of expenditures, divided equally among taxpayers, would land a significant fraction of the US's population in jail for nonpayment of taxes, which is clearly unworkable.

So we have a progressive system where the rich pay more than the poor do. It works both to support the government and to reduce the impact taxation has on the economy, since taxing the rich decreases spending less than taxing the poor does. We can argue over how to implement that system, but that's a quibble over formulas; the underlying idea is that the rich pay more than the poor.

>This is a problem to me. "Make Bill pay extra money." "Why?" "He can."

Yes. Because the converse to increasing revenue is "Make Mitch pay more money." "He can't." "So put him in jail." That's worse; now Mitch is COSTING us $30,000 a year.

>And, if we are looking at getting out of deficit we would be looking at
>every source we can get.

Fair enough.

>If I want more revenue for my grocery store I don't turn away the
>customers who want to buy a Snickers bar - "$300 minimum purchase
>at this store."

Ah, but if you want your mall to make more money, you are better off raising the prices in your Gucci store than in your Wal-Mart.

>taxing the rich is in line with socialist/communist wealth
>redistribution policies

That's one of those meaningless catchphrases like "the government's support of the uber-rich ruling class."

>>and for another, more practical reason, the government will get more
>> money out of that 2%

>Not necessarily.

Sorry, we will. That's just basic math. 2% of 150,000 is more than 10% of 10,000.

>I fully admit that cutting spending will be bruatl and be a
>massive shock on the economy.

Agreed. A wise combination of spending cuts and tax increases will reduce the shock on the economy. Truly massive spending cuts that destroy the economy will lead us further into debt, not help us get out of debt; shuttered businesses and unemployed people do not pay taxes.

[likearock 1]

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[Reply]Dude, he has pledged to give away 99% of his wealth to charities. How much more do you want from the guy?

More to the point, he has consistently said that the rich should be taxed more as he does here.

He is an expert at tailoring his image. When a guy says, "I should be taxed more" everyone thinks, "oh. That Warren is a special kind of man."

Giving away all of his wealth to charities is a great way to ensure the government doesn't take half of it when he dies. It's the new thing - donate it to charities because then it won't go to the government. Then get the tax exemption for the charitable donations and make sure the government doesn't tax that, either.

Buffet knows that the worst place to send his earned dollars is to the government. He'll shelter it and say, "Government isn't getting it. If I can't have it it will go to my second choice."

Buffet is a genius. The Oracle of Omaha. He shelters his taxes and still looks good. Like Al Gore flying a private jet - boy, if he doesn't just say the right things!

[mnealtx 0]

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He says that the rich should pay more in taxes and I take him at his word.

Then let's see him demonstrate it... I showed how he could, above.

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Why should he give a shit about his image anyway? I certainly wouldn't if I had his money.

Because then not as many people would 'take him at his word' about the rich needing to pay more taxes.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[likearock 1]

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Why should he give a shit about his image anyway? I certainly wouldn't if I had his money.

Because then not as many people would 'take him at his word' about the rich needing to pay more taxes.

And why exactly is that important?

[lawrocket 3]

[Reply]Well I suppose if you're going to call into question the character of anyone who says something you disagree with

[kelpdiver 2]

man, it's like you just slaughtered Santa Clause.

[yourmomma 0]

"Did you know that the top one percent of American wage earners (adjusted gross income) pay about 38 percent of all our federal personal taxes (according to the National Taxpayer Union)? The top one percent, by the way, account for 23.5 percent of all income — a substantial amount, yes, but considerably less than 38 percent."

If a flat tax was implemented would those percentages drastically change ? And if they did, what effect world that have either way? I reckon if ALL income was taxed at a flat rate, those numbers would increasingly skew towards the rich paying the burden. Mike is right. Spending is the problem.