NYT Warren Buffet - A Minimum Tax for the Wealthy

[Koolblue13]

Unfortunately its not. A flat tax hits poor people much harder than rich people. If I'm only making $20k a year the loss of $5k at a 25% tax rate will hit me much harder than someone who loses $5 million making $20 million a year. He still has $15 million left, I am now well below the poverty line.

It is fair and if collectively we are all paying an amount that hurts, maybe we will be more motivated to find ways to reduce that percentage.

It's a lot more fair than the "take it from the rich people" avenue and certainly better than hammering on our middle class, like we are now, that will only create more poor people.

[endzone_dave]

I don't mind paying more taxes than someone working at Wal-Mart, they are fighting just to make ends meet. I do mind paying more taxes than someone making $125K per year, they aren't trying to make ends meet, they are trying to get a nicer house, nicer car, more electronics... If they are struggling to make ends meet, it's likely they are living a lifestyle beyond their means.

[TMK9973]

It seems a foregone conclusion that some sort of higher tax for the higher income is going to happen. Eaither a higher tax rate or a limit on deductions. I just hope whatever "Amount" they come up with, they put in something to re-adjust it every year. Its where they messed up on the AMT. When they came up with it they didnt make it adjust for inflation.

[SteveFromYellowstone]

It is fair and if collectively we are all paying an amount that hurts, maybe we will be more motivated to find ways to reduce that percentage.

It's a lot more fair than the "take it from the rich people" avenue and certainly better than hammering on our middle class, like we are now, that will only create more poor people.

I don't think you understand. Say there was a "fair" 25% flat tax, that is going to murder me while the rich will shrug it off. This has already been done to death. What you are advocating would put a lot more people into poverty. Not only that, in pretty much every case it drastically reduces revenue.

[The Evil Genius]

Sorry. But that is complete crap. Are you even taking into account cost of living differences around the country? Are you seriously saying 250k in the NYC area is rich? Yet if we moved to the midwest making maybe 75% of that with the same standard of living we have now we would be middle class. That makes absolutely no sense. You can't just put a simple dollar amount on middle class. Sorry, but we are middle class here. Certainly not poor, but if you think we're living high on the hog on that type of salary you're blind.

I live in Northern California so I think I know a little about high cost of living. But my wife and I pull down around 150k is gross income. We are well above the average and it shows.

If we made another 100k a year, we would be more than rich.

Why do people have a hard time admitting that when they are in the top 2-3% of all wage earners that they are the rich?

[Tulane Skins Fan]

It is fair and if collectively we are all paying an amount that hurts, maybe we will be more motivated to find ways to reduce that percentage.

It's a lot more fair than the "take it from the rich people" avenue and certainly better than hammering on our middle class, like we are now, that will only create more poor people.

Its really not as fair as a progressive tax code. There have been a multitude of studies on this, and it is generally accepted that progressive tax systems are the most fair.

It has to do with diminishing returns, or the inverse of that if you will. Your first 20K is more valuable than your first 20K over a million made to you. The first 20K actually has more value because you have less of it. Hence, a progressive tax system is more fair.

[Popeman38]

I don't think you understand. Say there was a "fair" 25% flat tax, that is going to murder me while the rich will shrug it off. This has already been done to death. What you are advocating would put a lot more people into poverty. Not only that, in pretty much every case it drastically reduces revenue.

So you don't want "fair". You want a MASSIVELY progressive tax system that takes a smaller percentage from low income earners and a higher percentage from high income earners.

25% of $15,080 is $3,770 ($11,310)
25% of $50,000 is $12,500 ($37,500)
25% of $100,000 is $25,000 ($75,000)
25% of $250,000 is $62,500 ($187,500)
25% of $1,000,000 $250,000 ($750,000)

See, a flat tax of 25% makes everyone pay the same. Your argument about it "hitting the lower class harder" is true whether the tax rate is 10% vs 35%, or 25% vs 25%. The lower income brackets ALWAYS feel the tax more than the higher brackets. The only way to prevent that is to make the tax rate of the highest bracket 90%, and the truly "rich" would still bring home more money than the lower brackets. Say the lowest bracket is 0% and the highest is 90%. The lowest bracket individual will still only bring home $15,080 (Fed Min Wage for simplicity sake) while the highest bracket member ($1,000,000 for simplicity sake) brings home $100,000.

But you can't do that. This isn't pre and post-WWII America anymore.

[Tulane Skins Fan]

So you don't want "fair". You want a MASSIVELY progressive tax system that takes a smaller percentage from low income earners and a higher percentage from high income earners.

25% of $15,080 is $3,770 ($11,310)
25% of $50,000 is $12,500 ($37,500)
25% of $100,000 is $25,000 ($75,000)
25% of $250,000 is $62,500 ($187,500)
25% of $1,000,000 $250,000 ($750,000)

See, a flat tax of 25% makes everyone pay the same. Your argument about it "hitting the lower class harder" is true whether the tax rate is 10% vs 35%, or 25% vs 25%. The lower income brackets ALWAYS feel the tax more than the higher brackets. The only way to prevent that is to make the tax rate of the highest bracket 90%, and the truly "rich" would still bring home more money than the lower brackets. Say the lowest bracket is 0% and the highest is 90%. The lowest bracket individual will still only bring home $15,080 (Fed Min Wage for simplicity sake) while the highest bracket member ($1,000,000 for simplicity sake) brings home $100,000.

But you can't do that. This isn't pre and post-WWII America anymore.

But in a progressive tax code with marginal rates, everyone pays the same amount on each dollar earned. That's why its fair. Everyone pays 15% of the first 15K they make (just throwing out numbers), and everyone pays 20% of the NEXT 50K they make, and so on.

