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I should pay more tax, says US billionaire Warren Buffett

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  • #46
    Originally posted by Imran Siddiqui
    I believe he means that he should be forced to pay more in taxes. Not sure if he's paying more or he isn't.
    Buffet has been saying this for years as he has kind of an old school 30's-60's view of society and the responsibilities of wealth. He's repeatedly said the rich should be taxed more to ease the burden on the lower and middle class plus he's famous for saying the US needs change tax policies if it wants to continue being a meritocracy instead of a land ruled by inherited wealth. Buffet was one of the only people bringing up this idea in the 80's when Reagan was embracing trickle down economic and the Laffer Curve.

    To his credit Buffet walks the walk and doesn't just talk the talk. He paid for his kids and grand kids to go to private schools & Ivy league universities but told them they'd have to earn any extras themselves by working. I remember reading that when his granddaughter complained that she didn't have a car to drive to college that Buffet handed her a bus pass. How's that for teaching kids the value of money?

    Despite being the second richest man in America Buffet supposedly still lives in the same track home he and his wife bought before he was filthy rich and he drives himself in a nonluxury car instead of being chauffeured in a limo. He's also been straight up with his family his whole life telling them they'll get a small inheritance but most of the money will go to charity; his famous quote is "I want to give them enough that they can do anything but not so much they can do nothing".
    Try http://wordforge.net/index.php for discussion and debate.

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    • #47
      Originally posted by Arrian
      Setting aside the fact that I'm generally on his side here, Mr. Buffett could "fix" this situation by paying himself what his receptionist currently makes, and paying her what he currently makes...

      -Arrian
      I doubt he gets paid much in the way of salary. His wealth comes from the companies he owns not a pay check.
      Try http://wordforge.net/index.php for discussion and debate.

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      • #48
        Patty, your claim is that placing the tax burden on the rich somehow makes the government beholden to the rich and that "very bad things" would happen to the poor.
        No Ramo, my claim is that letting the poor abdicate the civic responsibility of maintaining the government through taxation will lead tp "very bad things" for the poor.

        The generalization here would be that taxing a class more means that the government is more beholden to it.
        To the exclusion of other support. If the government is in fact functional only due to the support of a particular class, it is in fact defacto owned by it. This is a very simple concept Ramo. Taxation is a very basic form of participation in government, the fact that you pay taxes is the only reason why what you think about how they are spent is taken seriously/matters.

        In any case right now though tax burdens are disproportionate, they are not so in any egregious way that what I am talking about is taking place. But you know as well as I do Ramo that there are plenty out there who would be happy to tax the rich to oblivion. And unless we are going to increase spending along with that hike, that would mean a corresponding tax cut for the poor to almost nothing.

        The simple fact is Ramo that to disproportionately tax a group more for no particular reason does lead to two things. 1.) That class caring less and less about the wants/cares/needs of the others and 2.) a sence of entitlement/lordship over the other lazy noncontributing hanger-on’s which, though already the case now through your basic class snobbery, becomes a justified and factual position as the tax burden slides to more extreme disproportionate levels.

        Note Ramo, and this will be the first time I advocate anything concerning tax systems in this thread since you seem to have a problem identifying these instances, that I have no problem with the rich paying more whether that is in real dollars or following percentages.

        What I have a problem with is taxing something just because it is there, or taking from an individual more than can possibly be justified due to his participation in/use of government.

        People say that a flat tax is stupid because a percentage, though completely proportional mathematically, in reality means something different in real dollars to a poor person. I agree. The opposite is true though. That same percetage, though insignificant on cost of living/quality of life to a rich person of a certain level eventually reaches a real value that is out of all touch with the reason we are able to tax in the first place (ie your individual/personal buy in to support the system).

        [quote]I was applying a simple logical extension to that absurd belief (end member cases are useful in considering the validity of a claim). It's pretty easy to understand.[quote]

        I was already using the end case Ramo. The effects/conditions of a 100% versus 0% tax burden of the poor are not related in the slightest. Using one case as a counter to the other is a rather shabby strawman, nothing else.

        It's pretty easy to understand.
        It is, which is why your insistence of getting it TWISTED is ridiculous.

        Again, I did not advocate any particular ratio/percentage/regressive/progressive tax scheme."

