Class Warfare Ignores How the Rich Got Rich
The rich pay more taxes as a total percentage of taxes collected, but they do not pay, as a percentage, taxes they can afford to pay. So says Warren Buffet, the world’s third richest man. Buffett compiled a data sheet of the men and women working in his office. Buffett, with immense income from dividends and capital gains, paid less as a percentage of his income than the secretaries or the clerks or anyone else in his office. “How can this be fair?” he asked. “How can this be right?” Buffett continued, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” The article’s author, Ben Stein, offered several arguments for raising taxes on the rich. But nothing was ever said by Stein about Buffett’s education, time investment, or risk. In other words, nothing was said about how Buffett got rich.
Warren Buffett, known as the Oracle of Omaha, pushed the issue of taxes to the discussion forefront by urging members of the new Congressional supercommittee on deficit reduction to stop “coddling” him and other affluent Americans and raise their taxes. There is a mechanism for paying more taxes voluntarily to the US government, but nowhere in the article did it say that Buffett availed himself of that service. Buffett called for making the tax system more fair by rolling back the “Bush tax cuts” on people who earn more than $1 million a year and on income from capital gains and dividends, primary job creators.
Liberals have driven the debt-ceiling debate into the class-warfare ditch, promising most Americans they will continue to get something for nothing. This undermines America’s entrepreneurial spirit. Obama is pushing for what he calls a “reasonable proposition” (again, no definition of reasonable) of tax increases on the rich, families with incomes of $250,000 or more. “We weren’t balancing the budget off of middle-class families and working-class families. And we weren’t letting hedge-fund managers or authors of best-selling books off the hook,” said Obama. Unsaid was that the top 10% of earners are already on the hook for 70% of total income taxes, and the bottom 50% pay next to nothing. If “fairness” is as important to liberals as they say it is, they would be seeking balance by raising taxes on the low end of the income scale.
Just Tax The Rich
What’s wrong with the rich getting richer? Larry Beinhart, at Alternet, first quotes Timothy Noah, in “The United States of Inequality,” “Income distribution in the United States [has become] more unequal than in Guyana, Nicaragua, and Venezuela, and roughly on par with Uruguay, Argentina, and Ecuador.” Countries with wide income inequality don’t lead the world in research, technology, industry, and innovation. They’re unstable. They have large underclasses. They have high rates of crime. They have little opportunity. Countries with high levels of income inequality are third-world countries. Then Beinhart continues, “Here is how people can deal with high income inequality. The primary weapon is a progressive tax structure. As people move up the income ladder they pay a higher rate at each rung.”
Says John Stossel, “Of children who were born to the poorest fifth of Americans in 1970, more than half of them rose out of that group by the year 2000. Similarly, being born to a rich family didn’t guarantee success: 61% of the kids born to the richest fifth of Americans in 1970 were no longer in that group thirty years later. That also means that 61% of the richest fifth in 2000 came from poorer families.”
From Ed Morrissey at Hot Air, “Barack Obama told the nation last Wednesday [April] that “improvements” in Medicare and hiking taxes on the wealthy would stabilize government spending and bring deficit spending to what can charitably be described as a dull roar. The Wall Street Journal does some fact checking on these claims and finds them entirely false. Even if the “rich” gets defined down to the top 10% of filers – whose average annual household income is $114,000 – the level of revenue from even a 100% tax would still not close the budget gap.”
Here is something very interesting from the Wall Street Journal. Obama’s strategy has been to pretend not to increase taxes for middle class voters while looking for ways to do it. His 2009 budget included a “climate revenues” section from the indirect carbon tax of cap and trade, and a value-added tax (VAT). Most tax deductions go mainly to the middle class. These include the deductions for state and local tax payments, mortgage interest, employer-sponsored health insurance, 401(k) contributions, and charitable donations. The irony is that even as Obama says he wants the rich to pay more, his proposals would make the tax code less progressive than it is today. Obama continues targeting the middle class for tax increases to pay for an entitlement state run amuck, while claiming he only wants to tax the rich.
