Warren Buffet

[FC]

Found what I was looking for.

 

2010:

I assume these wages are taxable wages and not gross wages.

 

 

68% made less than 50k (majority of this group is under 30k)

12.5% made 50k to 100k (shocking)

2% made 100k to 500k (stunning)

1% (4000 people) made over $1M and paid no taxes

 

Just the 1% making a million would be about a billion dollars a year. Small change considering, but every bit helps.

 

Doesn’t the EIC often cause the government to actually refund more than the taxpayer actually paid?

[woodsrider]

For the record if your income is $30k and you've got a family I'm OK with no federal income taxes being paid. Social security taxes, state taxes, unemployment taxes, and local taxes along with sales tax take enough of that income.

Actually a family of 4 making $30k is coming out about even on Federal, SS, and Medicare/Medicaid. The EIC they would get would pretty much cover it. The only tax they would pay (payroll wise) would be state and local. That is figuring just the standard deduction and no other credits. I assume they still get the child credit of $1000 per so in the end they are coming out ahead. Although I am not sure if you would still get the child credit under these circumstances.

[woodsrider]

Just the 1% making a million would be about a billion dollars a year. Small change considering, but every bit helps.

 

Doesn’t the EIC often cause the government to actually refund more than the taxpayer actually paid?

Yes for the really low income earners.

[Clyde]

Do you have a link? My guess is it is gross wages, not taxable.

 

http://money.cnn.com/2011/04/14/pf/t...axes/index.htm

[leatherneck]

Unless your single making more then $40,000 with no ductions then no you aren't. Also, most of Buffets tax is capitol gains which is 15% no matter what.

 

And that is probably a large part of why his percentage of income paid in taxes is lower than a lot of other folks making a lot less money (I know it's lower than the percentage I pay). But I'm fine with it. Capital gains should be taxed at lower rates in order to incentivize people to invest their money in businesses. Capitalism needs people to freely invest their money or else economic development and growth suffers. Heck, I think in this economy they should lower the capital gains tax on capital invested in 2011 and 2012. Give people an even greater incentive to invest in businesses during these uncertain times. Who knows, lower it far enough and maybe those business types may get over their concern about our President and the uncertainty and lack of leadership in the OO. Something has to be done to put all that cash to work.

 

I know the word "loophole" has been demonized these days, but in many (all?) cases, loopholes are designed to serve some desired economic or social objective. The lower capital gains tax serves as an incentive to invest, which is vital to our economy. The charitable deduction serves as an incentive to give to charities. The so called mortgage interest deduction is to incentivize home ownership and make it easier to afford home ownership. Every loophole is designed to stimulate and encourage a certain desired behavior or outcome. So when people lower their taxes by taking advantage of loopholes, this country should be benefitting from the desired behavior attendant to such loophole. Admittedly, there probably are way too many loopholes and some need to be closed, but folks need to remember that as the loophole is closed, the desired activity that such loophole created in the past will likely cease or diminish. Closing loopholes sounds sexy, but be careful of the doctrine of unintended consequences.

 

My guess is that if Buffet shared his tax return with us, we'd see a whole lot of capital gain income and a whole lot of deductions and credits taking advantage of loopholes. When we see large deductions for charitable giving should we criticize the impact it had on the amount (or percentage) of taxes paid, or should we look at the positive things done by him donating his money to worthy causes. It can't be both, can it?

[75center]

http://money.cnn.com/2011/04/14/pf/t...axes/index.htm

 

Thanks, I wasn't able to get into it but I should be able to search it out.

[iamapt]

Simplicity would rule. Forbes plan states the first 45K is not taxable, after that flat tax of 18%, no deductions. Simple, your return each year would be a post card. sounds fair to me

[littleluck55]

Here was an interesting article I came across involving a recent college graduate in California trying to get a petition signed for students with a 4.0 gpa redistribute their gpa with students with lower gpa's. He is trying to compare it to taxing the wealthy at higher rate than everyone else. It looks like he is filming some type of documentary. He is also trying to get everyone to sign an agreement to pay $47,000 each to cover the national debt.

 

http://www.foxnews.com/us/2011/08/17/college-students-in-favor-wealth-distribution-are-asked-to-support-grade/

 

And for the record, I am for a sales tax only. I figure it would tax the wealthy at a higher rate as they tend to buy nicer things. It would get drug dealers and anyone else who works for cash. And be simple.

