The most respected investor and capitalist on the planet, Warren Buffett, took to the pages of the New York Times this morning to bust a myth that has dominated political discourse in recent months:

The idea that raising taxes on super-rich people would hurt the economy.

Buffett observes that his own personal taxes as a percent of his income have plummeted in the past decade, to all-time lows. He observes, as he has before, that he pays a much lower tax rate than his secretary. He calls out the absurdity of hedge-fund managers and other professional investors playing "long-term capital gains" rates on short-term trading profits.

And then he takes aim at the biggest rationale for preserving these astonishing tax breaks: The claim that, if taxes on deca-millionaire and billionaires were increased, these super-rich Americans would stop investing, thus clobbering the economy and hurting job growth:

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn't refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation.

When presented with these facts, those who argue against tax increases on the super-rich--or, even more absurdly, for more tax cuts--often point to President Ronald Reagan, observing that he cut taxes for the wealthy, helping usher in a long economic boom.

This ignores the point that Reagan also raised taxes. And more importantly, it ignores how high tax rates on super-rich people were when Reagan cut them: In 1980, the top bracket was a startling 70%. It also ignores how Bill Clinton raised taxes and then took the US from the perpetual deficits of the Reagan years to a surplus. It ignores how George Bush cut taxes, plunged the budget back into a deficit, encouraged the wild borrowing spree that inflated the housing bubble, and then oversaw the worst recession since the Depression. It ignores how the US prospered all through the 1950s and 1960s, when marginal tax rates were super-high. And so on.

In short, it ignores almost all the economic data we have. And it appears to be based on a rigid ideology, rather than common sense.

Buffett, by the way, isn't proposing a blanket increase on today's entire top tax bracket, those making over $379,150, many of whom protest against the idea that they are "rich." Buffett is suggesting the implementation of two new brackets--one for taxpayers making over $1 million, of whom there are 237,000 in the country, and one for taxpayers making over $10 million, of whom there are only 8,000.

In other words, Buffett's tax-increase-on-the-super-rich would affect 1 in 1,253 Americans, less than 1/10th of 1% of the population.

Warren Buffett for President, Bill Maher for Vice-President. I'd vote for Mr. Serious and Mr. Not So Serious over anyone the Republican'ts and the Party of No are likely to place on the ballot in 2012. We had, as Maher says, "The cowboy from Toy Story as president for eight years." Might as well try intelligence and humor for an election cycle, or two.
I like Buffet's tax proposal and Bill Maher's take on RWCWJs and other religious zealots. That's my wheelbarrow full of nearly useless dollars worth. Carry on...

I'll take raising revenues more seriously AFTER Congress takes cutting spending more seriously.

Warren needs to also address that 50% of the country now pays NO income tax. I'm starting to lean more and more towards the flat tax and eliminating loop holes. Warren won't like that though.

50% don't pay income taxes because they don't make schit for income...and as a percentage of their income, they pay far more taxes than most since most of their money goes directly to buying things, not savings, not stocks, not real estate.

Typical right wing hogwash..."to be fair, we really need to tax those low- and middle-income people more!".

Fish on...

Todd

+1,000 Todd

There's some typical left wing hogwash in there too.

Big difference between what Buffett is proposing and what comes out of Obama and the Dems mouths: Buffet's pool of rich people is much smaller than Obama and Co's pool. Obama wants to go as low as $200k to $250k income. Buffet is targeting a much smaller percentage of the population and actually I don't have a big issue with that. However, if there isn't a much more serious effort to cut and control spending even squeezing Buffet's buddies for more dough ain't gonna make much of a difference.

"You know what's happened since then: lower tax rates and far lower job creation."


"Warren needs to also address that 50% of the country now pays NO income tax."

Agreed. All of those large corporations need to start paying their share and, money pool wise, it's more like 90%.

Brilliant statistical analysis, as always.

Yes, when anyone on the right brings up the 50% who don't pay income tax, that's exactly what they are saying...that we need to tax those low- and lower-middle class malingerers more, not the ultra-rich, and certainly not all the corporations who are bilking and milking our country out of zillions.

Fish on...

