Warren Buffett calls for a minimum tax on the wealthy

[Doc Savage Fan]

A) Warren Buffet is smarter than you.

B) Warren Buffet is right.

C) Anyone with income over $100k that isn't paying AT LEAST 30% does not care about this country. And I mean actually paying, not donating it or hiding it in tax shelters or other such evasive measures.

D) If you don't care about this country then go away.

Obama's effective tax rate in 2011 was 20.5%. Are you actually saying he doesn't care about his country and should go away?

Wow. Just wow.

 

[chucky2]

So, once gain, you demonstrate that Righties aren't interested in solving a very real revenue problem, but rather just in blaming other people for not solving it w/o you snip

Your argument is absurd. LISTEN TO WHAT I'M SAYING: snip

Blah Blah Blah. Read what I said above to silverpig. No need for duhversions, subject changes (that don't even match the topic at hand), etc. etc. Lets just stay on topic:

You all (including Buffett, including Everyone), view the yearly deficit and I'd think total Fed and State debts as unsustainable and needing attention. We can All agree on that I think, right?

How to help those two things...one is additional revenue through increased taxes/fees, the other is spending reductions. Spending reductions are taboo with The Left, and us fiscal conservatives completely understand that. We get that to keep your base, you need to keep the money flowing to them, else they start getting demoralized with your lack of performance for them, and then, don't turn out on voting day in the numbers you'd like, thereby threatening your chances for re-election. Same deal as for Republicans and business handouts.

So really what the subject of this thread is about is increasing the revenue stream through additional taxing. Now, one would think, looking at the amounts collected by the Fed and each State, that those quite insane amounts would be enough. One would also look at the spending habits, especially those of Federal Politicians, and quite clearly conclude they will not only spend every penny sent to them, but quite literally Trillions more than they have. It doesn't matter on what, so no need to have a BBBBBBBBBBUUUUTTT BUSSSSHHHH!!!!! whining piss down the leg moment, the fact is, they spend every penny plus either hundreds of Billions, or, Trillions more than they have. That is: They are crack addicts of the worst sort. They're not just stealing furniture out of houses to feed their habit, they're stealing furniture that hasn't even been built yet to feed their habit. Truly amazing stuff.

So now we come to the crux of the issue. We have your side, which has the fantastical idea to send these fools more money via taxation, which is already known will be immediately spent, no meaningful budget rationalization will be accomplished (effectively: Burp! More please!), and then we have at least in part my side, which says, what they are getting now is already too much, let them prove they can live within that means first, then we can talk about raising taxes.

Looking at the arguments for your side, we can see two things: 1. Anyone insane enough to actually advocate sending more money to Washington for them to shoot up with must see a massive problem needing to immediately - some would say it's past time to take care of, so more like late and immediately - be addressed. Why else actually send them money, and with such urgency? And 2., where is this money going to come from?

Who am I to tell you what you see? I'm just a no one, just like you! I'm not telling you the revenue problem vs. expenses isn't real, heck, I'm agreeing with you! (See? We can agree on some things!)

What I'm simply asking you to do is, put your money where your opinion is: You opinion is that in the income vs. expenses equation, the problem is both income and expenses (and judging by the past year or two Lefty comments on this board, touching those expenses is very taboo). Since that's your opinion, put your money towards fixing what you believe the problem to be. Don't be a greedy little attention whore like Buffett, and sign others up to pay for your opinion. Do that with your money*.

*Unless you live at the poverty line, or, with the additional thousands you should be sending the Fed/State, would then be at the poverty line. If that's your position, then, obviously, don't send anything extra in. If that's not your position, then you're a sorry hypocrite in the extreme if you don't send in extra money to boost that revenue stream as you are so apt to advocate for.

That should really be crystal clear now, right? No more need for duhversions, jealosy trips, tantrums, etc., correct?

:thumbsup: Glad we got that straightened out...

Chuck

 

[Sureshot324]

So for the past however many years its been available, Warren has been making sure to have his army of accountants send in 35% of his earnings to the IRS, rather than what they can get him down to? That is, he's been putting his money where his mouth is?

