Super-tax the super-rich: an idea whose time has come. Again.
Posted on January 21, 2012Warren Buffett, one of the wealthiest men in the world, is famous for saying that his tax rate (17.7%) is lower than his secretary’s (30%).* Mr. Buffett makes a valid point. Right now, multi-multi-millionaires in the USA are paying their lowest tax rates since the Great Depression. Fiscal conservatives insist that lower taxes spur job growth and stimulate the economy. They are only partly right. As I will show here, lowering taxes can improve the economy, but only if you lower taxes on the middle class. Not the very rich.
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Super Tax The Super Rich. An Idea Whose Time Has Come. Again.
By marquismark Follow Thu, 1 Mar 2012, 9:09pm 8,090 views 88 comments
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Honest Abe says
Because if we actually pay our bills, rather than borrowing to pay them, **we will be forced to live within our means.
This is common sense that even you should understand Abe.
By **We I mean the wealthy congresspeople and those wealthy folks who influence their decisions. If they had to pay very progressive rates on their high incomes, then the wasteful spending on corporate welfare, military industrial complex, and rich lobbyists writing legislation would end.
They won't cut their own throats. But because of everyone's greed, they will gladly spend future generations money, or destroy this country in the long term for their myopic self interest.
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I would love it if conservative went back to meaning that we pay our bills, rather than meaning (supposedly) that we swear to selfishly not raise taxes from their lowest levels in 50 years, based on some transparent bullshit rationalization.
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Not with out a clear definitive answer on what we would use that money for. I'm sick of Washington sucking in money, and doing Dickall with it.
I'm all for a 20% tax increase across the board, and even a little something extra from the "super rich", in the name of redoing the majoirity of our Government agencies. All in house and not a dime out sourced, and any company that posts millions in profits or publicly traded doesn't get one thin red cent in incentives, tax breaks, tax rebates, ect. And we have a federal health care system from the school to the hospitals. And also we would have to clean up Washington the decades of corruption, that has fostered in seats that have been occupied since Duran Duran were on the charts. Some needs to go to Jail. Do all that, then come back and lets talk about the taxes we need to raise.
Because right now, everyone is taxed to death and not damn thing to show for it. Fat tax, gas tax, tobacco tax, alcohol Tax, and Gas is more expensive than ever, an alternative, has never been further away from realizing, and our health care costs have risen 70% since Obama took office and started all of his Sin Tax SHIT. Where in the FUCK is the MONEY GOING?
Leave the rich man alone, and leave me alone, go arrest a Congressman and a Senator if you want a standing ovation.
(Thank god someone got more creative than to use that talking point 1%, at least now it's easy to know who they are talking about.)
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TPB says
The military and old people. Try running for office on a platform of cutting military spending and social security and see what it's like to be Ron Paul.
To put it bluntly, Americans are too stupid to balance the budget. They will politically assassinate anyone who tries.
Again.......the PEOPLE are the problem, not the politicians.
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I would really like people to watch this. It is Bruce Bartlett, one of the key architects of the Reagan economic policy discussing with Bill Moyers the tax structure. It is devoid of hype, name calling and deals only in the rational. It is a fascinating, easy to digest, 25 minutes.
If Honest Abe and those who share his opinion will kindly watch this, I promise I will reciprocate by watching (with an open mind) any link you care to say send me of similar length. You can quiz me to make sure I watched it and I will do the same for you.
Then let's have a DIALOGUE. Is that still possible?
Ithttp://billmoyers.com/segment/bruce-bartlett-on-where-the-right-went-wrong/
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The rich will not put up with any tax increases. They'd rather see the states burst into flames and descend into cannibal anarchy. The Koch brothers can simply hire starving people with rations of meat and bread to protect their assets, expatriate their revenues to tax havens and enjoy shooting the survivors in helicopter hunting tours.
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By the way, here is the link:
http://billmoyers.com/segment/bruce-bartlett-on-where-the-right-went-wrong/
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david1 says
Has been on the books (passed by Congress) for over the last 15 years.
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marquismark says
Thanks for the video. Abe won't watch that or comprehend it. He's a troll's troll for the Fox news talk radio propaganda crowd. He literally memorizes their bs propaganda and makes it the core of his beliefs. If only he could realize he is in fact a sucker for the most massive advertising campaign in the history of the human race.
Again, great video. Gotta love Bill Moyers, and his reality based investigations.
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Thanks, Marcus. I'm glad you got something out of the video. Unfortunately, like you say, it's tough to get certain people to at least CONSIDER the facts, but I keep trying...
The worst part is I'm really trying to help them not get screwed. I actually care about them!
Yeah, many Reagan era people (including Bartlett and Stockman) have now come out, and at great personal risk to themselves, said that today's right has it all wrong and that Reagan would roll over in his grave if he saw how his legacy had been hijacked. These were the architects of supply-side! I wasn't a fan of Reagen but at least he was responsible enough to raise taxes when it became clear his tax cuts weren't working.
Fox News: the more you watch, the less you know.
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marquismark says
Sometimes not taxed at all, like capital gains on sale of residence, which the first $250K/$500K is effectively exempt.
