Warren Buffet speaks common sense; alarms most Republicans

[Lorizael]

TX, with about 25 million people has routinely half the job creation in the nation with a state only consumption tax. Imagine what would happen if the feds and all the states switched over?

Wow, that's amazing! The federal government should make it so that states are required to have a population of 25 million. That way every state would have half the job creation in the nation!

[Ben Kenobi]

Wow, that's amazing! The federal government should make it so that states are required to have a population of 25 million. That way every state would hvae half the job creation of the nation!

You don't think it's significant that half of all jobs are created in TX? How many jobs would be created in the US if we were to assume that every state could reach TX job creation rates?

[Jaguar]

What does this have to do with WB consumption? this would not affect him one way or another (precisely the point), he would transfer some of his worthless electrons (as Jag called them) to the poor and middle classes via the government... he pays more, they pay less, everyone is happy assuming this kind of transfer was done...

It has everything to do with his consumption. Currently we produce a certain amount of things. Of these, Warren Buffett consumes some of them, and everyone else consumes the rest. We've established that taxing him won't force him to sell his house or anything, so clearly, Warren Buffett won't consume any less.

If you think about it as a pie, you aren't reducing Buffett's slice in size, so you aren't increasing anyone else's. The only way to give people more pie is to, well, "make the pie higher," as George W. Bush observed. Why do you think giving the government more paper that it can freely print makes the total quantity of goods that the US produces any larger?

[Jon Miller]

The problem isn't production but is that most people do not have enough money to consume.

There is a lot of money 'sitting around' right now, not being invested because of this.

That is why people love US treasury bonds/etc, they are all looking for investments which do not have to do with increasing production.

The reason why a lot of money is 'sitting around' right now is because money is mostly in the hands of the capitalists and not the poor/middle class consumers.

JM

[Lorizael]

You don't think it's significant that half of all jobs are created in TX? How many jobs would be created in the US if we were to assume that every state could reach TX job creation rates?

It might be significant, if it were true. But even if it were true, it probably wouldn't be relevant.

[Kuciwalker]

The problem isn't production but is that most people do not have enough money to consume.

There is a lot of money 'sitting around' right now, not being invested because of this.

That is why people love US treasury bonds/etc, they are all looking for investments which do not have to do with increasing production.

The reason why a lot of money is 'sitting around' right now is because money is mostly in the hands of the capitalists and not the poor/middle class consumers.

JM

Openly false. There is a problem of unused capacity. Income inequality has literally nothing to do with it; excessively tight monetary policy is the issue.

[Kuciwalker]

So, has anyone mentioned yet that Warren Buffet can already pay as much in taxes as he likes? ****ing idiot.

No, you're actually pretty dumb. Warren Buffet thinks that he and other similarly situated people ought to pay more in taxes because that would be better public policy. It is absolutely appropriate for him to advise that he and they all, collectively, pay more in taxes without him doing so alone.

You are more of a caricature and a buffoon than Asher ever was.

[Ben Kenobi]

The problem isn't production but is that most people do not have enough money to consume.

If you put more money in their pocket, you'd better believe they'd have more to spend.

[Ben Kenobi]

It might be significant, if it were true. But even if it were true, it probably wouldn't be relevant.

3 million jobs a months is irrelevant? If you include the Feds, that's 6 million a month.

[Imran Siddiqui]

No, you're actually pretty dumb. Warren Buffet thinks that he and other similarly situated people ought to pay more in taxes because that would be better public policy. It is absolutely appropriate for him to advise that he and they all, collectively, pay more in taxes without him doing so alone.

This. He is making a public policy argument and using his own experiences to show how he and similarly situated people can get away with paying less % of tax (and all rational actors would do so). He is arguing the government should reduce the incentives to get away with paying less, and that he'd be willing to take on those increased burdens.

[Ben Kenobi]

Are you also asserting that increasing the income tax paid by the wealthiest Americans would have no impact on the deficit?

Assuming that tax hikes for them have no effect on other brackets, you wouldn't touch the deficit. There's just not that many wealthy people.

When the FDR bracket was lowered, revenue actually increased. Stastically, the best way to get money out of folks like Buffett is to lower their taxes.

[OneFootInTheGrave]

It has everything to do with his consumption. Currently we produce a certain amount of things. Of these, Warren Buffett consumes some of them, and everyone else consumes the rest. We've established that taxing him won't force him to sell his house or anything, so clearly, Warren Buffett won't consume any less.

If you think about it as a pie, you aren't reducing Buffett's slice in size, so you aren't increasing anyone else's. The only way to give people more pie is to, well, "make the pie higher," as George W. Bush observed. Why do you think giving the government more paper that it can freely print makes the total quantity of goods that the US produces any larger?

the pie is not reducing for WB, but for everyone else it is... in principle if you give those who do not have enough $$$ to spend on consumer goods... you are increasing the consumption overall... while WB consumption stays the same and the overall income from US gov perspective stays the same, this is just an electron transfer from the one who will invest it into US treasuries/China/whatever, to many who will invest it in local tangible goods, like bread, fixing his house etc... thus increasing the total quantity of goods that the US produces.

[Kuciwalker]

Just to be clear, are you saying Warren Buffet is wrong?

Warren Buffet is making a number of points. One of his points is that some income that is treated as investment income or capital gains under the current tax code is, properly speaking, wage income (and therefore should be taxed as wages). This is a reasonable point that would be totally obviated if we moved from an income tax to a consumption tax.

His other point, regarding the intertemporal elasticity of consumption, is completely unfounded and almost certainly wrong.

Are you also asserting that increasing the income tax paid by the wealthiest Americans would have no impact on the deficit?

The deficit is irrelevant to this discussion. If raising taxes on them closes the deficit, fine, but since it doesn't alter the total quantity of goods and services and since it doesn't redistribute any of those goods or services it cannot actually increase the real wealth of any people.

[OneFootInTheGrave]

Warren Buffet thinks that he and other similarly situated people ought to pay more in taxes because that would be better public policy. It is absolutely appropriate for him to advise that he and they all, collectively, pay more in taxes without him doing so alone.

This is true, and I agree with him... but this alone will not sort US gov problems... still it would be a step in good direction

[Jaguar]

the pie is not reducing for WB, but for everyone else it is... in principle if you give those who do not have enough $$$ to spend on consumer goods... you are increasing the consumption overall... while WB consumption stays the same and the overall income from US gov perspective stays the same, this is just an electron transfer from the one who will invest it into US treasuries/China/whatever, to many who will invest it in local tangible goods, like bread, fixing his house etc... thus increasing the total quantity of goods that the US produces.

Giving people more money doesn't make bread appear. There's still the same amount of bread in the country as there was before you taxed Warren Buffett.