Let me guess...the answer to this is 'No'.

When Warren steps up to the plate himself, which he can do for years now, without waiting for any bills from Congress, let us know.

Chuck

I agree with Warren Buffet, and if I was as rich as him, I wouldn't donate one cent to the government. I would donate to charities where I felt all my money was being put to good use, not just some.

 

[chucky2]

I agree with Warren Buffet, and if I was as rich as him, I wouldn't donate one cent to the government. I would donate to charities where I felt all my money was being put to good use, not just some.

I agree with Buffett too, and would do that exact thing. My problem is, I don't trust ol Warren, not until he actually donates that money (pre-death, as in now, rather than after death). Put his money where his mouth is now, and maybe he'd start something with people who don't have some vendetta against the rich, thereby actually accomplishing many things at once.

Until he does that, he's an attention seeker who resonates with those who have some perversion with taxing people over what they're paying now...nothing more, nothing less...

Chuck

 

[Incorruptible]

America's wealthiest supported & benefited tremendously from the housing bubble- just look at what happened to their incomes at the time-

http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

They continue to benefit, because they own the debt that the rest of America is trying to pay down.

Which was started by the government, as well unless the rich literally forced people to take debt then it is not their fault

 

[werepossum]

Hogwash. Sellers need buyers. It's a zero sum game. The amount of money actually available for investment doesn't change at all.

Are you intentionally trying to break the Internet with stupidity? It is NOT a zero sum game, and the fact that sellers need buyers means nothing if those financially able to be buyers see no advantage in buying. If there is not a reasonable expected return on investment, no investment will be made, period. At least not in this country.

Obama's effective tax rate in 2011 was 20.5%. Are you actually saying he doesn't care about his country and should go away?

Wow. Just wow.

Major ownage.

I agree with Warren Buffet, and if I was as rich as him, I wouldn't donate one cent to the government. I would donate to charities where I felt all my money was being put to good use, not just some.

Agreed. My problem with Buffet is that he fights tooth and nail to pay less (maximizing his own wealth) while simultaneously demanding that "other people" pay more.

 

[Jhhnn]

Are you intentionally trying to break the Internet with stupidity? It is NOT a zero sum game, and the fact that sellers need buyers means nothing if those financially able to be buyers see no advantage in buying. If there is not a reasonable expected return on investment, no investment will be made, period. At least not in this country.

How can Rich people get liquid if nobody buys what they're selling?

How can you possibly contend that there will be less money for investment when one rich guy sells to another, leaving the same amount of money & assets in the economy? Voodoo?

 

[werepossum]

How can Rich people get liquid if nobody buys what they're selling?

How can you possibly contend that there will be less money for investment when one rich guy sells to another, leaving the same amount of money & assets in the economy? Voodoo?

Let's break this down.

1. Transactions occur when both parties have something the other wants more than does the other. The seller has stock or land or clown makeup he values less than the equivalent amount of money; the buyer has money he values less than the stock or land or clown makeup. That is the beauty of capitalism; both parties come out ahead.

2. Government almost inevitably takes a chunk out of this transaction. This is because once one rises above a pure barter system, there must be suitable infrastructure and a trusted and reasonably constant exchange media.

3. Whatever chunk government takes must be small enough that both parties still come out ahead. If the price less the taxes is perceived by the seller as worth less than the commodity, the seller will not normally sell. A seller may be distressed and have to sell, in which case he will not re-invest in that commodity in that market.

4. Both volume and value of every investment market vary with time based on value, total money supply, costs of transactions, and myriad other factors.

As an example, let us posit two scenarios involving an investor who has 1,000 shares of ClownCo in which he has invested $100,000 one year ago. Scenario #1: Currently those shares of ClownCo are worth $110,000, giving him a potential profit of $10,000 or 10%. Let us assume that his cost to sell the stock is 1%, or $1,000. Assuming that ClownCo is a reasonably stable company exhibiting reasonable growth, capital gains is 15%, and the seller is not distressed, he may decide that 7.65% net profit is an acceptable return. Assuming he finds a buyer willing and able to buy his ClownCo stock, he now has $107,650 with which he may buy another, more promising stock and the 1,000 shares of ClownCo are now worth $110,000. Once he re-invests, the total value of the stock market has just increased by $7,650 plus or minus the value change of the new stock.

