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Warren Buffett on Taxes

October 05, 2010 | About:
There has been a large debate recently about extending the Bush tax cuts. Warren Buffett recently weighed in on the issue. Warren Buffett believes we should definitely not raise taxes on the middle class, and he discussed the possibility of lowering them. Buffett states it is obvious we need more money the question is where it will come from. He believes that the taxes should come from people like himself. Buffett states that he has the lowest taxes out of anyone in his office. Buffett also says that spending cuts should be considered. Buffett does not believe that raising taxes at the very top will hurt the economy at this time.

With all due respect to Mr. Buffett I think he makes a big mistake comparing himself to someone who makes $250K a year. To compare Buffett to a doctor is a bit of a stretch.



http://www.valuewalk.com/

About the author:

Jacob Wolinsky
My investment ideas have been inspired by many of value investors including Benjamin Graham, Charles Royce, John Neff, Joel Greenblatt, Peter Lynch, Seth Klarman,Martin Whitman and Bruce Greenwald. .I live with my wife and daughter in Monsey, NY. I can be contacted jacobwolinsky(AT)gmail.com and my blog is www.valuewalk.com

Visit Jacob Wolinsky's Website


Rating: 3.8/5 (23 votes)

Comments

batbeer2
Batbeer2 premium member - 3 years ago
LOL

According to Berkshire's proxy filing Buffett's salary is $100k Berkshire also pays for personal and home security services; $350k per annum.

Buffett also receives $75k for serving as a director of Washington Post Co.

With this in mind, Is it a stretch to compare him to a doctor for tax purposes ?

yswolinsky
Yswolinsky - 3 years ago
Lol good point Batbeer. He probably has a lower base salary than most CEOs of micro-cap companies.
jb85
Jb85 - 3 years ago
he is talking mainly about raising the taxes on long term capital gains (not earned income). Currently he pays 15% on long term capital gains. He says this should be higher, and he is right
DocMoney
DocMoney - 3 years ago
It is this part of Buffett's rhetoric that makes me cringe. Obama also considers everyone who earns more than 250k to be equals. However, there is a tremendous difference between someone who earns 300k and 30 mil per annum.

Buffett is old, rich beyond decency and of course he can say this to look good. When you are as rich as Buffett, it almost does not matter what your tax rate is. One can still do/buy anything he or she wants. However, to a physician (or lawyer, engineer, business guy) making 300k (and many do not), tax rates make a huge difference.

When Buffett talks like this, he sounds like a guy who just had a 7-course meal and insists that everyone else should be on a stricter diet.
DocMoney
DocMoney - 3 years ago
A couple of additional points (As you can see WEB has me really fuming now!):

1. WEB mentions NOTHING about balancing the budget/spending less. He just says the govt needs money and it has to come from somewhere. Imagine a kid coming to a parent saying "I need an x-box and the money has to come from somewhere!" How about not buying it?

2. WEB has already lived his life with the money; now he is giving it away like candy, perhaps because he is realizing that he will not be able to spend it (otherwise how do you explain him chasing every penny all his life and now a sudden paradigm shift?). Well, Mr. Buffett, now LET ME enjoy the money I earned, and please keep your newly-adopted socialist ideas to yourself, thank you very much!
Cowboy77
Cowboy77 - 3 years ago


It is this part of Buffett's rhetoric that makes me cringe. Obama also considers everyone who earns more than 250k to be equals. However, there is a tremendous difference between someone who earns 300k and 30 mil per annum.

Buffett is old, rich beyond decency and of course he can say this to look good. When you are as rich as Buffett, it almost does not matter what your tax rate is. One can still do/buy anything he or she wants. However, to a physician (or lawyer, engineer, business guy) making 300k (and many do not), tax rates make a huge difference.

When Buffett talks like this, he sounds like a guy who just had a 7-course meal and insists that everyone else should be on a stricter diet.

