Warren Buffet speaks common sense; alarms most Republicans

[Pax]

Ben,
Roads are falling apart. Bridges are falling down. There are streets with pot holes that the government will never get around to fixing because they don't have the money. How do you propose that these streets and bridges be fixed without tax dollars?
All over the U.S., City, County and state governments are being forced to cutback on services because they are not getting enough revenue. The citizens are outraged and yet citizens(like yourself) demand the same services but don't want to pay for it.

[RGBVideo]

The point Buffett is making (and what he has made for years) is that people who earn money by working have to pay a lot higher tax percentages than the people who earn money by owning stuff and sitting on their arses. This is is an unbelievably unfair tax system.

You seem to be disagreeing with me for some reason.

What exactly is your argument here? I can come up with 3 possibilities. To be completely honest with you, I'd like to ask which one of them is correct (or is something else the matter which is frustrating you) :

(1) Wikipedia and US Congress which it uses as a source are misleading me and I have fundamentally misunderstood the U.S. tax system: Capital gains tax, when taxed at a highest possible tax bracket, (said to be 15%) is actually already at a higher percentage level than money earned from work at a highest possible tax bracket(Which is said to be 35%). I'd like to hear a further explanation on what I have misunderstood and how dramatically.
(2) It is actually very fair and intelligent to tax the richest billionaires (those who own wealth) in the country at a lower rate than the hardest workers (those who create new wealth), so there is nothing wrong with a taxation system of this type. I'd like to hear a further explanation on how this is very fair and intelligent.
(3) You, your family and your buddies are already paying taxes on capital gains, so my complaints are stupid and absurd because you should pay less and everyone else should pay more.

[Asher]

They have the highest corporate of any of the G-12. It needs to be lowered to 15 like in Canda.

Don't be disingenuous. No corporation pays the listed corporate tax rate.

[Kuciwalker]

Past price is not a fire-proof indicator of future price. In theory, the larger the monetary supply is compared to amount of wealth, the higher the price of gold will rise. In case you haven't noticed, both US and EU authorities are dealing with budget problems by enlarging their monetary supplies, ie. printing more money.

No, they are openly doing the opposite: dealing with budget problems through fiscal contraction. The Fed, and to an even greater extent the ECB, have a tight money policy.

This lowers the prices of dollars and euros compared to other goods, or IOW raises the price of gold compared to dollars and euros.

Except that inflation has been well below average during this period.

[Tupac Shakur]

Glad to see kuci and jag keeping you numbskulls in line.

[Ben Kenobi]

Don't be disingenuous. No corporation pays the listed corporate tax rate.

Wow, glad to see Lehman Bros were in such good hands that they thrived and prospered. Oh wait...

[Ben Kenobi]

Roads are falling apart. Bridges are falling down. There are streets with pot holes that the government will never get around to fixing because they don't have the money. How do you propose that these streets and bridges be fixed without tax dollars?

By using money that is pissed away on stuff that the state shouldn't be spending on. TX is actually pretty good wrt road maintenance. Not really sure where this complaint is coming from.

All over the U.S., City, County and state governments are being forced to cutback on services because they are not getting enough revenue. The citizens are outraged and yet citizens(like yourself) demand the same services but don't want to pay for it.

Uh, one. I'm not yet a citizen. Something about a period of residency. Two, I'm not demanding any services. I'd be happy if the government just left me alone.

[Ben Kenobi]

Because the "18 percent" (actually 15%) is his bracket. That's the tax on capital gains, ie. money earned from ownership, as opposed to working. His average paid taxes per earned money only goes up to 18 because he's taking some money from his firm to pay himself CEO wage, which gets taxed at a higher rate. "35 percent" is the rough average of the people working in his office, who pay taxes from their work, as opposed to ownership.

Uh, he pays himself, IIRC around 100k a year. He should be paying 35 percent on that but doesn't because of what he does to avoid paying more taxes.

Ben, seriously, you're being a ****ing ridiculous moron. Read and think after reading before starting your ridiculous strawman-arguments. He's not even "using loopholes", 15% is the perfectly ordinary and legal tax rate as set by US Congress.

Fine. I want to see why you believe that people who make less should be taxed more. I think that 15 percent is a legitimate price for everyone.

[Asher]

Wow, glad to see Lehman Bros were in such good hands that they thrived and prospered. Oh wait...

You clearly have no ****ing idea what you're talking about.