Scenario #2: Currently those shares of ClownCo are worth $110,000, giving him a potential profit of $10,000 or 10%. Let us assume that his cost to sell the stock is 1%, or $1,000. Assuming that ClownCo is a reasonably stable company exhibiting reasonable growth, capital gains is 50%, and the seller is not distressed, his potential after-tax return is now 4.5%. Our seller may decide that 4.5% net profit is an acceptable return in this economy. Assuming he finds a buyer willing and able to buy his ClownCo stock, he now has $104,500 with which he can buy another, more promising stock, sit on, or invest outside this market. It should be clear that as the return drops, fewer people are willing to re-invest within that market. Money is fungible; dollars can be invested in virtually any nation. If he re-invests in American-traded stock, the value of the market has increased by $4,500 rather than by $7,650. He may also decide to hold the stock, which doesn't change the value of the market but does reduce the flow of money and taxable economic activity.

It gets worse. Stock prices are driven at least as much by demand as by the underlying fundamentals; it matters not how good a company may be if no one wants to buy its stock. As fewer investors choose to re-invest, stock prices must fall. The new owner may be faced not with whether to accept a 4.5% profit, but whether to accept a loss or hold out hoping to do better later. In this case the value of the stock is no longer $110,000 and the value of the market has gone down. As fewer people choose to buy stock, the value of the market drops. Thus there will be less money available for investment in our stock market, and likely less money available for investment in our nation as a whole.

 

[Jhhnn]

That's a rather long winded way of avoiding the question, werepossum.

All that sort of commerce took place when taxes were much higher, and they are still higher in most of the developed world. Americans pay taxes on all income, foreign & domestic, anyway, unless they're breaking the law.

You also confuse valuation & money, something very much at the heart of all speculative bubbles. Stock prices are not a measure of money. All tax revenues are spent back into the economy, anyway, creating liquidity in the economy in ways that simple one to one transactions do not. Money has to leak out of the profit based system, back down the economic food chain to maintain commerce. If it doesn't, then demand for products & services falls off, damaging share value. Which is where credit, taxes, & govt creation of money enter the picture.

 

[Fern]

-snip-
All tax revenues are spent back into the economy, anyway, creating liquidity in the economy in ways that simple one to one transactions do not.

Not when it's used to repay foreign held US debt, whether interest or principal.

And I believe our demographics are going to lead to less investment in the US stock market. As you age you shift away from equities and into debt. And when you retire you liquidate to spend on living expenses. Too few young people to replace our aging investors. And far too few with actual jobs affording a chance to invest in the market via 401k plans etc.

Fern

 

[werepossum]

That's a rather long winded way of avoiding the question, werepossum.

All that sort of commerce took place when taxes were much higher, and they are still higher in most of the developed world. Americans pay taxes on all income, foreign & domestic, anyway, unless they're breaking the law.

You also confuse valuation & money, something very much at the heart of all speculative bubbles. Stock prices are not a measure of money. All tax revenues are spent back into the economy, anyway, creating liquidity in the economy in ways that simple one to one transactions do not. Money has to leak out of the profit based system, back down the economic food chain to maintain commerce. If it doesn't, then demand for products & services falls off, damaging share value. Which is where credit, taxes, & govt creation of money enter the picture.

Actually it was a long-winded way of answering the question - although the sentence "Money has to leak out of the profit based system, back down the economic food chain to maintain commerce" convinces me you'll never find someone capable of explaining it to you. But Cliff notes:
1) Valuation IS money when an exchange is made.
2) If valuation goes down, there is less money to re-invest and less incentive to do so.
3) Much less of this kind of activity went on when taxes were much higher, which is exactly why rates were cut. I don't think ethically it's okay to tax a man whose money earns his bread at a lower rate than the man whose sweat earns his bread, but it's inarguable that low capital gains rates are a boon for the US economy. By making more investments profitable, the entire economy benefits. I also have some issues with low capital gains tax rates increasing valuation much faster than real consumable wealth is increased and the effect of that on our economy, but I don't pretend the effect itself isn't real.