From this article, we learn that class warfare in the United States is heating up. Many are saying that higher taxes on the wealthy is the solution to our problems. But is that what we really want to do? Here are some facts to consider. [subsetted by me]
- The top 1 percent of all income earners already pay 39.5 percent of all federal income taxes.
- When you take all forms of federal taxation into account, the top 1 percent of all income earners pay 28.1 percent of all federal taxes.
- The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.
- Approximately 45 percent of all U.S. households pay absolutely no income taxes at all.
- Overall, U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.
- 59 percent of all Americans now receive a government payout of one form or another.
- The ultra-wealthy keep much of their wealth outside of the United States so that the government cannot tax it.
- The United States has the highest corporate tax rate in the developed world.
Consider, as the late, great Paul Harvey said, “Corporations don’t pay taxes. The increased costs are just passed on to consumers.”
“Tax The Rich” Is Nothing More Than Class Warfare Rhetoric
Says Ralph Alter, after making a bet with a conservative friend that Obama will not be re-elected in 2012, “He, like many Americans, fears that Obama’s class warfare strategy will pay off.” Despite liberal indoctrination, this is still the United States of America. Our nation, founded on resistance to structured class society, welcomed imigrants to America’s shores yearning to be free and independent. Almost all Americans believe that he or she can become rich here in the land of plenty. People who do get rich do not want to have the government confiscate almost all of his riches. Despite the class warfare drivel propagandized by liberals, average Joe American doesn’t begrudge the rich their riches. What they do begrudge is incompetent Democrats wasting the American Dream.
The next time you hear Obama, some Democrat, or some liberal spout off that “We should raise taxes on the rich because they can afford it, because they don’t pay their fair share,” remember that all they are doing is trying to use the rhetoric of class warfare to make their (talking) point. And if a liberal begins an argument with, “Tax the rich,” dazzle him or her with logic. Spread the word – class warfare rhetoric is just that, nothing but talk! Remember, November, 2012, cannot get here too soon.
But that’s just my opinion
Do not forget the current tax code is designed to “tax those attempting to become rich”
Those who are rich can afford to shelter their income from taxes. ie non-taxable government bonds
Because of this we see a larger divide between those who are rich and the middle class.
In what sense is the act of risking money in the hope of gain–essentially, of placing bets on the outcomes of the efforts of others–so much more worthy of rewards and concessions than performing the actual mental or physical labor that brings useful things into existence?
The issue has to do with the matter of balance–or rather the lack thereof. In a situation where the table is obviously tilted in favor of an upward concentration of rewards and wealth, many of those who benefit from that arrangement are arguing that the solution to our resultant fiscal and social dysfunctions is to tilt the table even further.
That’s the sort of “solution” that eventually gives rise to posters like the one displayed at the top of the page. Opinions concerning who’s actually getting something for nothing can suddenly shift quite radically–generally with unfortunate consequences for everyone.
The proper questions are How are the American middle and working classes doing? and What are we doing to help the most disadvantaged among us? Not What can we do to help the extraordinarily wealthy become even more so? The extraordinarily wealthy have been doing very well indeed–even through the worst recession since the Great Depression.
Carl Anyone can afford to buy bonds where only the interest, not principle, is non taxable.
I applaud the 40+ American billionaires led by Gates and Buffett who have pledged to give at least 50% of accumulated wealth to charity Great examples for the super wealthy.
@rich wheeler:
And so should everyone. What I wouldn’t, and don’t, applaud, is someone attempting to legislate the “morality” of charitable giving by force. In other words, using the government as the mechanism by which everyone who has is forced to altruistically “give” to the needy.
@Greg: I’m inferring that you are addressing the different income tax rates on regular “earned” income and long term capital gains.
A couple things to keep in mind … the “placing of bets” is with money already earned and taxed; the outcomes of those bets are nowhere near certain (lots of businesses fail every year), many of those bets are long term bets and have been ravaged by inflation much worse than any salary, and those bets are the “capital” that fuels America’s businesses and industry. In other words, it is the kind of money that builds things and creates jobs. Wages may lubricate the economy … going to groceries, rent or mortgages, cars…a small portion of which will be profit. But the bulk of invested capital comes from stockholders, lenders, and bondholders.