        The obligations/responsibilities of citizenship are the same no matter what your class. We don't get to tax people just because they have more. Doing so is basically saying some people have more obligations/responsibilities than others, which can easily be followed with more rights/privileges/entitlements than others.
        "The DPRK is still in a state of war with the U.S. It's called a black out." - Che explaining why orbital nightime pictures of NK show few lights. Seriously.

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        • #49
          Whats the idea behind low taxes for the rich?

          That instead of putting their money in banks they will invest it in more productive ways?
          I need a foot massage

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          • #50
            Whats the idea behind low taxes for the rich?
            Nobody is talking about low taxes on the rich. Did somebody here advocate this?

            What I am talking about is a rate that is leads to the same taxes for everyone, effectively.
            "The DPRK is still in a state of war with the U.S. It's called a black out." - Che explaining why orbital nightime pictures of NK show few lights. Seriously.

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            • #51
              Originally posted by Barnabas
              Whats the idea behind low taxes for the rich?

              That instead of putting their money in banks they will invest it in more productive ways?
              It's partly so they won't leave the country and take their skills etc (and tax paying potential) with them. It's why a lot of tax regimes are set-up with other countries' tax regimes in mind.
              Last edited by Dauphin; November 2, 2007, 09:19.
              One day Canada will rule the world, and then we'll all be sorry.

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              • #52
                And partly, at least here in the US, because the government doesn't have the right to tax someone just becasue. Or at the very least they have to have some pretext other than "just because" or "because you have more," or at least they are supposed to.
                "The DPRK is still in a state of war with the U.S. It's called a black out." - Che explaining why orbital nightime pictures of NK show few lights. Seriously.

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                • #53
                  Why not lower the general income tax rate, but raise the capital gains tax rate to a level equal with the general income tax rate?
                  I'm about to get aroused from watching the pokemon and that's awesome. - Pekka

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                  • #54
                    Originally posted by Patroklos
                    What I am talking about is a rate that is leads to the same taxes for everyone, effectively.
                    Same in absolute terms? Same in percentage of earnings terms? Same in percentage of disposable income terms? etc...
                    One day Canada will rule the world, and then we'll all be sorry.

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                    • #55
                      The capital gains tax, in my understanding, is lower than the income tax because (the theory is that) a lower capital gains tax encourages investing, which is good for the economy. (This is largely "Reaganomics" theory, if I understand that term correctly).

                      Basically, you choose to invest when:
                      (potential return)*(probability of return)-(costs of investing)-(tax difference) > (savings interest rate)

                      As you can see, taxes are an element there, so lowering taxes (on capital gains) encourages investing.

                      Income taxes based on labor income do not have the same equation; you always want to work, you can't gain money by not working (unless you have a severance package anyway ), so there is less incentive to lower (labor) income taxes.

                      My personal feeling is that temporary capital gains tax adjustments are appropriate in recessions (or other times where investing is a) more risky, and b) necessary to pull us out of a recession); but they should be temporary, and when the recession is ended they should go back to the higher level. However, it is a very complex economic model, and it ends up being a political problem with political solutions (raised or lowered based on the political climate), rather than economic solutions (some guy like Greenspan calculating an appropriate marginal tax rate each year based on economic trends). I feel that anyone who truly supports this style of economic reform should prefer someone at the Fed determining the CG tax rate, but of course Congress would never allow that, their largest and most significant power being given to a presidential appointee.
                      <Reverend> IRC is just multiplayer notepad.
                      I like your SNOOPY POSTER! - While you Wait quote.

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                      • #56
                        Originally posted by Patroklos
                        And partly, at least here in the US, because the government doesn't have the right to tax someone just becasue. Or at the very least they have to have some pretext other than "just because" or "because you have more," or at least they are supposed to.
                        Say what? The government has the right to tax for any reason. Unless you are saying the American people demand a reason, but using the phrase "have the right to" is confusing in that context.
                        “I give you a new commandment, that you love one another. Just as I have loved you, you also should love one another. By this everyone will know that you are my disciples, if you have love for one another.”
                        - John 13:34-35 (NRSV)

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                        • #57
                          I think one question, by the way, has to be why we permit tax shelters. Not that we can prevent people from putting their money elsewhere; but, unless I'm missing something significant, we should be able to easily determine the amount of gains (or losses) made on transactions in the US (say, NYSE or NASDAQ transactions); and then tax accordingly, if you are a citizen or resident of the US. I realize our tax laws aren't organized around this (or are they?), but they should be.
                          <Reverend> IRC is just multiplayer notepad.
                          I like your SNOOPY POSTER! - While you Wait quote.

