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Ear to the Ground

Buffett Questions Tax Gaps

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Posted on Jun 27, 2007
Pennybags
theonion.com

The vast economic rift between the top and bottom tax brackets is a major cause for concern,  and it’s not just those at the lower end of the income spectrum who are paying attention. 


Washington Post:

Warren E. Buffett was his usual folksy self Tuesday night at a fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a system that allows the very rich to pay taxes at a lower rate than the middle class.

Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

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archeon of thrace's avatar

By archeon of thrace, June 29, 2007 at 12:40 pm Link to this comment

I agree everyone should have an opportunity to amass as much wealth as possible.  I don’t however agree that this wealth should be passed on to sucessor generations without a substantial portion of this wealth going back to the greater society in the form of a tax that could be used to subsidise the taxes poor people pay.

Take the top end of the wealthy class, even if for example someone has a fortune of 500 million, if the estate tax on this is 50% they still get to pass on $250 million, it they have 5 kids each one still gets $50 million, seems pretty good esp. when it is free money.  It may even seem generous when these kids had all the other priveledges of wealth like: education, contacts, and access to the power/money class all their lives.  This is far more valuable than the “money”, the priveledges virtually guarantee the oportunity and ability to make more money.  Estate taxes should be graduated, and on fortunes over say 10,000,000 should approach 60%.

When some people are struggling to buy medication for thier children on 10000 a year, it is an obsenity that some one making 46 million is only paying 17%.  BTW this is not Warren Buffets fault, the fact that he brings this up himself is and indication that this is wrong.  The fact that his receptionist who probably makes less than 10% of Warren’s income pays 30% is truly insane.  I wonder if the receptionist makes 1% of what he makes? - 10% of 46million = 460000, 1% = 46000.

If we don’t tax income in a way that ensures the higher income earners pay a greater percentage, then we must tax the estates after these people die.

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By ~B~, June 29, 2007 at 12:25 am Link to this comment

#82121 by ctbrandon on 6/28 at 9:03 am
(31 comments total)

“Paying income taxes AT ALL is unconstitutional. We have been taxed by the government illegally our entire lives. Research it, its true.”

or

#82260 by 911truthdotorg on 6/28 at 8:09 pm
(116 comments total)

“There is NO law requiring us to pay a Federal income tax. The gov’t has been robbing us all our lives. “


Neither of you offer your grounds for these claims. Videos aren’t really conducive to the conversation at hand as I would expect citation to be offered for proof.

But I can offer this for you guys…

http://evans-legal.com/dan/tpfaq.html#direct

It pretty much covers most tax protester falacies. I’m not a big fan of taxes myself. But this site makes a pretty tight case to the arguments I always heard.

B

http://b-political.blogspot.com/

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By 911truthdotorg, June 28, 2007 at 9:09 pm Link to this comment

The IRS and the Federal Reserve need to be abolished completely! End of story.

There is NO law requiring us to pay a Federal income tax. The gov’t has been robbing us all our lives.

Please watch this Google video on the subject:
America: Freedom to Fascism

Also 9/11 Press for Truth and Loose Change 2nd Edition

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By ~B~, June 28, 2007 at 8:13 pm Link to this comment

#82160 by DirtyFraudsAndLiars on 6/28 at 11:34 am
(Unregistered commenter)

“Taxes on dividends and capital gains are lower than income taxes to ENCOURAGE INVESTMENT!”

That is an economic wives tale. By your same logic dropping income taxes would make more people work. The truth is this is protectionism for the wealthy. 

“Investment creates jobs.”

While this is partially true - let’s take a look at logic. We allow MILLIONS of illegal workers (who don’t pay taxes) to flood our nation so that we can create jobs for them by lowering taxes on the wealthy who employ them? This is good for the nation how?

We don’t need to create jobs we need to create careers (where people make more than the slave wages a job pays).