I’m sure most folks think of stocks and bonds when they think capital gains, but the harsh reality is that it also is the money invested by a small business owner in his business, farm, store, or shop. It’s the money that makes the economy strong.
Capital gains would encompass any profit you make on selling your home, were it not for the IRS section 121 specifically exempting that gain. Like most long term capital gains, a home is a lot of embedded capital which the homeowner “gambles” will be worth it in the long haul. The tax policy is designed to encourage people to take these risks, because it is thought to be good for the country as a whole. You blowing your paycheck at Wal-mart, not so much.
So capital gains gets a more favorable tax treatment for a lot of good economic reasons. Were it not for the capital markets and the stocks and bonds you sneer at, you’d never be able to get insurance or a pension. Where do you think they invest those premiums, anyway?
Your post is not only replete with errors and misleading statements, they’re not even original. I guess that’s a hazard of subscribing to a nonsense philosophy. The astounding thing is that right wing talking heads have been so successful in getting people like you to repeat this malarkey. Yes, I said “people like you”, because I’m willing to bet that you aren’t wealthy, that you don’t make anywhere near a quarter mill. a year and never will. Nevertheless you promote the radical right wing agenda of the ultra-wealthy, furthering their interests at the expense of your own. It’s bizarre!
Let’s consider your 3rd paragraph. Your facts are basically correct, but the implications you draw are totally misleading.
(1) The top 10% of earners pay 70% of total income taxes. – Maybe that’s related to the fact that they control close to 90% of the country’s net worth and income. Why shouldn’t they pay most of the income tax?
(2) The bottom 50% pay next to no income tax. – True, but the top 407 individual families in the country possess more wealth than that entire bottom 50%. How would you arrange a “fair” split of the income tax on this basis?
(3) What do you mean by “fair” anyway. Consider two families. One makes $50,000 a year, the other $50 million. Now impose a 10% income tax (or tax increase, if you like). How is each family affected? The first one pays $10,000 and has $40,000 to live on afterward. Can they shrug this off? Not a chance. That 10% increase would bury them! The family making $50 million, however would have to get by on $40 million. There’s no comparison!
(4) Finally, have you ever wondered why this talking point only mentions income tax? There’s a reason! Income tax comprises a little over 40% of total federal tax revenue. FICA withholding comprises another 40% or nearly as much; but FICA is capped at $106,000 per year per individual filer. For instance, someone making $1 million per year will pay FICA tax on only a tenth of it. The other 90% is tax free! How about ten “middle class” folks who each makes $100,000. They’ll each pay FICA on the entire amount. As a group, they’ll pay FICA on the entire million bucks of their combined income. This is 10X what the rich guy pays. For wealthy people earning $10 million, $100 million, and on up the disparity grows accordingly. In other words, the working poor and the middle class pay virtually all FICA taxes, while the rich pay pardly any. Since this amounts to virtually the same amount as income tax, how come right wingers don’t complain about this?
So each of the points you try to make in the 3rd paragraph is totally bogus. The rich actually don’t pay income tax proportionate to the amount of income and wealth they control. Even if they did, it wouldn’t be fair, because the poor and middle class are hit harder by proportionately equal taxes. And finally, the poor and middle class pay far, far more in FICA taxes, which contribute just about the same total amount to federal tax revenues as income tax. I didn’t even mention the other 20%, consisting of things like federal excise taxes, which also hit the poor and middle class harder.
My post illustrates the problem with debunking. It requires lots of time and space, so I’ll have to stop here. I have just one more question. Now that you know how misleading it is, will you stop using this talking point or will you continue to trot it out, as though nothing had happened? I’ll bet I know the answer.
Capitalism isn’t a system of morality. It isn’t concerned with rightness or wrongness. The two cardinal points on its guiding compass are profit and loss. If you’re going to make capitalism the central part of the ordering system of a society, you’ve got to somehow moderate the rightness and wrongness of its results. Doing that is a proper function of government.
OK, well I’ll do some debunking of my own, shall I AJ?