I couldn't agree more. There's a part of Buffett that you need a psychologist to explain. If he wants to pay more taxes then tell him to have at it. Don't give all his money to charity, give it to the government. He's a hypocrite and he's a typical liberal trying to win a popularity contest with populist rhetoric. His actions need to match his words.
cabdab
Cabdab premium member - 3 years ago


Now that Warren Buffett has taken it upon himself to become a propagandist for increased taxes for the only moderately wealthy, let’s ask Warren Buffett a couple of indirect questions. He seems to advocate approximately the same tax rate should be applied to people making incremental income above $250,000 per year as those making $10 million a year and above. It’s a bit ridiculous.

Mr. Buffett proudly boasts about his company’s outstanding growth via its book value. I took a real quick look at three insurance companies for the last ten to fifteen years in Value Line; Chubb, Allstate and Berkshire. A perusal seemed to show that those randomly chosen insurance companies had their book value grow in the same manner as Berkshires. No great genius on Mr. Buffett’s part, just an industry trend?

For the sake of discussion, let’s assume Mr. Buffett has a couple of hundred million of his multibillions of net worth invested in municipal bonds. If he gets a tax free return of 2% on his few hundred million in the muni market he would make approximately $4 million dollars on the two hundred million he invested.

Think about it, Buffett would get $4 million dollars of tax free income on such a small percentage of his fortune and he thinks that people who earn a few hundred thousand dollars a year should get an increased tax bill.

I think I read that one of Buffett’s children works at Berkshire Hathaway. I also believe I have read that he has either already given or plans to give each of his children approximately $50 million dollars. When you have the kind of wealth that Buffett has, you can afford to pay the taxes and still leave your children extremely wealthy. People at the lower level of wealth don’t have an equivalent option.

If he wants to opinionate on other people taxes why doesn’t he just give away all of his money instead of putting it into Foundations and taking the tax deduction for doing so. He actually has the gall to say he doesn’t even have a tax accountant.

By the way, from what I can tell, three companies; American Express, Coca Cola and Wells Fargo represent over half of Buffett’s equity investments. Looking at the financial performance of Mr. Buffett’s operating companies as reported in the most recent, confusing, almost 100 page annual report; it appears as if Mr. Buffett’s management skills, in the current economic climate, were not any better than those of his peers.

Since he seems to be a spokesman and model for so many, a public figure rather than a private one, why doesn’t he make a financial disclosure about all of his tax avoidance methods including his foundations, one of which I believe is being run by one of his family members. We would all be enlightened and learn something.

From what I can tell Mr. Buffett has created a public campaign of promoting the so called “working man” so no one really has the incentive to take a good close look at his true intentions and actions in his own life, which seem to me to be to protect himself from close public scrutiny. Increased taxes, to practically the wealthiest man in the world, mean almost nothing, to ordinarily wealthy people, they mean a heck of a lot. He’s just plain wrong. Stay tuned…





Posted by Shepard Osherow
www.sheposherow.com
Sivaram
Sivaram - 3 years ago
You guys are sorely mistaken if you think Warren Buffett is a tax dodger and doesn't want to pay taxes (as one poster above insinuates). As far as I can tell Warren Buffett hasn't changed his position on taxes; he has held this stance for decades. He would have been fine if taxes were raised on him a few decades ago.

This doesn't mean that he, or his companies, doesn't optimize and try to minimize taxes. But that's completely different from changing the tax system. Someone could be in favour of changing tax policy, while also optimizing their personal taxes. Nothing wrong with that.

Most of you critical of Buffett are, let's face it, greedy. You can argue against taxes from an ideological point of view but arguing the $250k threshold is almost silly. A household income over $250k is in the top 3% of American households. In nearly all societies, that would be considered the super-rich.

The threshold can be raised to, say, $500k or even $1 million and it wouldn't make any difference. I'll bet all of you will still be arguing that it isn't right. The fact is, household income over $250k is the top 3% income of all households and represents around 1.5% of all households. This is basically the highest class of society.