“Buffet may have been a successful businessman, but one thing he doesn’t understand is that he would NOT have ever achieved his wealth with taxes as high as he seems to want them.”

Good. Perhaps that is the point your missing. It is FAR too easy for the wealthy to play compounding games and avoid taxes. Billionaires are a sign of failure to our nation in my opinion. All billionaires prove is that they don’t know how to spread the wealth to their employees who made them rich.

“Besides, if Buffet really wanted to, he could do two things:

* Deliberately overpay his taxes (the Treasury will take it)
* Give the portion of his wealth that he thinks should be taxed away to charity

It’s really that simple.”

True, he can also make a donation towards the public debt. Would you? This government wastes money like it grows on trees (oh wait with the Federal Reserve it almost does). If I were rich and old I would leave my money to charities that have a proven record of getting results with their resources UNLIKE the Federal Government that can’t fight drugs, terrorism, stop sick lawyers on watch lists, find a way to balance a budget, ad nauseum.

It really is THAT simple.

B

http://b-political.blogspot.com/

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By DennisD, June 28, 2007 at 7:56 pm Link to this comment
(Unregistered commenter)

The largest group of consumers in this country are the poor and middle class. They drive the economy and make the wealth of Warren Buffett possible. As far as the wealthy creating jobs, most jobs created here are from small businesses not the conglomerates everyone wants to give credit to that are subsidized by our taxes as they outsource our jobs.
Warren can certainly afford to be taxed at a higher percentage than his secretary and being the intelligent man he is, he knows the destruction of the middle class due to the disparity in our tax code will be the end of it all for him as well as us.
Whatever happened to a flat tax with no exceptions for anyone above the poverty level that works or does business in this country?
Oh yeh, I forgot for a moment that our benevolent Congress wouldn’t be able to hand out exemptions in a system like that for fat campaign contributions. That kills that idea.

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By Dr. Knowitall, PhD, PhD, June 28, 2007 at 4:41 pm Link to this comment

Help me out here.  Are you being serious, THOMAS BILLIS?

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By DirtyFraudsAndLiars, June 28, 2007 at 12:34 pm Link to this comment
(Unregistered commenter)

Taxes on dividends and capital gains are lower than income taxes to ENCOURAGE INVESTMENT!

Investment creates jobs.  The more money people have to invest, the better.  Raising taxes like Buffet suggests would leave less money for investment by everyone from multi-millionaires to the office worker investing a portion of his income in an IRA.

Buffet may have been a successful businessman, but one thing he doesn’t understand is that he would NOT have ever achieved his wealth with taxes as high as he seems to want them.

The accumulation of wealth is the result of compound growth.  Compounding a lower principal amount as the result of higher taxation would result in less wealth accumulation not just by Buffet, but by everyone.

Besides, if Buffet really wanted to, he could do two things:

* Deliberately overpay his taxes (the Treasury will take it)
* Give the portion of his wealth that he thinks should be taxed away to charity

It’s really that simple.

Perhaps Buffet is getting a bit senile in his old age.  He’s pushing 80.

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By ctbrandon, June 28, 2007 at 10:03 am Link to this comment

Paying income taxes AT ALL is unconstitutional. We have been taxed by the government illegally our entire lives. Research it, its true.


brandon
http://www.actforyourself.org

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By GW=MCHammered, June 28, 2007 at 9:58 am Link to this comment
(Unregistered commenter)

Le$$ Government = Lower Taxes for all

Guest Worker the Bush Royal Society today!

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By Margaret Currey, June 28, 2007 at 8:59 am Link to this comment
(Unregistered commenter)

Some people remember where they came from and where a lot of Americans came from was/is Ireland.

Why should those who afford to pay taxes get a bigger break than the middle class, the answer is so they can contribute to Bush and Company, it seems strange that the corporations hire illegal workers (of course they contract out) pay them at less wages than Americans, and then pull in a larger income the gap is probably 400% more than those at the bottom.