Todd

For the longest time I've wondered why "capital gains" aren't taxed like regular income. That's where most of Buffet's income is; it's not like he has Hathaway write him a paycheck every couple weeks. Seems to me that low capital gains tax rates is more about low taxes for the rich than it is about encouraging investing business job creation or anything for the general welfare.

I've never had any capital gains to declare for the lower taxes.

Sg

First of all, the discussion is about personal income tax, not corporate taxes so you are lumping apples in with oranges. And while I didn't specify it previously, no I don't agree with taxing "the truly poor" but I would try to get those in the upper levels of the lower 50% to get some "skin in the game" as well.

That's the truth...and the sad part is that about 45% of the country is doing their bidding for them, while taking it in the ass from them just as much as the rest of us...

Fish on...

Todd

I have never understood why the guy making $35-$40,000 a year parrots the talking heads from the right about why we shouldn't tax people making $500,000 a year a little more.


At the same time, i have never understood a really poor person saying we should tax the rich more....when that term to them is relative. To them the guy making $15.00 an hour might be rich.


Ultimately the really rich in this country are not really affected one way or the other, because they have tax shelters and trusts to put their money into. So the 'rich' that get taxed is usually the upper middle class and it rolls down from there.

A flat tax is a significant tax increase for those who can least afford it, and a significant tax decrease for those who don't need it.

Fish on...

Todd

"First of all, the discussion is about personal income tax, not corporate taxes so you are lumping apples in with oranges."

The fruit is in one basket and should NEVER be a seperate discussion. This nation needs x dollars of revenue to operate. Even after cuts it's gotta come from that basket.

Marty has a good handle on it IMO. "Taxing the rich more" is always a popular cry because it is taking the other guy's money because he is "rich". The 40k a year family is only paying tax on about $25k in adjusted income which means they pay about $2800 a year. Buffet's definition of rich is certainly different than many other politicians who think that the line should be at $200k to 250k. If you are married and make $250,000 with standard deductions you pay the feds $55k. That's a lot of money.

Bottom line is there are wayyy to many loop holes and with a sliding scale the flat tax would be way more efficient and would generate more overall income. However, the DC crowd doesn't need more money because they can't handle the amount they are getting now effectively.

Gee, thanks for pointing that out, then.

Do you need any help?

With spelling, for instance?

Because I can help you with that.

No problem.

I tutored slow kids when I was in high school, so it takes me back.

http://www.tampabay.com/specials/2010/graphics/wealth-graphics/


Interesting chart, 40% of Americans have almost 0 net worth.

the simplest solution is to tax all income equally while still keeping the progressive tax rates. if you make over 250K your rate is 35% (or whatever % we decide) and that applies to earned income and unearned income (capital gains, dividends).

You know what a tutor is, right, slow kid?

60 minutes this past Sunday showed a repeat about corporate tax rates. There are a lot of large corporations who have legally moved their corporate offices to Switzerland where the tax rate is 15%, but they can't bring their billions of dollars back into the U.S. without paying the 30%+ rates. So they stock pile billions over sees.
It was stated by some CEOs that if the U.S. rates were lowered they would bring about $1.2 trillion into our economy.
Everyone keeps saying we should tax corporations more, but we already tax them with the some of the highest rates in the industrialized world and it is forcing them off shore. Either close the loopholes or lower the rates.

You might read up on WB's income as it is out there. He pays little tax because of HOW he takes his income. I think he is doing 35% on income & 15% on the stock options and gains so he take less on the income side at 35% and goes for the lower & deferred things. All legal and done by every tax accountant for their clients if they can.

Loop holes to some are drivers to others. Track out the effect of not allowing second home interest deductions. It blows the hell out of housing, motorhomes, boats, a bunch of other stuff, and a HUGE NUMBER OF JOBS. Did not save the link but a lib foundation ran the stuff and found getting rid of loop holes sounds good but has the potential to set the economy on it's collective ass if done helter skelter.

Oh yeah someplace back on this thread someone said 50% do not pay tax because they do not make enough. What a total load of crap! I am retired and my gross is 50k and AFTER deductions I still pay 10% which is OK with me as long as everybody pays. I saved when I was younger in my IRA on $7 and $8 a hour and worked 6 / 10's a week SO I COULD RETIRE. This bit where you got kids? Pay less tax! Married? The same! Single bend over and prepare yourself. Everybody has their hand out in this country anymore. JFK got his ask not quote a little wrong for most people today.