First, let’s think about whether any of the employees in Buffet’s office might be earning $200k or more, i.e. considered “rich” by the tax system Buffet’s advocating for. Nowhere does he explicitly ask only for the cap gains tax to be rasied, no, he just asks for taxes on the “rich”. He hasn’t said that ordinary income shouldn’t be taxed at higher rates, which is exactly the goal of these would-be tax-raisers. Under current law, a high earner in a state with a high income tax is already in for a big hit. Here in California, such an earner is paying 35% federal income tax, 9.3% state income tax, and 1.45% to medicare. In 2013, even without the tax hikes Buffet seems to want, that same person will be paying 39.6%, plus the 9.3%, plus the higher 2.35% medicare tax, plus 1% for a return of the itemized deduction phaseout, and if God forbid he/she has investment income, an additional 3.8% for the medicare investment tax.
In contrast, let’s look honestly at Buffet’s situation. His net worth is/was estimated at $47 billion. If he paid $6 million in taxes, and it was entirely from cap gains at 15%, this implies that he sold around $40 million in stock, or around 0.1% of his net worth. So if the cap gains tax rate were to jump to, say, 50%, then to raise the same $34 million in after-tax income, he’ll have to sell $68 million in stock, or around 0.14% of his net worth. Wow, boy, what a sacrifice. Compare that insignificant hit to his net worth with the hit taken by one of his office workers whose “human capital” was just devalued by a gigantic increase in his/her ordinary income tax rates, and there is no comparison.
Even more damning is the fact that very little would be raised from higher capital gains taxes. The CBO data used by the president’s own deficit commission reveal that as a “tax expenditure” the cap gains tax is worth about $20-25 billion / year. So it’s chump change in exchange for a huge disincentive for private investment in America’s future. And on ordinary income, even the NYT admits that of the $380 billion / year that the Bush tax cuts are “costing” the government, just $70 billion went to “the rich”. Again, not a lot of revenue in exchange for a significant disincentive to continue earning those incomes. Is the goal really to raise revenue, or is it to feel better by taking people whose success you resent and envy down a peg or two? From the numbers, I can’t help but suspect the latter.
J.G # 4 Isn’t it sweet irony that the more the super rich give to their favorite charities the less they may be required to give to their least favorite “charitycase”,the govt.
Now that I’ve read your summary of bullet points, I have to address at least a couple of them. First of all, if most U.S. households receive more in benefits than they pay in taxes, that’s exactly as it should be! It’s called wealth redistribution and, as the nation’s Founders intended, it’s one of government’s primary functions. In case you’re unaware of it, most of the Founders – people like Jefferson, Adams, Madison, Patrick Henry, and so on – were intensely opposed to unlimited accumulation of wealth, which they regarded as pernicious to democracy. (Are you shocked? That’s because you’ve been brainwashed by libertarians, who contend that the Founders were libertarians too. They were not!)
Contrary to the view of that emminent economist, Paul Harvey, corporations do not pass on all of their costs to consumers, because they cannot! It’s a result of the most basic economics of supply and demand. Sales of goods and services are determined in the most immediate sense by price and demand. As price increases, while demand remains the same, then sales decrease. At a certain point, decreased sales outweigh the increased profit per item, and profits diminish too. This is the limit that every corporation must recognize, when it tries to pass along costs (such as taxes) to consumers by increasing its prices. Every businessman knows this without question. So, when they repeat the meme about corporations “not paying” taxes, they’re basically lying. And anyone who believes them is a fool!
The U.S. may have the highest statutory corporate tax rate in the world; but, thanks to loopholes, tax shelters, rebates, credits, and other ploys, it also has one of the lowest effective corporate tax rates! Take a look at this article by Bruce Bartlett from The New York Times.
@ruralcounsel, #5:
I’m of the opinion that the economy has slowed largely because the buying power and confidence of mainstream consumers have declined. It’s the consumption of middle and working class Americans that keeps the wheels of the American economy turning. A strong economy depends on their consumption of the goods and services that they themselves earn their livings producing. As they rise or fall, so goes the economy of the nation.
If too much of the nation’s total income and wealth shift away from them, things go out of balance. That’s what has been happening. For a time this was was compensated for by encouraging a continuing high level of mainstream consumption based on expanding consumer debt, but that ultimately reaches a point where it can’t continue, and the accumulated debt itself becomes one more serious drag on the economy.
