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Buffett Rule: primer on the policy and the politics

Warren Buffett

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Comments (8)

  1. Submitted by Dennis Tester on 04/16/2012 - 01:02 pm.

    The “Buffet Rule” is dishonest

    The Buffet Rule would impose a 30% tax on people making at least $1 million. People who make that kind of money don’t earn a salary generally, they earn their living via dividends and capital gains, like Buffet does, and pay the capital gains tax of 15%.

    In effect, Obama wants to double the capital gains tax to 30%.

    Buffet said he wants his secretary to pay a low rate like he does (she made over $200,000) but she pays the wage earner tax rate on her estimated $200-500,000 salary which currently tops out at 35%. But average families earning $30-40,000 only owed 6% last year. People making $50-75,000 only owed an average 12%, while those making $75-100,000 paid an average 13%.

    So those who pay the current capital gains tax of 15% already pay a higher rate that the average income taxpayer in this country. More importantly, doubling the capital gains tax is not only couterproductive in a weak economy where you want to encourage investment, but it would only increase revenue to the government by about $5 billion a year. At that rate it would take 250 years for it to generate enough revenue to eliminate the $1.5 trillion annual budget deficit even if it was all dedicated to deficit reduction, which of course, it wouldn’t be.

    This is all about satisfying your envious base and their math-challenged friends to vote for the party of envy this fall.

  2. Submitted by jody rooney on 04/16/2012 - 02:18 pm.

    Mr. Tester please show me the evidence not the theory

    Some people may be math challenged but they aren’t reality challenged.

    Just like you Mr. Tester I learned that a lower capital gains tax was good in Econ 101 but that was in 1968 and the rules of the game have changed. Capital is much more free to move than it was in 1968. Unlike hard sciences economics is highly dependent on the rules in place at the time. If it weren’t private ownership and collective or public ownership would produce the same results and they don’t.

    In brief Mr. Tester your rationale is an excellent example of how you are being “played” by the moneyed interests. You haven’t learned the economy is global. Money goes where it can get the highest return and that isn’t necessarily here.

    Oddly enough if you want to become less reality challenged perhaps you want to review the tax rates when the US was at its most productive. Even going back to Regan rates would be useful.

    I also don’t suspect that Mr. Buffet is suggesting anything that is seriously going to hurt his ability to make money and he is pretty good at it. Gosh maybe he knows something you don’t, hard to believe I know.

  3. Submitted by Jackson Cage on 04/16/2012 - 03:19 pm.

    Only in the Tea Party…

    would you furiously pry open the lives of the poor (who get $6k a year from the gov’t) to make sure they don’t spend that pittance on drugs or junk food, yet blindly hand over $150,000 a year to the wealthy without ever asking them to prove they created a job. Honestly, that unique Tea Party combination of stupidity and immorality is astonishing!

  4. Submitted by Dennis Tester on 04/16/2012 - 03:47 pm.

    Money goes where it can get the highest return

    and gets taxed the least. We need a president who understands that if he really wants to create jobs and not just get re-elected by playing the envy card with the masses.

    • Submitted by Rachel Kahler on 04/16/2012 - 05:16 pm.

      No jobs

      We already tried the “job maker” tax break. It didn’t work. In fact, it failed spectacularly. Let’s repeal it.

  5. Submitted by Dan Magnuson on 04/16/2012 - 04:03 pm.

    Small Business Taxes

    I understand the desire to not put an additional tax burden on a small business. S-Corporations, Sole Proprieters, etc. have business income pass through and treated as personal income which could inhibit their ability to apply that business income to capital improvements or other expenses down the road.

    Perhaps someone with an accounting background can help me out – why can’t the tax code be changed for S-Corps so only the draw or salary taken by the owner is taxed at the personal rate, leaving the rest of the business income to be taxed at the (presumably lower) corporate rate. This would seem to separate the job creators from the non- job creators. If a sole prop or partnership reached the level of business income to make it worthwhile they could convert to an S-Corp, which is not that difficult to do. Could this be a work around?

  6. Submitted by Tim Droogsma on 04/16/2012 - 06:46 pm.

    It IS chump change

    The math makes it easy to realize what an incredible joke the “Buffett Rule” is. Let’s accept the estimate that it would raise $46 billion over 10 years. That’s $4.6 billion a year.

    How much is $4.6 billion? It’s how much money the federal government borrows EVERY 26 HOURS!

    So, okay, implement the Buffett Rule, and you’ve taken care of the deficit for Tuesday.What’s your plan for the other 364 days this year?

    Either Amy Klobuchar is lying when she says “That’s not chump change,” or she’s not bright enough to understand the math.

  7. Submitted by jody rooney on 04/16/2012 - 10:29 pm.

    Mr. Droogsma it’s the equity issue not the income

    The argument is changing a regressive tax code back to a progressive one.

    We are never going to compete with the low taxes and the high return in less developed countries. If you think we should Mr. Tester you are really misguided. In case you haven’t noticed we are a developed nation. Compared with other developed nations we do rather well. As a matter of fact several of the high taxed developed nations I believe had better growth than we did. Business thinking and investment for many investors is short term and the long term risks of high return investments in developing countries may not be well understood – or profits are so large that capital can be lost in the next revolution.

    Those have benefited most from our system of property rights have benefited the most – they should contribute more and they have the ability to pay. It isn’t class warfare it is freed warfare, because I have certainly met many people with money who have no class. I think they are Conservatives.

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