The vast majority of Americans (or Canadians--I'm in Canada) don't make money anywhere near these figures. As Buffett has kept arguing, it is almost an injustice to tax the poor and working class at a higher rate than the super-rich. I'm not saying let's all turn Communist and take away the wealth from the super-rich. I think the rich made their money and deserve it. However, I also think it's a bad society if some low income worker pays a higher tax rate than the super-rich. As Buffett has hammered home the point on many occasions, the payroll tax scheme makes no sense.

Also, let's not forget that the tax rate for the top bracket is the lowest it has been in the last 100 years, except for two periods: late 1920's and late 1910's. I'm not saying we should go back to the super-high rates of the 50's and 60's; all I'm saying is that the super-rich and their defenders have very little historical context.
batbeer2
Batbeer2 premium member - 3 years ago
Yes
jhodges72
Jhodges72 - 3 years ago
Shep,

You sound like a bitter old man.
DocMoney
DocMoney - 3 years ago


Now wait just a minute. INCOME taxes on the "wealthy" are MUCH higher than on the "POOR." So if there is any inequality, it is encapsulated in the above sentence, since the poor and wealthy both use the benefits of the tax dollars about equally (police, firemen, roads, defense, etc).

Now the CAPITAL GAINS/DIVIDEND taxes are THE SAME for everyone. Some people just happen to derive a significant portion of their income from these. How is this unfair?

In fact, most tax dollars are already paid by the relatively few wealthy.
Sivaram
Sivaram - 3 years ago




Now wait just a minute. INCOME taxes on the "wealthy" are MUCH higher than on the "POOR." So if there is any inequality, it is encapsulated in the above sentence, since the poor and wealthy both use the benefits of the tax dollars about equally (police, firemen, roads, defense, etc).


It depends on how we interpret the notion of "fair". It all comes down to whether you believe someone should pay a higher tax if they earn higher income or not.

Around 90% of income tax (but no property tax or sales tax) are paid by the top 10% of Americans. Is this unfair for the wealthy or not?

It depends on how you look at things.

As far as I'm concerned, that's not necessarily "unfair" because around 10% of the top Americans earn around 80% or 90% of the total income. For instance, 90% of the stock market (i.e. listed businesses) is owned by 10% of the population.

Some (the flat tax crowd) would have the 10% pay the same rate as the bottom 10%, even though the top 10% earn 90% of all income. Others in favour of progressive taxes, like me, think it's ok to tax the 10% (or 15% or 20% or whatever) at a rate more proportional to the total income they earn relative to the economy.
DocMoney
DocMoney - 3 years ago
If some people earn less than others, whose problem should it be?

In fact, let me submit the following. If we allow, for simplicity's sake, that the wealthy and the unwealthy benefit similarly from living in this country (national security, peace, personal freedoms, legal system, right to property, infrastructure, etc), then they should pay for these benefits similarly. This would entail a HIGHER tax rate on the unwealthy than on the wealthy, such that they can pay the same amount, and would cap the taxes on the wealthy so that they would not overpay.

However, that's not the way our system works. It works according to a derivative of Willie Sutton's law - "Why do you tax the rich?" - "That's where the money is."

The problem is compounded by the fact that many of the unwealthy hardly pay any tax at all under the current system.

One of my friends had plans to build something on his property recently. He has put the plans on hold. One of the reasons he cites is a probable income tax hike coming in 2011. Another reason is frustration. "Why should I create a job for someone," he quipped, "When government will just take my money and give it to them soon enough."

You are here on this site learning about investing, so you can be more wealthy. Why are you bothering? The fruits of all that time spent and skill acquired will be taxed away and spread around to people who are enjoying their free time instead of reading and researching.

bartolomo
Bartolomo - 3 years ago
There was a guy named Thomas Jefferson, whom I believe had something to do with setting the ground rules for this nation. Here's what he had to say about taxes:

"Taxes should be proportioned to what may be annually spared by the individual." --Thomas Jefferson to James Madison, 1784.

"Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." --Thomas Jefferson to James Madison, 1785."The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied... Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings." --Thomas Jefferson to Thaddeus Kosciusko, 1811.