The cure to a recession involves channeling more wealth and income back down into the working and middle classes, where most of the consumption takes place. (i.e., redistribution.) That’s best accomplished through increases in wages and benefits for working Americans; by giving them an increased share of the wealth that their own efforts have produced. Another means is through increased high-end taxation, with the government directing more of the high-end income back downward. Social spending is part of this approach; the best use involves investing in health, education, and essential infrastructure.
Unfortunately–in my view–there’s strong resistance to both approaches. There’s a battle going on to reduce wages and benefits for working Americans, a battle to drastically reduce or eliminate social, educational, and infrastructure spending, and a battle to reduce high-end taxes that are already at historically low rates, even when the rise of public debt has been greatly accelerated by a prolonged recession that has left the wealthiest unscathed, to say the least.
I guess that can all be characterized as class warfare.
@Greg:
Consider this, Greg;
– Over the 28-year period from 1980-2008, the average total income gain by the bottom 50% of taxpayers rose by around 4.5%, and only ONCE did their total income drop, from 2007-2008, where the decrease was only 0.2%.
-During that same period, the top 1% saw their income rise, in the years that it did rise, by an average of 12-15%. However, that same income group saw their total income drop SIX times, with each drop averaging 9.4%.
-The one year that both groups had a decrease in income, between 2007 and 2008, the bottom 50%, as I stated, only lost 0.2%, while the top 1% saw a decrease of 16.1%.
-So, the conclusion to draw from this is that the lower wage earners’ wages are fairly stable, even during times of economic downturns, while the top 1% has very volatile earnings, or, are at risk in their incomes depending on the economy. Kinda similar to investing, where the safer investments earn very little, but generally positive earnings no matter what the economy is doing, while the risky investments can earn quite a bit more during the good economic times, but also are at severe risk of losing money during bad economic times.
http://www.taxfoundation.org/news/show/250.html
Look at those tables yourself, Greg. The increases the top 1% saw in their total income, while varying to degree, are actually rather similar, regardless of the actual income tax rates at the time. In other words, it doesn’t matter what the actual income tax rate is, the increases are going to happen, and they are going to be the same.
The link that I gave shows your statement is not necessarily true. If you are simply talking about quality of life, then you might have a point. However, given the theme in your post, that the higher income earners are gaining, even during the tough economic times, the data doesn’t bear that out, meaning that you are quite wrong on this.
Economic class warfare doesn’t benefit anyone except the politicians who use the emotional tugs the warfare seeds in order to gain votes and remain in power. You are contributing to the class warfare rhetoric, and suggesting that the way to “even things out”, or, to make it more fair, is to forcefully take from the higher income earners and give to the lower income groups.
The one reason that I respect Larry W’s position on taxes is that he insists they be raised, ALL of them, to pay for the government spending and the government’s budget issues. You, on the other hand, insist that the government needs to step in and attempt to equalize the outcomes of everyone’s lives. The irony is that you say it is to build everyone up, but the method you suggest to do so is purely destructive. In other words, you propose something that cannot be done.
I would be more impressed if instead of them saying they will give 50% of their income to charity, they would use it to create jobs. THAT would be far more helpful.
@Greg:
Actually, Greg, it is NOT a proper function of government as put forth by the founding fathers. The government should ensure an equal playing field for everyone, not legislate for the equality of outcomes, as you propose, and the founding fathers own words bear that out.
@Doug: What on Earth are you talking about? I didn’t mention capital gains taxes at all.
And just whom are you debunking? The paragraph in question tries to show that the rich already pay enough. I disagree. Meanwhile you seem intent on demonstrating that the rich (like Buffett) can only pay enough if their net worth is diminished significantly. I’m not sure I’d go along with that, but it does appear you that you agree with my point.
Do you actually have any idea what you’re saying?
@johngalt: Oh, yeah? Where?
For that matter, please read Patrick Henry’s last great pamphlet, called Agrarian Justice, and tell me how it supports a libertarian agenda?
@AJ Hill, #16:
An interesting document. It’s here.