The saying Greed is Good must apply here to the corporate leaders.

They are sucking us dry, outsourcing, no capital gains, buy the government the list goes on and on, soon this country will be no different than Mexico or the other S.American countries.

In those countries there is largely no middle class.

This president does not care about middle american incomes, he does not care about the parks lets oil interests drill on public land.

The whole gang should be Impeached, starting with Gonzales then going on to Chaney and then going after the figurehead Bush.

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By ~B~, June 28, 2007 at 8:57 am Link to this comment

Lol well Thomas Billis I have to agree with “I love Warren Buffet as much as any straight man can love another”.

He is truly a beacon in the land of darkness. However, your other two choices make me wonder about your logic. Gates is one of the scariest rich monopolists we have ever had. He has tried EVERY dirty trick known to the rich - and has gotten away with most of it. If anyone SCREAMS for a little reality in the incomes of individuals it is Gates. Turner and his propaganda machine (and his lovely wife Janie) are entirely complicit within the scope of problems this nation faces.

This nation needs a rewriteof every tax law. The rich pay 50% minimum. They (and their businesses) are the entities that use (and require) the infrastructure that the average citizen pays for.
The estate tax is frozen at $2 Million per beneficiary, everything beyond that is taxed at 50%.

I am fully aware of the fact that most Republicans will claim the estate tax is really a second tax on income. While this o n the surface may appear to be true it is usually not the case. In most cases involving large amounts of wealth the stocks or other investments have NEVER been sold (therefore never taxed) then this money after being allowed to grow for years - decades even - tax free is allowed to be passed on tax free as an estate (if Bush gets his way). Furthermore, everything is a “second tax” to income if you want to get right down to it. Sales tax, excise tax, etc. all tax the same income it is just done at different points.

It comes down to this. You go to work for 30 years, paying taxes the whole time. Your money does not get a chance to work tax free. Now take an investor (which all billionaires are). He puts his money in and makes more year after year as his stocks increase in value. He pays no taxes unless he sells and stays sold (if he rebuys within 30 days this is not a sale it is a wash sale and doesn’t get taxed). He chooses never to sell the majority of his shares. When he dies he can pass on those stocks and they are then revalued at the closing price on the day of death—thereby allowing the rich to avoid ALL tax on the income that the original rich person earned. In fact, the only tax the beneficiary will pay is if the estate goes over $2 Million.

So why should the stock holders get such an amazing tax break? Why should a wealthy investor be able to work his cash (and the governments cash that has yet to be taxed/collected) for his entire lifetime THEN after death STILL not pay any taxes on that income? This is how the law stands now - without Bush’s changes. Bush just wants to take out the part where the beneficiary gets taxed. So effectively the estate tax issue hides the fact that the wealthy can avoid ever paying any taxes on the majority of their income.

Oh and as an aside. I recently inherited my mothers IRA. These are taxed as regular income after death. The reason being the funds invested in IRA’s are not taxed. [Unless they are Roth IRA’s which are not taxed after death as the invested funds are taxed prior to investment.] Sounds fair huh?

B

http://b-political.blogspot.com/

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By kevin99999, June 28, 2007 at 8:09 am Link to this comment
(Unregistered commenter)

This is a corrupt system made worse by the corrupt and criminal conduct of GOP.

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By THOMAS BILLIS, June 28, 2007 at 1:15 am Link to this comment
(Unregistered commenter)

I love Warren Buffet as much as any straight man can love another.A man of his wealth who gets it.If anyone can defy the biblical proverb about a rich man getting into heavan he can.To be able to think past his own wealth and to the benefit of the country is a rare trait.He has also alluded in the past to why he supports the estate tax as a way to give each succeeding generation a chance at the American Dream.Guys like Buffet,Gates and Turner make me proud to be an American where amazing wealth is also accompanied by amazing social responsibility and a love of this country.Mr Buffet I salute you.

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