Doesn't seem a whole lot different than what Warren is saying.

batbeer2
Batbeer2 premium member - 3 years ago
to people who are enjoying their free time instead of reading and researching.

You got this mixed up. Reading and researching IS enjoying free time.

If we allow, for simplicity's sake, that the wealthy and the unwealthy benefit similarly from living in this country (national security, peace, personal freedoms, legal system, right to property, infrastructure, etc),

Not so. The wealthy benefit much more. About half the things you name are of more value to someone with a large bank account.
jhodges72
Jhodges72 - 3 years ago




To my understanding of history, Jefferson was speaking in regards to the burden America was under of England. I believe the first "American" tax was imposed by President Lincoln in order to fund the civil war; and it was only suppose to last the duration of and for that war. Somebody forgot to say when.

There was a guy named Thomas Jefferson, whom I believe had something to do with setting the ground rules for this nation. Here's what he had to say about taxes:

"Taxes should be proportioned to what may be annually spared by the individual." --Thomas Jefferson to James Madison, 1784.

"Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." --Thomas Jefferson to James Madison, 1785."The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied... Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings." --Thomas Jefferson to Thaddeus Kosciusko, 1811.

Doesn't seem a whole lot different than what Warren is saying.
cabdab
Cabdab premium member - 3 years ago


Thomas Jefferson had slaves and Lincoln was willing to permit slavery where it already existed. These great people were not always right.
batbeer2
Batbeer2 premium member - 3 years ago
>> These great people were not always right.

I hope future generations judge our actions by todays standards, not by theirs.
yswolinsky
Yswolinsky - 3 years ago
This has been an interesting conversation, I plan to write a follow up article on the topic.

My main thoughts are that even if someone who makes 250k is in the top 3% he might look similar to buffett on a bell curve of income distribution but in reality they are far diff. In that top 3% lies a huge extreme in income and assets. Buffett has 50,000x as much wealth as someone with a million dollars. It is simply silly to compare the two.

That being said I do believe the Bush tax cuts should expire for the upper 3% however I think a one or two year extension would be prudent in this really weak economy. We need to balance the budget and that is not a liberal or conservative idea that is a very rational idea.

http://www.valuewalk.com/
DocMoney
DocMoney - 3 years ago
You got this mixed up. Reading and researching IS enjoying free time.



-For me and you. For other people, enjoying could mean having a drink on the beach, playing x-box or watching TV, or taking a leisurely stroll to the welfare office for their next check to pay for all that:)

Not so. The wealthy benefit much more. About half the things you name are of more value to someone with a large bank account.

-I think that the unwealthy call the police/fire, drive on the roads and use public utilities, and want peace and the right to a fair trial, liberty, and pursuit of happiness just as much as the wealthy.

Lol remember you said we should meet? I think we'd just never quit arguing! :)

But seriously, if someone is in dire need of, say, food and shelter and healthcare, one should be provided these. Yet, people should have a reason to be productive and create value, otherwise they will have a tendency to take it easy, like they do in Sweden and Norway.

dlight
Dlight - 3 years ago
So Doc,do you think that the wealthy and the unwealthy receive the same benefits our society have to offer? By the way, people aren't unwealthy, they're poor. And you obviously have no concept of what it's like to be poor. Poor people don't sit around enjoying their free time. Poor people don't sit around reading and researching because they have no money to invest, their parents had no money to invest, their grandparents had no money to invest. Their schools suck. Their transportation system sucks (usually a bus). If you had been born into poverty you would be poor today. Why? Because its not the quality of character that matters, its the opportunity one's given.

You should take one day a week and work at a food bank or a soup kitchen. Maybe you'd lose some of your arrogance and sense of entitlement.

batbeer2
Batbeer2 premium member - 3 years ago
I think we'd just never quit arguing! :)

No ;o)
DocMoney
DocMoney - 3 years ago


So Doc,do you think that the wealthy and the unwealthy receive the same benefits our society have to offer? By the way, people aren't unwealthy, they're poor. And you obviously have no concept of what it's like to be poor. Poor people don't sit around enjoying their free time. Poor people don't sit around reading and researching because they have no money to invest, their parents had no money to invest, their grandparents had no money to invest. Their schools suck. Their transportation system sucks (usually a bus). If you had been born into poverty you would be poor today. Why? Because its not the quality of character that matters, its the opportunity one's given.