Riverguy.....as far as I know.....I read the stats and could probably find them again......but then so could you. The figure wasn't exactly 50%, but damn close to it, who don't pay taxes. As in zero....zero. I suspect (without knowing) that that leaves most of the corporations out, as I'm reasonably certain that they pay some....perhaps not enough, but I doubt it is zero.
Somebody needs to hammer it into some thick skulls that a flat tax is a bad deal. Simple.....yes.....and very bad for low and middle income. If you take the amount paid presently by the rich and redistribute it, the lower classes portion will increase.....DRAMATICALLY!

I agree that this country needs to cut spending....I have a rough time believing that anyone thinks it is OK to spend more than you bring in......let alone continue doing it. Raising the debt ceiling...fk sake. Just keep those Obama bucks flowin', right?

uh huh....paying obligations with what?....hope? Just because you got a new credit card didn't make you rich again.....regardless what you believe.
Good to see you're still around sucking up oxygen. (thought I'd leave you a "goodie" to pounce on.....go ahead....you can do it)

Chuck......You read something wrong....I am assuming nothing.....you and I agree....I know we aren't taking in anywhere near what is going out........my remarks are directed at the self proclaimed "everybody is dumb who doesn't parrot me" guy. (BTW, I'm sorry if I lost your smalls. )

KK, I hope that somewhere along the line you figure out how to become your own man. You "furniture" is getting old, doooood.

"It was stated by some CEOs that if the U.S. rates were lowered they would bring about $1.2 trillion into our economy.
Everyone keeps saying we should tax corporations more, but we already tax them with the some of the highest rates in the industrialized world and it is forcing them off shore. Either close the loopholes or lower the rates."

Complete hogwash. The major corps have already announced their long term plans are global and overseas NOT in the US. They see little to no growth here. The majority of that dough including what's earned in the US is going to overseas expansion. No matter what you do for them they are NOT bringing the money or jobs back here. Plus the tax rate could be 90% and the existing loopholes would still have them paying zero or near zero in taxes. Doing FOR corp America doesn't work. We need to DO TO corp America to force them to do our bidding instead of the other way around. You should also remember in your 60 minutes segment the suggestion that we consider their overseas tax dodging as renouncing your citizenship. There's a start.

I can't understand how ANYONE who isn't a corporate executive, a shareholder, or a member of Congress can honestly believe that tax breaks for large corporations are good for America. They certainly aren't doing anything to help the middle class, of which you are a part if you aren't poor and don't meet any of the above criteria. That is, of course, unless you enjoy being gouged for the gas you buy to drive several miles to your local Walmart, which has systematically eliminated the small businesses that used to be within walking distance of your house, to buy a bunch of Chinese-made crap that will end up in the middle of the Pacific after it breaks within a few months, only to be taxed at a higher rate to make up for the taxes the corporations aren't paying (assuming your job hasn't been outsourced).

Corporations may enjoy lower tax rates by operating overseas, but the much cheaper labor they exploit overseas is at least as big a motivator for taking the manufacturing jobs that were the foundation of the middle class offshore.

The only Americans giant corporations help are the ones being given the tax breaks. For anyone outside that circle to believe otherwise (and vote in kind) is akin to cutting one's own throat and that of 99.9% of the people around him.

tax breaks can be a good thing if they are structured to create a certain behavior. a tax break for hiring american workers in a manufacturing plant would be a good thing. tax policies to increase manufacturing (and therefore the middle class) are a good thing.

of course, we could also impose tariffs on countries like china who impose high tariffs on our exports.

Looks like Obama is gonna' fix this mess by f'cking with those willing to sacrifice so much for this country.

http://www.cbsnews.com/stories/2011/08/15/eveningnews/main20092652.shtml

August 15, 2011 6:38 PM
Radical overhaul of military retirement eyed
By Sharyl Attkisson

WASHINGTON - The military retirement system has long been considered untouchable - along with Social Security and Medicare. But in these days of soaring deficits, it seems everything is a potential target for budget cutters. A Pentagon-sponsored study says military pensions are no longer untouchable - they're unaffordable.