 

[Jhhnn]

Not when it's used to repay foreign held US debt, whether interest or principal.

Which is an extremely small part of govt spending.

It's like adding a trickle to a torrent, anyway.

 

[raildogg]

Yeah, tax the heck out of people so they have less money to spend. Give the money to the Great Government. That will surely improve the economy.

 

[Jhhnn]

Actually it was a long-winded way of answering the question - although the sentence "Money has to leak out of the profit based system, back down the economic food chain to maintain commerce" convinces me you'll never find someone capable of explaining it to you. But Cliff notes:
1) Valuation IS money when an exchange is made.
2) If valuation goes down, there is less money to re-invest and less incentive to do so.
3) Much less of this kind of activity went on when taxes were much higher, which is exactly why rates were cut. I don't think ethically it's okay to tax a man whose money earns his bread at a lower rate than the man whose sweat earns his bread, but it's inarguable that low capital gains rates are a boon for the US economy. By making more investments profitable, the entire economy benefits. I also have some issues with low capital gains tax rates increasing valuation much faster than real consumable wealth is increased and the effect of that on our economy, but I don't pretend the effect itself isn't real.

1) True, and so what?
2)So when the value of real estate fell through the floor, there was magically less money somehow? Or was that false high valuation based on money that never actually existed?
3)Inarguable that low capital gains rates are good for the economy? Quite the contrary. On the way up, low rates encourage excess risk, encourage pumping & dumping, encourage excess churn, which creates instability. Excess risk is what created this mess, along with the illusion of safety provided by making it systemic. When it fell down, both the winners & the losers got liquid & have stayed that way, because the price of doing so was low. When facing large loss potentials, paying 15% in taxes is preferable. Loss potentials have to be much larger when tax rates are higher. High taxes encourage going long.

Commonly held misconceptions about the economy do not apply in deflationary liquidity traps. Potential returns must be very high to engage in risk when your money gains value stuffed into your mattress.

 

[werepossum]

That's a rather long winded way of avoiding the question, werepossum.

All that sort of commerce took place when taxes were much higher, and they are still higher in most of the developed world. Americans pay taxes on all income, foreign & domestic, anyway, unless they're breaking the law.

You also confuse valuation & money, something very much at the heart of all speculative bubbles. Stock prices are not a measure of money. All tax revenues are spent back into the economy, anyway, creating liquidity in the economy in ways that simple one to one transactions do not. Money has to leak out of the profit based system, back down the economic food chain to maintain commerce. If it doesn't, then demand for products & services falls off, damaging share value. Which is where credit, taxes, & govt creation of money enter the picture.

Actually it was a long-winded way of answering the question - although the sentence "Money has to leak out of the profit based system, back down the economic food chain to maintain commerce" convinces me you'll never find someone capable of explaining it to you. But Cliff notes:
1) Valuation IS money when an exchange is made.
2) If valuation goes down, there is less money to re-invest and less incentive to do so.
3) Much less of this kind of activity went on when taxes were much higher, which is exactly why rates were cut. I don't think ethically it's okay to tax a man whose money earns his bread at a lower rate than the man whose sweat earns his bread, but it's inarguable that low capital gains rates are a boon for the US economy. By making more investments profitable, the entire economy benefits. I also have some issues with low capital gains tax rates increasing valuation much faster than real consumable wealth is increased and the effect of that on our economy, but I don't pretend the effect itself isn't real.

1) True, and so what?
2)So when the value of real estate fell through the floor, there was magically less money somehow? Or was that false high valuation based on money that never actually existed?
3)Inarguable that low capital gains rates are good for the economy? Quite the contrary. On the way up, low rates encourage excess risk, encourage pumping & dumping, encourage excess churn, which creates instability. Excess risk is what created this mess, along with the illusion of safety provided by making it systemic. When it fell down, both the winners & the losers got liquid & have stayed that way, because the price of doing so was low. When facing large loss potentials, paying 15% in taxes is preferable. Loss potentials have to be much larger when tax rates are higher. High taxes encourage going long.