You should take one day a week and work at a food bank or a soup kitchen. Maybe you'd lose some of your arrogance and sense of entitlement.


Dlight, you do not even know me. I was born into poverty, and in a poor country. I do have a very vivid concept of what it's like to be poor, discriminated against, etc. My parents did not give me anything other than an experience of living through a divorce. English is my second language. I walked to school in my home country and took a train and a bus to schools here in the US. I sought out/created an opportunity for myself, and am no longer poor today. I think character does matter, and if you have it, you will find or create an opportunity. I am very busy with my work today, and still carve out the time to read and research, because I am intensely interested in it.

Now to your question. No, the rich and the poor do not receive the same benefits that our society has to offer. Nor should they or could they, because some benefits cost money. However, the benefits funded by TAXES are essentially the same for the rich and the poor. The rich and the poor drive on the same roads, use the same airports and municipal parking spaces, call the same cops and firemen and go to the same courthouse. That the wealthy can afford goods and services beyond these basics is irrelevant to the discussion.

Lastly, I do not need to work at a food bank or a soup kitchen. As part of my job, I already help many people every day and many of these people never pay for the help they get. Getting sanctimonious will not help your argument in this case.
jhodges72
Jhodges72 - 3 years ago
I find it interesting that the European mentality that many of our ancestors brought with them to the new world is prevalant to the degree it is today. When we came to this world the first thing we wanted to do was change the American Indian because he didn't suit our way of life. Even though we felt like we did him a great service by conforming his savage ways, years later we found out that he was perfectly content with how he was to begin with and has been struggling ever since to get back to his roots. Many of you are doing the same with what you refer to as the "poor". Have any of you asked or thought that maybe this person or that person, who is poor...er than you, is content with himself and choses to be as such? I find it very arrogant for someone to assume that because a person is poor that he probably wants it any other way than what it is.
jhodges72
Jhodges72 - 3 years ago
I also wanted to comment in regards to an earlier poster who stated that if someone wanted healthcare - he should have it freely provided to him. I have a friend who is a doctor. He studied very hard in high school and did everything right. He had to make a lot of sacrifices and didn't get to partake to the degree the rest of us did. He had a goal. He received his scholarships. Took, I believe, 8 years of college. Worked a second job for some of those years. Started his practice and immediatley was faced with tens of thousands of school loans. If you think for a moment that just because he's a doctor that he has the obligation of providing free medical services to anyone, you're sorrily mistaken. His first priority is to take care of himself which is something most here should be worrying more about. If everyone made that their primary focus, poverty would cease to exist.
batbeer2
Batbeer2 premium member - 3 years ago
His first priority is to take care of himself which is something most here should be worrying more about. If everyone made that their primary focus, poverty would cease to exist.

Taking care of yourself is one thing. Alas, human nature is such that the poeple often take care of themselves at the expense of others. IMO, that's the prime cause of poverty.

Just as there is no limit to what man can do to improve his life, there is also no limit to what a man can do to worsen the life of someone else.
jhodges72
Jhodges72 - 3 years ago
batbeer, true however the doctor who isn't willing to freely provide medical support can not be accused of hinderance since it was not he who caused the poor man to be poor to begin with. You can't automatically assume that a poor man is hindered by his fellow man just because he isn't able to or doesn't want to provide for himself. Conversely, it is he who has often times hindered himself.
batbeer2
Batbeer2 premium member - 3 years ago
however the doctor who isn't willing to freely provide medical support can not be accused of hinderance since it was not he who caused the poor man to be poor to begin with

No argument there..

What I like to see is a doctor providing medical support where needed and ask for money later..... patients then pay if they in any way can..... that's the world I like to live in.

What I don't like to see..... a doctor squeezing the last penny from a patient without providing any real help; knowing he/she is in fact unable to help.