@AJ Hill:
There is a serious flaw with your line of reasoning, AJ. While many of the founders did, in fact, discuss and even address the negatives of inheritances, none of them discussed “wealth redistribution” in regards to the living. I challenge you to present any founding father’s words that discuss “wealth redistribution” as it regards to the living.
On top of that, you confuse the entire discussion when you discuss “wealth” and “income” as if they are the same thing.
@rich wheeler: “I applaud the 40+ American billionaires led by Gates and Buffett who have pledged to give at least 50% of accumulated wealth to charity Great examples for the super wealthy.”
I take it from the above that you have actually looked at the charities where many of these “Rich” continue to get the benefit of the use of the gift. Not to forget those “rich” whose accumulated wealth is already in other entities such that they no longer claim as part of their wealth for the above charitable pledge.
@AJ Hill:
I have read that piece by Thomas Paine, which was included in the same book as Common Sense, which I also read. I didn’t agree with it, nor, did it seems, the founders, many of whom were in Congress at the time of publication of that piece.
@johngalt: Wow! Talk about lying with numbers. Your spot figures for isolated changes in income have little to do with the net result of economic activity. To see what’s really going on one should look at the overall disparity between rich (mostly investors) and poor (mainly laborers). In the United States, that trajectory has been inexorably toward greater inequality. If you’re reading this, Greg (I liked your post, by the way), try going to this website for some astonishing graphical summaries that belie Johngalt’s claims.
#18:
I think everyone is clear on the distinction. Income is wealth at the point of acquisition. That’s the point where taxation usually happens, but previously arrived wealth can be taxed too–as anyone who pays state property taxes knows all too well.
@AJ Hill:
AJ, I didn’t say one word about income disparity not happening to Greg. My comment was directed at his questioning the “risk”(or lack of, as Greg asserts), in investing in others’ time and effort. The numbers do not lie, as they show the volatility of the income in the top 1%, including some massive decreases. Meanwhile, the bottom 50%, or “mainly laborers” incomes rise at a fairly steady rate, even when the top 1%’s income might drop. In other words, the bottom 50%’s incomes are fairly stable in comparison. You are attempting to suggest that I stated something I didn’t. Good luck with that.
@Greg:
My point to AJ was that when discussing income tax rates, it confuses the issue when “wealth” is brought into the discussion. Stick with one term or the other.
@johngalt, #24:
Point taken.
@AJ Hill:
The point is that Buffet is talking his book. He cries “raise my taxes” but what he’s really advocating is for a scarcely noticeable increase in his own taxes and a proportionately larger increase in the taxes of the “working rich”. Wealthy elites are quite happy to set lower-income folks against professionals and small businesses while their own wealth remains untouched by the class warfare. “I’ve got mine, why can’t the rest of you just split what’s left?” is the message. I liken it to pouring grease down the ladder of success from a comfortable position on top of it. Thanks, but no thanks.
I congratulate your erudition. Why do you conclude that the Founders didn’t agree with Paine (and thanks for the subtle corrrection of my mistaken attribution). Is it because they didn’t enact the Social Security type of system he outlined? Hardly convincing.
No, wealth and income aren’t the same, but they track together over a great many demographics.
As for your challenge, I accept happily: “In every political society, parties are unavoidable. A difference of interests, real or supposed, is the most natural and fruitful source of them. The great object should be to combat the evil: 1. By establishing a political equality among all. 2. By withholding unnecessary opportunities from a few, to increase the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches. 3. By the silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort. James Madison, Papers 14:197—98, 1792.
Madison may have referred to adjusting the financial posture of the deceased, but I doubt it! As to the “rights of property” it’s the invariable position of the opponents of wealth redistribution that every mechanism for accomplishing this (like taxation) violates property rights, but such claims have been dismissed long ago by the courts. There’s no doubt about the ultimate goal Madison recommends. Combining his aim to “reduce extreme wealth” with that to “raise extreme indigence”, it’s hard to avoid the implication of redistribution from one to the other.
Warren Buffett owns 6 life insurance companies.
The life insurance lobby (Buffett) is lobbying big time to get the estate tax reinstated and made bigger.