Commonly held misconceptions about the economy do not apply in deflationary liquidity traps. Potential returns must be very high to engage in risk when your money gains value stuffed into your mattress.

Please study the bolded and you perhaps may see my difficulty in continuing this conversation. My bad on the rest, I should have said "inarguable to 99% of us".

 

[Jhhnn]

Please study the bolded and you perhaps may see my difficulty in continuing this conversation. My bad on the rest, I should have said "inarguable to 99% of us".

Of course you're having difficulty, given that you seem to think that valuation is money. It is only when a transaction occurs, which was my original point entirely. Sellers need buyers for that to happen. One man's asset liquidation is another's asset acquisition.

Piasabird's original statement indicates that he believes otherwise-

At the present AMT does not affect Capital Gains, because they are not considered Income. Feel free to change that. I bet there are a lot of people considering cashing out of some or all of their stock positions just to avoid higher taxes. This could limit the amount of money available for investing going forward.

It doesn't limit the amount of money for investment at all, because the amount of money in the economy hasn't changed. Even the part taken by the govt is put back into the economy, invested in infrastructure, defense, education, child welfare & a myriad of other things that benefit us all. As the process continues, those things improve the climate for business and for the stock market in ways that simple market transactions cannot.

If I buy $1M in shares of XYZ from you, has any value actually been created? Is XYZ now doing more business, employing more people as a result? No. If the valuation fluctuates, that only affects the amount of money available to me, should I want to sell, not the amount of money in existence.

OTOH, the part of the deal you pay in taxes does create value, because they spend it on goods & services that otherwise wouldn't be created.

 

[werepossum]

Of course you're having difficulty, given that you seem to think that valuation is money. It is only when a transaction occurs, which was my original point entirely. Sellers need buyers for that to happen. One man's asset liquidation is another's asset acquisition.

Piasabird's original statement indicates that he believes otherwise-



It doesn't limit the amount of money for investment at all, because the amount of money in the economy hasn't changed. Even the part taken by the govt is put back into the economy, invested in infrastructure, defense, education, child welfare & a myriad of other things that benefit us all. As the process continues, those things improve the climate for business and for the stock market in ways that simple market transactions cannot.

If I buy $1M in shares of XYZ from you, has any value actually been created? Is XYZ now doing more business, employing more people as a result? No. If the valuation fluctuates, that only affects the amount of money available to me, should I want to sell, not the amount of money in existence.

OTOH, the part of the deal you pay in taxes does create value, because they spend it on goods & services that otherwise wouldn't be created.

The money available for investment is the money that people are willing to invest, NOT all money in the world just because it COULD be invested. By that standard there's an almost infinite amount of money available to buy SillyPutty statues of Pauly Shore, yet I'm betting you'll find very few companies making SillyPutty statues of Pauly Shore. (If there were such companies they'd be getting government grants and we'd all know about them.) If there is no profit in the stock market, because of taxes or otherwise, then no one will buy stock. This doesn't simply affect start-ups. Existing companies sell off stock to fund capital projects, or at least those without the political connections to get tax money do. When those capital projects pay off, those companies buy back that stock at its new, higher value. When government takes more tax money, it has secondary effects besides giving you a stiffy. Less profit means fewer attractive ventures which means few ventures funded which means less money in the stock market which means less money in OUR economy and more money in other nations' economies, or simply loaned to the government. Less money in the stock market means lower overall valuation (less competition for the same amount of stock) which means companies are less able to sell stock to fund capital projects which means less growth. It also means that when companies do invest, it's more likely to be in other nations.

 

[Pr0d1gy]

Obama's effective tax rate in 2011 was 20.5%. Are you actually saying he doesn't care about his country and should go away?

Wow. Just wow.

He could certainly care more. I get the feeling that some of you have no idea of what the tax rate has been historically or even when we started collecting taxes in this country to begin with, or who initiated it. You just sound like a young, uneducated kid spouting the philosophies of your local preacher to me.