Having said that, litigation in the USA is a problem for doctors.
DocMoney
DocMoney - 3 years ago


Now let's not forget that at some point in our lives, many of us will need help. Someone acutely ill without cash to pay for treatment at that moment should be treated. Someone ill who cannot afford to pay due to overwhelming cost of healthcare should get a break. Speaking of practicing what I preach - I am a physician and according to our billing department, more than 40% of what we do gets written off, in large part, due to discounts and even freebies we give to patients. Then I pay all the taxes... Dlight - when you take my writeoffs and taxes on top of that - I keep around 40% of what I generate.

That said, I refuse to permit any attempt at shaming (and shearing lol) the well-off for their hard-earned (if fairly and legally acquired) wealth. I would rather we practice fiscal responsibility than spend with reckless abandon and then have to get creative about raising revenue.
jhodges72
Jhodges72 - 3 years ago
Entitlement has no place in society. Even God himself is not a respecter of persons which is a clever way for saying that you are not entitled to anything and everything regardless of your condition. The moral responsibility is up to each one of us and we all have our individual choice regarding it; not an obligation.
Cowboy77
Cowboy77 - 3 years ago
We should help the elderly and the unable. I feel we have a moral obligation to do that.

With that said, the problem is that the disingenious libs vastly overcatergorize who is unable so they can dole out free cash to potential voters. A willing class of lazy people then essentially vote themselves money from the public largesse so they can sit on their butt without making an effort to sharpen any skill whatsoever other than whining about how bad life is. If you don't think that there's a huge mass of simply lazy people then you've never done low income housing like I've done for many years. It's enough to make you sick. Perfectly capable people who've been made useless by self serving feel-good politicians who demand nothing back from the recipients other than a vote....for them!!
Cowboy77
Cowboy77 - 3 years ago


So Doc,do you think that the wealthy and the unwealthy receive the same benefits our society have to offer? By the way, people aren't unwealthy, they're poor. And you obviously have no concept of what it's like to be poor. Poor people don't sit around enjoying their free time. Poor people don't sit around reading and researching because they have no money to invest, their parents had no money to invest, their grandparents had no money to invest. Their schools suck. Their transportation system sucks (usually a bus). If you had been born into poverty you would be poor today. Why? Because its not the quality of character that matters, its the opportunity one's given.

You should take one day a week and work at a food bank or a soup kitchen. Maybe you'd lose some of your arrogance and sense of entitlement.
Oh, please! I missed that post. Nothing more grating than a lib who claims to work a food bank every Thanksgiving or so and then walks around the rest of the year doing the holier-than-thou routine waiting for the Pope to have them canonized and absolved of all their sins. Only they truly understand what it means to be poor, right? The rest of us are simply cruel and insensitive. Next comes the line about us being uneducated and poorly read.

Is it November yet?

Sivaram
Sivaram - 3 years ago


COWBOY77: "With that said, the problem is that the disingenious libs vastly overcatergorize who is unable so they can dole out free cash to potential voters."

You do realize that most of the poor citizens in America are in the conservative States, right? You know, the ones with the weakest welfare systems, low spending on free parks/libraries/arts/etc. GDP per capita (or income per capita) tends to be lowest in those conservative states.

Is that a coincidence or could there be some benefit to the liberal welfare systems supported by most liberals?

(Having said that, I admit that lax welfare systems provide a disincentive to work, especially for those engaged in the underground economy. However, that is such a minor issue in the grand scheme of things.)
Sivaram
Sivaram - 3 years ago
YSWOLINKSY: "My main thoughts are that even if someone who makes 250k is in the top 3% he might look similar to buffett on a bell curve of income distribution but in reality they are far diff. In that top 3% lies a huge extreme in income and assets. Buffett has 50,000x as much wealth as someone with a million dollars. It is simply silly to compare the two."

I disagree; I think you can compare the two.