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                          • #58
                            Say what? The government has the right to tax for any reason. Unless you are saying the American people demand a reason, but using the phrase "have the right to" is confusing in that context.
                            You are right, I should have said the "American people demand a reason."

                            However, from reading the constituiton is is clear they should tax equally within a certain type of tax. You are welcome to disagree
                            "The DPRK is still in a state of war with the U.S. It's called a black out." - Che explaining why orbital nightime pictures of NK show few lights. Seriously.

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                            • #59
                              The simple fact is Ramo that to disproportionately tax a group more for no particular reason does lead to two things. 1.) That class caring less and less about the wants/cares/needs of the others and 2.) a sence of entitlement/lordship over the other lazy noncontributing hanger-on’s which, though already the case now through your basic class snobbery, becomes a justified and factual position as the tax burden slides to more extreme disproportionate levels.
                              1. I don't see how any of this has to do with the rights of poor people. You claimed that they were in jeopardy in the case of what you called rich "ownership" of government. That's was what I was quoting, remember?
                              2. During, say, the 50's the upper tax bracket was at 91% (i.e. far more than Buffet is arguing for). How was your claim manifest at the time, and how did the alleged apathy of the upper class compare in a substantial material gains for the poor (in comparison to the pre-New Deal era or nowadays)? Similarly, Europe has higher tax rates at the upper end; the same question applies here.

                              In any case right now though tax burdens are disproportionate, they are not so in any egregious way that what I am talking about is taking place.
                              The upper income tax bracket is at ~30%, while the lowest is negative (due to the earned income tax credit). Why would tweaking those numbers a little (primarily by raising it at the high end and lowering it toward the middle and taxing investment like income) as Buffet would suggest truly make the rich more terrible? For that matter, if the poor were taxed at 20-30% in a flat tax regime (which would have to be the case to maintain the federal budget), how exactly would the attitudes of the rich compensate enough to cause a significantly greater than 20-30% improvement in the poor's standard of living (since you claim that "very bad things happen" when the poor are taxed at rates far lower than the rich)?

                              If the government is in fact functional only due to the support of a particular class, it is in fact defacto owned by it.
                              Only because you define ownership in a really ****ed up way. If money is taken by force, that generally doesn't imply ownership over its uses.

                              People say that a flat tax [...]
                              I repeat:
                              Buffet pays half the federal rate (note that it would be even more regressive if state taxes were included) as his secretary because capital gains are taxed at just over half the rate as the highest income tax bracket. And since the very rich (like Buffet) get the vast majority of their income from investments, while everyone else gets most of their income from labor, this skews the tax burden.

                              People say that a flat tax is stupid because a percentage, though completely proportional mathematically, in reality means something different in real dollars to a poor person. I agree. The opposite is true though. That same percetage, though insignificant on cost of living/quality of life to a rich person of a certain level eventually reaches a real value that is out of all touch with the reason we are able to tax in the first place (ie your individual/personal buy in to support the system).
                              1. Why is a flat percentage representative of the gains people get from civil government? If it broke down, I can guarantee you that Bill Gates would lose a greater percentage of his income than the poor.
                              2. Why should tax rates be proportional to what people get out of government? You apparently believe that government exists to increase your income, while most of us think government's role is to make a better society in ways the private sector is less capable of doing.
                              "Beware of the man who works hard to learn something, learns it, and finds himself no wiser than before. He is full of murderous resentment of people who are ignorant without having come by their ignorance the hard way. "
                              -Bokonon

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                              • #60
                                However, from reading the constituiton is is clear they should tax equally within a certain type of tax. You are welcome to disagree
                                Sixteenth Amendment:
                                The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
                                "Beware of the man who works hard to learn something, learns it, and finds himself no wiser than before. He is full of murderous resentment of people who are ignorant without having come by their ignorance the hard way. "
                                -Bokonon

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