WHY?
Because when a farmer or small business man dies one of Warren Buffett’s life insurance companies (or someone else’s) pays off the family with tax-free money.
Well, that sounds bad for Warren Buffett, right????
No.
Because 9 times out of 10 the family will have to SELL the farm or the company since the estate taxes are so high.
And Warren Buffett BUYS those properties.
So, OF COURSE Warren Buffett (and the Warren Buffetts of the country) want to TAX the ”rich” more!
More here:
http://www.americanthinker.com/2010/12/warren_buffett_robber_baron.html
Do you get it …. yet?
Oh, and BTW, Warren Buffett paid over 250 times more tax than anyone in his office.
AND, he can always add in as much more toward the feds as he wants.
So….why does he not?
Why does he chose to give $20 million to the Gates Foundation instead of to the Feds?
To save on taxes?
And assist his agenda.
Well Greg, You have failed to understand again or yet. You are saying that if I have an idea to build a successful business, I invest $250,000 and borrow $1 million to get it started I should share any gains equally with any employees I hire? Now if after 10 years of hard work and sacrifice, I start to get a net return on my investment at about $260,000 per year, then I am rich and should spread the money around with the employees.
Now suppose my business is assembling some product. My employees each have to put in 4 screws and 7 bolts for each item. They do this for 8 hours per day, 5 days each week. I pay them about $14/ hour and provide a very basic health care plan. I on the other hand must make sure there is raw material at the site where these workers install the screws and bolts. I bear the increased cost of fuel due to incompetent government. I pay all of the utilities for the shop. I market the product. I work at a minimum of 70 hours per week. So using your logic, I should share my $260,000 net with all of them?
Maybe you just saw that Manning just became the highest paid foot ball player in history. I think the amount was $90 million. Should he be sharing his earnings with the other 10 guys who are on the field at the same time as he even though their tasks are limited in scope and Manning actually runs the offence? You are one sick socialist puppy!
@Greg:
Greg, you are right!! Proving that even a blind pig can find an acorn. You have the wrong reasons. The working class is not spending their money because they are out of work because the government has made it too risky for businesses to expand or to start up. When you take their capital away in taxes, that leaves less to expand the business.
Now Greg please answer this question. Who many of the working class have ever worked for a poor man?
@ AJ Hill
Really?
I don’t think so.
@Randy, #29:
Nope. I’m suggesting that maybe the guys who do nothing more than invest the $1,000,000 shouldn’t be getting preferential tax rates, compared with your own or those of your employees.
#30:
Most employers are not poor, but neither is their annual income most commonly measured in the millions or billions.
@AJ Hill:
If this is true, then please tell me why the founding fathers failed to provide a mechanism to spread the wealth around? They didn’t because they all believed that the Federal government should be minimized with the rights going to the states and individuals. They were against accumulating wealth at the expense of others which is not the same thing. You need to read real history books!
@Greg:
Greg, if they didn’t invest in something that may lose them their one million dollars, there would be no busness in the first place! THAT is why they get the rate you don’t like. They help create a business that produces jobs and other benfits to the community.
@Nan G:
You just showed how people can play games with numbers. He said he only paid 17%. What Greg and AJ don’t want you to look at is how much that really is.
@Greg: Greg, please tell me what those preferential tax rates are? When a $15/hr employee pays no tax and actually gets money back from the government that he did not earn, who is getting the preferential tax rates? Gerg, Maybe you should spend some time in another country where you can see your policies working. I think Syria is currently one. Lybia, Egypt, Yeman and a few other think like you do. See how well their system and your system really works.
@Hard Right, #34:
The higher tax rates don’t apply unless their investments are paying off well enough to have made the gambles worthwhile. And they do get to net their profits and losses, right?
#36:
I’m very skeptical of the thought that $15 per hour employees pay no taxes. That certainly was never the case back in the day when my own earnings were in that range.
@Nan G: You know, I’m at a loss to understand this entire thread, unless it’s an attempt to discredit a rich man who espouses liberal causes. Even if he’s a hypocrit (which I haven’s seen demonstrated here!) Warren Buffett is light years ahead of moral dung beetles like the Koch’s, who devote themselves and their riches to screwing over working people and the middle class.