CBS News investigative correspondent Sharyl Attkisson reports high-level, closely-held meetings are taking place at the Pentagon regarding a radical proposal to overhaul retirement for the nation's 1.4 million service members - a bedrock guarantee of military service.

The proposal comes from an influential panel of military advisors called the Defense Business Board. Their plan, laid out in a 24-page presentation "Modernizing the Military Retirement System," would eliminate the familiar system under which anyone who serves 20 years is eligible for retirement at half their salary. Instead, they'd get a 401k-style plan with government contributions.

They'd have to wait until normal retirement age. It would save $250 billion dollars over 20 years.

Douglas Holtz-Eakin, former director of the Congressional Budget Office says it's very important that the military attack its retirement issues. "We're talking about an underfunding that starts to look like hundreds of billions of dollars in the next 20 years. And if you want to maintain the core mission which is to defend the nation and have the strategic capabilities we need, we can't have all their money tied up in retirement programs."

Advocates say the new system would not only save money -- but would also be fairer. It would give benefits to those who serve less than 20 years. Right now, they walk away with nothing. And it would give more money to those in combat or high risk situations.

The proposal leaves a lot of blanks to be filled in, including whether to exempt current service members so their plans won't change.

CBS News spoke to some active duty troops who agreed costs must be cut - but worry the number of experienced soldiers will dwindle with no incentive to stay enlisted for 20 years.

The proposal is in early stages and would require Congressional approval. But it's clear that military retirement is no longer untouchable. A Pentagon spokesman said the military retirement system "is a fair subject of review" but no changes will be made "without careful consideration."

Nope you got it wrong. The driver on corporate profits was mostly individuals when I was a kid after WW11 but then we advanced pension plans, IRA's, 401k's, many many retirement savings plans. Most folks have them through some one like Vanguard ( my union pension ) or AIG Valic ( my IRA ) and THEY WATCH THE BLOODY RETURN ON INVESTMENT. Low return roll it into someone else's with low or no fees and stable returns. 7% is about the rock bottom one can stomach in a fund but the last 12 months mine did 12% but lost some with the latest fiasco in DC. Bottom line is these funds put huge pressure on corporations for profits in fact it was the main driver behind Weyco going RIT and laying off thousands to make more from lower taxes.

When I opened my first savings account it paid 4% and CD's much more. You can not save cash and protect it with the current Federal Reserve policies so it is stock, commodities or something and most folks do managed funds. It is the Catch 22 as lower corporate profits and dividends less return to the massive retirement funds and want to watch either party get there asses kicked high and wide? Start screwing with the boomers pensions or younger folks IRA's and 401k's growth as they figure Soc Sec is toast for them. Custer had better odds of surviving!

For real Rivrguy?

You actually believe that the driver behind corporate profits is our retirement accounts?

Really?????

I dunno if you've been paying attention or not... but the value of the Boomers' 401k and other retirement accounts have taken some HUGE hits in the last couple of years, while corporate profits are at an all-time high.

How do you 'splain that?

I don't believe President Obama is a member of the Defense Business Board. In fact, the board "is a United States Federal Advisory Committee that supports defense transformation by delivering senior management advice to the Secretary of Defense based on best practices from the private sector." Source. It was created by Rumsfeld in '01. "Only two of seven executives on the task force ever served in the military. Both left before 20 years and without any retirement benefit." Source. Any wonder why they don't seem to respect the sacrifices made by military retirees?

This is simply another attempt at big business and speculators to tap into money from the middle class. Same arguements as privatizing SS: having the military invest in a Thrift Savings Plan is just code for "give your money to Wall Street to use to Wall Street's advantage."

One of the reasons many people that went into the service back in the mid to late 80's got out was because our retirement for twenty years was only going to be 37.5% of our base pay. To get 50% one would have to stay in for 30 years. But many of us in the Navy were stuck in Ratings that were damn near impossible to reach Master Chief (E-9).

I believe the way things were at the time, an 1st Class (E-6) had to retire at 20, a Chief (E-7) had to retire at maybe 24, a Senior Chief (E-8) had to retire at 26?, and a Master Chief could retire at 30 years.

Many of us looked at the personal sacrifices made over a career and asked...Is it worth it? And many got out as a result.