First of all, the cutoff is an arbitrary point. Pick $1 million as the cutoff or $10 million or whatever. It makes no difference whatsoever to the argument here. Anyone with a houshold income over $250k is wayyyy above the typical household (the only exception is that some areas have high cost of living, such as California, so $250k isn't at lot over there.)

Secondly, the tax rate is a percentage. It's a proportional "burden" whether you make $250k or $2 million. So, yes, someone making millions is far wealthier than someone making hundreads of thousands; but the tax burden aspect of it is proportional.
DocMoney
DocMoney - 3 years ago


Secondly, the tax rate is a percentage. It's a proportional "burden" whether you make $250k or $2 million. So, yes, someone making millions is far wealthier than someone making hundreads of thousands; but the tax burden aspect of it is proportional.


By that rationale, why do the wealthy have to pay a HIGHER percentage when they already pay a larger amount?
yswolinsky
Yswolinsky - 3 years ago
You can compare them all you want and you are entitled to your beliefs, but I think most people thinking logically can see the obvious difference between someone with 1 million dollars in assets and someone with 50 billion dollars.
Cowboy77
Cowboy77 - 3 years ago


Sivarem: You do realize that most of the poor citizens in America are in the conservative States, right? You know, the ones with the weakest welfare systems, low spending on free parks/libraries/arts/etc. GDP per capita (or income per capita) tends to be lowest in those conservative states.

Is that a coincidence or could there be some benefit to the liberal welfare systems supported by most liberals?
Not according to the maps that I've seen. Quite the contrary. Nevertheless, I see a lot of our "poor" people with multiple flat screens and cell phones in their apartments. What is poor and what is broke?

As Earl Nightengale said..."Broke is a temporary situation. Poverty is a state of mind". I agree with that. I've seen it on a day to day basis. I've also seen that when someone's welfare was finally (and mercifully) taken from them that they miraculously found work. Go figure. Teach a man to fish...

Too many politicians are rewarded for keeping people in poverty. It's disgusting and counterproductive.

sandi
Sandi - 3 years ago


The Treasury Department says that the very wealthiest find ways, legal and illegal, to shelter a lot of income from taxes. So while the rate may be higher, they don't actually pay more taxes (proportionately) Of course the simple fact that 75% of the top 1-2%'s income is in lower taxed dividends. You are correct, for the most part dividends are taxed at the same rate. Of course some people buy stocks, others buy diapers and milk.

About 93% of the nations wealth is held by 20% of the population while 25% of the "upper" tax bracket pays only 86%. The bottom 40% only holds about 1% of the wealth.

Under Bush the top 1% had an 62% increase in income while the bottom 90% saw a growth of 4%

As far as the wealthy already paying the taxes - google Rockefeller farm subsidies. Please use this as a mere example of how the rich stay rich

Now wait just a minute. INCOME taxes on the "wealthy" are MUCH higher than on the "POOR." So if there is any inequality, it is encapsulated in the above sentence, since the poor and wealthy both use the benefits of the tax dollars about equally (police, firemen, roads, defense, etc).

Now the CAPITAL GAINS/DIVIDEND taxes are THE SAME for everyone. Some people just happen to derive a significant portion of their income from these. How is this unfair?

In fact, most tax dollars are already paid by the relatively few wealthy.

Sivaram
Sivaram - 3 years ago


COWBOY77: "Not according to the maps that I've seen. Quite the contrary. "

Sorry about this long-delayed response--didn't see this response before--but here is a map of US GDP per capita by state (2006 wikipedia data but shouldn't have changed much in the last few years). The darker the colour, the richer it is:



GDP per capita is not the same as income but it is correlated (none of this factors in cost of living or quality of living). Darker colour is better in the map above.

As you can clearly see from the map, the richer states tend to be the liberal ones: east coast, west coast, north-east and closer to Canada.

The poorer states tend to be the southern ones and southern midwest states, who are mostly conservative.

I'm not saying liberalism leads to wealth but the liberal ones do seem to be wealthier. Depending on your defintion of liberal and conservative, I would argue that a similar pattern holds in Europe and across the world (if we ignore the so-called (former) communist states).

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