P.S. – My apologties to dung beetles.
One simple question nobody has the guts to ask:
Why, Mr. Buffett, don’t you write a daily check, payable to the Treasury in the amount you think you should be paying? (If course you won’t want to put your tax id on it so there won’t be any risk of you using it for a deduction.
@Greg: $31,200 gross with a family of 4 is considered poverty in this country now. Check out your tax tables. Maybe you should understand the system a little more before you shoot off you mouth!
@Randy: Well, Randy, I can’t tell you how many people started out working for poor men (or women). Perhaps no one can, but I can tell you that, when he started Microsoft with Paul Allen, Bill Gates was a poor student. So was Mark Zuckerberg, when he launched Facebook. Intel was started by a pair of middle class engineers. And so on. Add ’em all up and it’s safe to say that millions of people now work for entrepeneurs who started poor. I still don’t see why you folks are so wedded to providing special privileges for the wealthy. Are you that self-destructively altruistic, or do you seriously suppose you’ll attain that exalted status someday?
For all of you who suggest that Warren Buffet simply donate his fortune to the government, he surely realizes, even if you don’t, that his individual act would have no significant effect. Taxing all the rich at a higher rate would have a substantial effect, so that’s what he promotes. I’m sure many of you would like to see Mr. Buffett immolate himself futilely on his principles, but he’s not that stupid.
@AJ Hill: You missed the point, too, but that was your point. The real answer is that it takes money to employ workers. Those with no money can not hire workers. If a poor man breaks his butt investing all of his money and time and knowledge like Gates and others, you want to take that away and give it to the dead beat down the street who makes babies for a living.
@Randy, #41:
I suspect FICA and Medicare taxes are still coming out of the paycheck, along with various state withholding items. There’s sales tax on every dollar you spend. Property tax, it you’ve got property. State and federal taxes on gasoline. None of which can be claimed back or are subject to deductions or loopholes.
@Greg: And the rich do not pay that in addition to the high rates of income tax? Give me a break Greg. You are scrounging in the bottom of the urinal for this comment!
@Randy, #45:
For our hypothetical $15 per hour employee with a spouse and 2 kids, those inescapable taxes are in direct competition with fulfilling the family’s basic needs for food, shelter, clothing, medical care, etc. For a millionaire or billionaire, that’s not the case.
It would be interesting to compute what percentage of the nation’s total taxes the wealthiest pay, with all of those inescapable taxes factored in.
@Randy: Gates et al. didn’t use their own money to start their businesses and the tax code is set up to excuse such entrepeneurs from paying huge taxes until they’re making huge amounts of money. As for the “baby maker” down the street scoring undeserved public largesse, that’s the old Ronald Reagan “welfare queen” myth. Reagan made that myth up according to his staff and so have you, or you’ve absorbed it uncritically from the cynical people who promote it. The vast majority of entitlement programs go to those who have worked their entire lives (or most of them) and paid into the system. That’s why these are called “entitlement” programs; their recipients have earned them. That’s also why the lying right wing scumbags who cite Social Security as a source of the national debt should be scourged through the streets. If you’re so greedy that you want to confiscate the hard-earned retirement and healthcare savings of working people and so selfish that you refuse to share what you have with those who are less fortunate, why not just admit it instead of trying to claim justification from some transparently self -serving social myth. I’m willing to accept you as you are.
@Greg: So the rest of us shouuld subsidize someone who married and had a family when he could not afford one? You still are reaching Greg. You who embrace post modern philosophy totally ignore natural laws in favor of your idealism.
@AJ Hill: So, there is no one having babies to increase their welfare check? You tried to move this discussion to Social Security. That was not the topic. I cited welfare and it does exist. Spend some time with social workers. You are just like allof the other liberals I know. You never attack the subject head on because you lose. You always try to muddy the waters and move to another topic. That is what Pelosi and her ilk do. They want us to believe that increased unemployment benis and food stamps improve the economy.
Randy says “deadbeat down the street who makes babies for a living” Shame on you Colonel.
Semper Fi