In 2009, GE had $10.1B in pre-tax income. Do you know how much tax they paid? They paid...zero. Not only that, but they got a $1.1B tax benefit.
In 2008, its effective tax rate was 5.8%.
In 2007, its effective tax rate was 15%.

The marginal corporate tax rate is 35%.

As I said, no sizable corporation pays that, or even close to that. They play all kinds of accounting tricks where they report their costs in the USA and the profits in low/no-tax countries, among other things. There's ridiculous loopholes that corporations engage in to keep their tax burdens very low.

[Ben Kenobi]

In 2009, GE had $10.1B in pre-tax income. Do you know how much tax they paid? They paid...zero. Not only that, but they got a $1.1B tax benefit.

Yeah, that's because of Obama. Gee, I wonder why Obama would exempt GE from actually paying corporate taxes.

[Asher]

Yeah, that's because of Obama. Gee, I wonder why Obama would exempt GE from actually paying corporate taxes.

Uh, no, it's not because of Obama.

It has to do with the fact that they reported billions of dollars worth of losses in the US (GE Financial) while billions of dollars of profits outside the US (GE Electronics).

[Ben Kenobi]

He has designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.

Nothing to see here, move along.

[BlackCat]

Can't be bothered to check if these has been posted earlier :

[C0ckney]

Yes, but collectively they cannot get rid of the dollars short of lighting them on fire.

who is talking about 'getting rid' of the dollars? these dollars are being used for gambling on the stock market and in commodities. to buy financial products related to them. if you create a bunch of dollars and they end up being used for this kind of gambling, they are not being used in the real (productive) economy, but they have economic effects.

Of course the price spikes were related to QE (at least, those that occurred on or near rumors/announcements of it). Anything that tends to promote economic recovery is going to cause oil prices to spike

yes, both the announcements and implimentation of QE caused prices of various items to spike. higher oil and food prices mean that poor people are much worse off. the poorer they are the harder this hits them. this was my original point.

When the economy recovers, of course people will want to use more oil, raising its price;

'
this is the key, has the economy recovered as a result of QE? i would argue very strongly that it hasn't, especially if we look at unemployment figures. what has happened to all the money created by QE? i don't think anyone has provided a good explanation for that. what it hasn't done is caused banks to lend more money to businesses in order to create jobs and stimulate the 'real economy'.

futures markets transmit that information into the present by causing the price to rise now. This efficiently deters people from using oil now, because the futures traders know that there will be more demand for it later and thus some of today's oil supply should be set aside for future consumption.

this is something i notice you do. you make a statement (which usually looks like it's come from a textbook). the statement is true, but it doesn't really address the issue or doesn't tell the whole story.

the point i was making was that QE is good for banks and big business and bad for poor people, especially the world's poorest, because of the effect on the prices of basic goods. if you are living on $1-2/day, a rise in price of food and oil is obviously going to deter people from using so much, because they will be able to buy even less of the most basic necesities! this has had and will continue to have disasterous consequences for millions of people.

QE does not lower bond yields; its effect on them is ambiguous.

no. it's clear in the short term they have a large impact on prices and yields, in the longer term there is some more room for doubt but there's a consensus that bond prices rise as a result of QE.

The way that you are thinking about this is ridiculous and incoherent. Imagine for a moment that instead of bonds I buy a barrel of oil now for $95. In six months I buy another barrel of oil for $100, and then I pour both barrels into a double-sized container. Then in another six months I sell half of the oil in that container for $100. Which oil did I sell? (Answer: it's a meaningless question!) The profit on those bonds occured when their price rose; it is only realized now when the bank is selling it. But the Federal Reserve is completely unnecessary in this process; the market price of the bonds is $100, so by definition the bank can sell those bonds on the open market for $100. It doesn't need the Fed to come in at all.

no. you're the one who needs to think about this harder. if the government takes an action which both raises the price of an asset in the market and provides a buyer (itself) for that asset, that is obviously a clear benefit to people holding that asset. there's has been an awful lot written about QE and how it has benefited the banks (at the expense of the taxpayer), and how this was achieved.

[C0ckney]

i have some (genuine) questions to people who support more QE.

1) what do you think the main effects of the QE, QE-lite and QE2 programs in the united states have been?
2) do you agree with the view expressed by many that they have failed in terms of things like growth and jobs?
3) how and why would future QE work better than previous QE? what would be its objectives, and what would define success and faiure?