[Habib]

Perhaps, but it would sure make my opinion of Buffet go up if he put his money where his mouth is. Maybe others similarly situated would do the same if he took the voluntary approach. I hate, despise, detest the forced taking of someone's property because they have been successful. It's a philosophical thing with me. The man paid something like 7MM dollars in income tax last year. I think he's already forcibly paying more than his fair share of the system.

 

Better heroin analogy in this case is that Buffet is seemingly saying: I like using heroin and I know the use is killing me. But I'm not going to quit using it unless the govt forces everyone else to quit using it too.

 

Care to comment on his response as to why he donates to foundations and doesn't give the money to the federal govt because the foundations "will do a better job with lower administrative costs and better selection of beneficiaries than the government"? If that's what he believes, why isn't he publicly campaigning for the government being reformed to lower it's administrative costs and to do a better job deciding where and how the money is spent?

 

But I still don't think this takes away Buffet's belief that he can do a "better job" at the "selection of beneficiaries than the government." Whether it's law or voluntary, how the government handles the increased revenue is the issue.

 

I can't find the full transcript of the interview his quote was taken from, unfortunately, so I'm missing pieces from his rationale. But, I don't believe what he says here is incompatible with his position on tax rates. As I said before, he's advocating a particular policy and without universal participation or relying on a voluntary basis alone it would be futile. The reasons he might advocate a particular policy are a separate issue. I don't disagree with his statement about why he doesn't donate money to the government, and I think the majority of people share his sentiment as well. But, this is entirely different than saying the government doesn't provide necessary services or that deficits/debt don't matter. It isn't hypocritical for him to say that he believes the deficit and debt should be paid down in part through increased revenue rather than austerity, for instance, while also preferring to donate portions of his disposable income to the Gates Foundation.

[Randy Parker]

I can't find the full transcript of the interview his quote was taken from, unfortunately, so I'm missing pieces from his rationale. But, I don't believe what he says here is incompatible with his position on tax rates. As I said before, he's advocating a particular policy and without universal participation or relying on a voluntary basis alone it would be futile. The reasons he might advocate a particular policy are a separate issue. I don't disagree with his statement about why he doesn't donate money to the government, and I think the majority of people share his sentiment as well. But, this is entirely different than saying the government doesn't provide necessary services or that deficits/debt don't matter. It isn't hypocritical for him to say that he believes the deficit and debt should be paid down in part through increased revenue rather than austerity, for instance, while also preferring to donate portions of his disposable income to the Gates Foundation.

 

I still see tremendous inconsistency. I personally don't use the argument that some do when they say folks like Buffet have an opportunity to give more in taxes. I see where they're coming from & understand their rationale. And while there would be some small benefit, such donations wouldn't solve many problems in the bigger picture.

 

Still, I think Buffet's comment about him and/or the Gates Foundation being able to do a "better job" than the government is quite telling. In what way would the government be able to do "better" if the tax laws he's pushing do indeed generate more revenue? It seems to me that whether or not the increased revenue is $1 billion of voluntary government donations or $1 trillion of involuntary tax receipts, his statement of the government not being all that capable of managing the money still holds true.

 

It's not the amount of revenue, nor the manner in which it is generated. It's the government's handling that Buffet questions, and in doing so, contradicts himself and his position on the matter. How can the government not handle it as well when it's donated, but they can when it's taxed? I just don't see it.

[Habib]

I still see tremendous inconsistency. I personally don't use the argument that some do when they say folks like Buffet have an opportunity to give more in taxes. I see where they're coming from & understand their rationale. And while there would be some small benefit, such donations wouldn't solve many problems in the bigger picture.

 

Still, I think Buffet's comment about him and/or the Gates Foundation being able to do a "better job" than the government is quite telling. In what way would the government be able to do "better" if the tax laws he's pushing do indeed generate more revenue? It seems to me that whether or not the increased revenue is $1 billion of voluntary government donations or $1 trillion of involuntary tax receipts, his statement of the government not being all that capable of managing the money still holds true.

 

It's not the amount of revenue, nor the manner in which it is generated. It's the government's handling that Buffet questions, and in doing so, contradicts himself and his position on the matter. How can the government not handle it as well when it's donated, but they can when it's taxed? I just don't see it.