Luckily someone saw that trend in the late 90's and early 2000's and changed the system back to 50% for 20 years, as retention rates dropped, even after the draw down of the early 90's..

I don't think screwing with the retirement system of the people sworn to protect this country is a good thing. You want to make cuts? Cut the retirement a member of congress or President gets. You'll get more bang for your buck, and you'll keep your experienced personnel in the service, and that could potentially save the lives of junior personnel.

pure class warfare. take from the poor and middle class and enrich the top 1%.

privatizing military retirements and SS is just another transfer of wealth from lower incomes to upper incomes.

this is the true class warfare that's being waged in america.... not the attempt to see high income earners pay an extra 3% in income taxes.

RVW posted: "Looks like Obama is gonna' fix this mess by f'cking with those willing to sacrifice so much for this country."

Like GoHarley wrote, there is no indication that this came from Obama. However, the subject is legitimate and germane, although hardly in the same class as closing loopholes or otherwise increasing taxes on the rich or super-rich. Just as the federal civil service retirement was over-hauled in 1984 (does that mean we should blame Reagan?), it's entirely appropriate to review and likely modify DOD retirement. The system has changed significantly. When Aunty M's husband enlisted, military pay was poverty level or thereabouts. Military pay scales changed when the country changed to the all-volunteer force, and the pay scale is much improved, especially for those who achieve time and grade. And just like the rest of the population, military retirees are living longer. As a result, military pensions, like the old civil service pensions and Social Security are less affordable to the nation.

The fact that it's military up for discussion makes the issue more sensitive because of the life and death prospects associated with military service. However, society already deals with that issue in the context of LE and firefighter retirement systems, which are far more generous than standard civil service. Just because it's a touchy subject doesn't mean that the status quo is the right or just outcome, and in the final analysis it does come down to a business analysis that has to make sense for the nation. Practically speaking, if DOD makes the "wrong" modifications, citizens won't join the all-volunteer military as people vote with their checkbooks, so to speak.

Sg

I'm not a billionaire but I want to be coddled. Unfortunately, neither party give a [censored] about me.

Here's two links that can answer a lot of questions about who pays what......

here

and here

WTR if you follow this training clip you could master self deprivation!

http://www.collegehumor.com/video/6477219/remix-e-trade-baby-loses-everything

Damn... that was pretty funny. Any excuse to take things lightly is becoming my motto.

Know what Steelhead, you are right, and Warren should pay his corporate taxes, all 10 years of the back ones especially.

Warren Buffet

"The company says it expects to "resolve all adjustments proposed by the US Internal Revenue Service" within the next year."

"It's not only rich corporations that are legally able to avoid paying taxes either. Some 1,400 millionaires paid no income taxes whatsoever in 2009, according to tax data from the Internal Revenue Service."

Kinda proves Buffet's point. Why has his company been allowed to not pay its taxes as far back as 2002? Would someone making only $60K annually be able to get away with this?

Stop coddling the rich fukkers.

Along with about 50% of the population who don't pay taxes and still get a refund. So if the rich don't pay, 50% don't pay, then who does .................. ah hell that only leaves the middle class! Oh craps they are disappearing as we export jobs and crush small business.

I got it none of us pay taxes and the government can take a ..........

Not necessarily, you can put restrictions on the types of investments, so you dont have 10,000 people who might enter retirement every day, find out their retirement followed the DOW into the toilet. As you get closer to retirement, most if not all investment advice is to be in little or no risk CD or bonds and not in stocks. Preferred stocks may work. Annuities are not immune from the stocks crashing. Most mutual fund managers do not beat the S and P 500 average, so thats not a reliable place either. On the other hand, congress spends it and hopes everyone behind you is paying enough. With only 2 workers paying for each retired person SS is in need of restructuring.

You assume that increased taxes on high incomes and corporations will not affect wages. All other payroll taxes are part of your burden cost to the employer. Ive seen teamster drivers take the bulk of the wage increases in a contract and actually CUT the starting wage of future drivers, that was 2006. Those contracts also designate how much is going to the wages, pensions and health care and older employees often want more money put into their pension.

Another similar practice (a recent change, I think) is to hire and collect for benefits not receivable for two years. Baffles me how that is even legal.

stick finger in light socket