Its not only more fair to have a progressive tax code, but its better for the economy. It allows EVERYONE to spend money on things that keep the economy going.

[Mad Mike]

It is fair and if collectively we are all paying an amount that hurts, maybe we will be more motivated to find ways to reduce that percentage.

It's a lot more fair than the "take it from the rich people" avenue and certainly better than hammering on our middle class, like we are now, that will only create more poor people.

So how fair is it that the rich are "taking it" from the poor? That works for you?

The Forbes 400, the wealthiest individuals in America, hit a new group record for wealth this year: $1.7 trillion. That’s more than five times the $300 billion total in 1992. In recent years, my gang has been leaving the middle class in the dust.

The fact is that your math does not add up. A flat tax would take even more from the poor. It would crush them while it would have minimum impact on those who can afford the most.

What is fair? - Baseball does not have the same revenue sharing system as the NFL, as a result the same big money teams regularly dominate the game. In contrast, the NFL is far more successful because revenue sharing creates a more even, FAIR playing field. Even the big market teams benefit in the long run because the better NFL product creates more fans.

This really isn't an us vs them issue. If we don't correct this imbalance the rich WILL eventually suffer too. Who is going to buy their products and services if they have all of the money? And a quick look through the pages of history will tell you what happens when the disparity between the haves and have nots grows too wide. The poor get desperate and the rich end up with their heads on pikes.

[GhostofSparta]

Good to know though that we can quit our jobs tomorrow and live our lavish lifestyles forever because we're rich! So can all of the married cop/teacher combos around here because they bring in that type of income also.

Yes, if a teacher/cop combo pull in a combined $250k/year, they are rich. Why do I say that? Because according to this site, the average teacher salary in NY state (which is the highest paying average state) is $72,708. The average for a cop in NY state is $112,537 (and that includes state troopers, not just local cops, so it might be driving that number up). So if a teacher making the average salary was married to a NY cop making the average salary, they'd pull in $185,245 a year combined. So any married couple with a salary of $250k/year is making 35% more than the average statistical pairing.

Arguing whether or not somebody is "rich" is an argument in semantics. But when you can say statistically that somebody is in the top 2-3%, that's a simple fact. Making 35% above average is a fact. Saying "Sure, I'm making 200% more than somebody in Iowa, but my lifestyle costs more so we're in the same boat, really" is semantics.

[mrcunning15]

I don't believe you. Not for an instant.

You honestly expect me to believe that when a business buys a widget for $950, and sells it for $1,000, that they pay taxes on $1,000?

I know that retail sales tax works that way.

But now we're bring in state/local sales taxes, into a thread about the federal income tax?

http://www.fairfaxcounty.gov/dta/business_bpolrate.htm

Rate based on gross receipts.

[JimboDaMan]

So you don't want "fair". You want a MASSIVELY progressive tax system that takes a smaller percentage from low income earners and a higher percentage from high income earners.

25% of $15,080 is $3,770 ($11,310)
25% of $50,000 is $12,500 ($37,500)
25% of $100,000 is $25,000 ($75,000)
25% of $250,000 is $62,500 ($187,500)
25% of $1,000,000 $250,000 ($750,000)

See, a flat tax of 25% makes everyone pay the same. Your argument about it "hitting the lower class harder" is true whether the tax rate is 10% vs 35%, or 25% vs 25%. The lower income brackets ALWAYS feel the tax more than the higher brackets. The only way to prevent that is to make the tax rate of the highest bracket 90%, and the truly "rich" would still bring home more money than the lower brackets. Say the lowest bracket is 0% and the highest is 90%. The lowest bracket individual will still only bring home $15,080 (Fed Min Wage for simplicity sake) while the highest bracket member ($1,000,000 for simplicity sake) brings home $100,000.

But you can't do that. This isn't pre and post-WWII America anymore.

I don't understand this post. By your logic it is YOU who doesn't want "fair" because "you can't do that".

I don't agree with the logic to your post, that because it would take a 99% tax rate for the rich to feel the same pain as the poor then progressive tax rates are not an option.

---------- Post added November-28th-2012 at 11:58 AM ----------

http://www.fairfaxcounty.gov/dta/business_bpolrate.htm

Rate based on gross receipts.

Not an income tax. A business license.

I get it that technically this makes your statement valid. But we're talking about $40 on $100K in sales. Up to a max of $300 on that $100K, but that's primarily service businesses that don't resell $950 widgets. This is not much in the way of a gross revenue tax. It's based on gross revenue, sure, but there's an attempt made to adjust the tax rate for lower-margin businesses.

[Destino]

I live in Northern California so I think I know a little about high cost of living. But my wife and I pull down around 150k is gross income. We are well above the average and it shows.

If we made another 100k a year, we would be more than rich.

Why do people have a hard time admitting that when they are in the top 2-3% of all wage earners that they are the rich?

High wage earners are just that, highly paid people. Rich is when wealth has been accumulated. Not sure why it matters though, taxes aren't applied based on rich or poor, they are based entirely on income. Which is a neat distraction being that the really rich make most of their money as capital gains.

[The Evil Genius]

High wage earners are just that, highly paid people. Rich is when wealth has been accumulated. Not sure why it matters though, taxes aren't applied based on rich or poor, they are based entirely on income. Which is a neat distraction being that the really rich make most of their money as capital gains.

I know. I posted it on #14 of the first page. I wished/hoped that "all income from Capital Gains, Interest and Dividends to be counted and taxed at the same level as your "normal" income".

[Corcaigh]

http://www.fairfaxcounty.gov/dta/business_bpolrate.htm

Rate based on gross receipts.

This isn't Federal Income tax which is what we're talking about here. The argument from some on the right is that a change to the top Fed tax rate will curtail investment and job growth because it will impact all revenues in certain small businesses.