 

This is where the full transcript would come in handy as I can't speak for Warren Buffet. My own view is that their are two levels to the argument. First, the government does a lot of things - from the necessary to the negligible, depending on your view - thus when we discuss deficits and debt we have to decide which of those things the government should quit doing or find ways to pay for it. On the second level, if you wanted to donate money to help victims of domestic violence, for instance, your best option is to find an organization that is doing a good job servicing domestic violence victims or working to prevent it and giving them the money. Giving that money to the government would only help the deficit (imperceptibly at best) which wouldn't do anything to help domestic violence, even assuming the government is both doing something to alleviate the problem and you agreed with the specific policies. So, we can have discussions about which policies should or shouldn't exist as well as to how to fund the government and at what level and I think Warren Buffet is simply talking about the latter. I think the government does some things well and some things poorly and it does things we agree with and things we don't agree with, but if we only paid for the things we liked individually none of it would work.

[lynks66]

This is where the full transcript would come in handy as I can't speak for Warren Buffet. My own view is that their are two levels to the argument. First, the government does a lot of things - from the necessary to the negligible, depending on your view - thus when we discuss deficits and debt we have to decide which of those things the government should quit doing or find ways to pay for it. On the second level, if you wanted to donate money to help victims of domestic violence, for instance, your best option is to find an organization that is doing a good job servicing domestic violence victims or working to prevent it and giving them the money. Giving that money to the government would only help the deficit (imperceptibly at best) which wouldn't do anything to help domestic violence, even assuming the government is both doing something to alleviate the problem and you agreed with the specific policies. So, we can have discussions about which policies should or shouldn't exist as well as to how to fund the government and at what level and I think Warren Buffet is simply talking about the latter. I think the government does some things well and some things poorly and it does things we agree with and things we don't agree with, but if we only paid for the things we liked individually none of it would work.

 

Just out of curiousity, what things would you say the government does well?

[Randy Parker]

This is where the full transcript would come in handy as I can't speak for Warren Buffet. My own view is that their are two levels to the argument. First, the government does a lot of things - from the necessary to the negligible, depending on your view - thus when we discuss deficits and debt we have to decide which of those things the government should quit doing or find ways to pay for it. On the second level, if you wanted to donate money to help victims of domestic violence, for instance, your best option is to find an organization that is doing a good job servicing domestic violence victims or working to prevent it and giving them the money. Giving that money to the government would only help the deficit (imperceptibly at best) which wouldn't do anything to help domestic violence, even assuming the government is both doing something to alleviate the problem and you agreed with the specific policies. So, we can have discussions about which policies should or shouldn't exist as well as to how to fund the government and at what level and I think Warren Buffet is simply talking about the latter. I think the government does some things well and some things poorly and it does things we agree with and things we don't agree with, but if we only paid for the things we liked individually none of it would work.

 

That's a very good explanation & I agree with most of what you said.

 

Looking at the original interview link, it seems that Buffet is speaking to the point of his/Gates' foundations being better equipped to helping those who are less fortunate to have specific needs met. And regarding what he said ("will do a better job with lower administrative costs and better selection of beneficiaries than the government") I completely agree. I believe private organizations (i.e. churches, goodwill programs, Salvation Army, etc.), for the most part, will do a better job of identifying legitimate needs & meeting those needs than will the government.

 

In regards to the deficit, obviously the onus is on the government because there's really no other single entity capable or large enough to accomplish what is needed. Theoretically, I can at least agree with Buffet that revenue needs to be increased (though we likely disagree on how it is to be increased).

[Fastbreak]

I'm sure some think this sounds fair...

 

"...taking half of the yearly income from every person making between one and ten million dollars would only decrease the nation's debt by 1%. Even taking every last penny from every individual making more than $10 million per year would only reduce the nation's deficit by 12 percent and the debt by 2 percent. There's simply not enough wealth in the community of the rich to erase this country's problems by waving some magic tax wand.

 

Finally, to put everything in perspective, think about what would need to be done to erase the federal deficit this year: After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion. It may be economically ruinous, but at least this proposal would actually solve the problem."

 

http://www.taxfoundation.org/news/show/27556.html

[woodsrider]

I have yet to hear what "their fair share" is. If I make $1 million what should my fair share be? What if I make $250,000?