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thomas.wong1986 says
Fair point. That is one of the few times capital gains laws favor the middle class more than the rich...
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marquismark says
You mean capital gains/losses are on the "sale" of ownership interest or the assets of an entity. They may be more (gain) or less (loss) than was paid over cost basis. Income that is produced from that investment as profits or dividend paid are taxed at normal income tax rates. There is a difference between gains and ordinary income.
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marquismark says
Who ever said, rich people only buy homes over $500K.
Im sure many live modestly and are savers.
The exclusion of gain applies to all income levels,
so its not particular to anyone class.
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Yes, obviously, you're correct. But I meant that $250 K to a middle income person is huge -- like retirement nest egg huge -- whereas it is pocket change to a very wealthy person. Frankly, I don't think anybody with an AGI over a certain amount should get that capital gain break at all.
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Rich and stingy isnt unknown, how you become and stay rich. Making and saving $250K or more isnt easy, spending it is.
But even the super rich will tell you.. its about controlling your wealth. If you cant control the first $250K of spending, there is little chance your able to control subsequent blocks of $250K.
Even with all my wealth, $250K is alot.. yes one can spend on a Italian Super Car, or spend on monthly necessities (food, gas, bills, and some toys) for the next 10 years. For me its the monthly necessities, therefore, my future is better secured.
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marquismark says
The tax laws cover not only individual filers, but also Corporate (C and S Type), Partnerships, and Non-profit entities.
I would favor tax treatment which would encourage greater investments by individuals, enterprises and other entities. It has shown to work.
What would the govt do with all the excessive taxes collected, redistribution of wealth or expanding the economy.
As California state govt, has demostrated twice over the past 10-15 years, when tax revenues increase due to Capital Gains, they foolishly "lock into" long term spending contracts and other social obligations, which quickly fall into deficit spending.
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Money gotten by speculation and manipulation (as most of the what the rich get is) should be taxed at 1950s rates to discourage them. Make these rich bums do some real work for a living and really earn money for a change... set em up with waiter, trucker, construction worker, teacher jobs.
The rich are but parasites who live off the backs of the real workers, and yet somehow in this bizzaro world we live in, they walk around as heros because they have learned the tricks of gaming the system.
They wouldn't have a penny if they weren't skimming it from the workers. Let all the workers stop working for one month and see what happens to the rich...
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thomas.wong1986 says
Thomas this sounds nice and it gets repeated all the time, but it doesn't actually work that way. The reason is new job creating businesses will consume that $1M dollars in expenses. The investors will get a tax break on their investment and hence, over the short run they will pay almost no tax on the $1M.
Today most investors want to sink their money into financial gambling. Most of those schemes focus on clever ways to shift costs to the tax payers, and strip assets, while calling them profits. These people care passionately about the tax rate for two reasons.
First they don't want to end up picking up the costs they have worked so hard to shove on to you the tax payer. Second, they don't have much in legitimate expenses to offset against their "profits".
Raising the tax rate would actually push investors from asset stripping to legitimate business investing, and help the economy.
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thomas.wong1986 says
How about paying down the debt? Failing that just balance the budget.
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I like the idea of the rich having to pay a large tax whenever the U.S. is engaged in military deployment anywhere in the world. I think if that was the law, we'd be at peace 99% of the time.
New Law: Anytime a single soldier or robot (including drones) is deployed anywhere for any time, that year the marginal tax rate is 95% for any income including capital gains over $1 million.
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iwog says
So you're telling me, everything Obama is saying he want's to do, is a LIE? He actually needs more money to replace the money that the last two administrations have squandered from self sufficient departments?
Or are you playing funny accounting, where you request money for the same cause, only to never actually use the money for that cause, but squander it on other more shady under the table deals. So next year, they can rally the voters to get behind raising money for the same cause that never got the money the last time around.
Iwog come on, you can do better than that. This is me.
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I'm really not sure what you're talking about. Tax money is going overwhelmingly to the military and old people, which is why any politician who actually intends to balance the budget through spending cuts is going to get crucified.
United States citizens as a group are not interested in spending cuts! VOTERS are the dishonest ones. When politicians lie, it's because the voters demand they lie.
Newcorp has about half the country convinced that if the government just stops spending on welfare, food stamps, and illegal aliens, we'd have a balanced budget. The debate itself is rooted in madness.
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thomas.wong1986 says
Huh? Yeah, except for this little clause, which is why nearly all salaries of key officers of major corporations are under $1M with Bonus payments many multiples of that.
"C) Other performance-based compensation
The term “applicable employee remuneration” shall not include any remuneration payable solely on account of the attainment of one or more performance goals, but only if—
(i) the performance goals are determined by a compensation committee of the board of directors of the taxpayer which is comprised solely of 2 or more outside directors,
(ii) the material terms under which the remuneration is to be paid, including the performance goals, are disclosed to shareholders and approved by a majority of the vote in a separate shareholder vote before the payment of such remuneration, and
(iii) before any payment of such remuneration, the compensation committee referred to in clause (i) certifies that the performance goals and any other material terms were in fact satisfied. "
Its a nice law, however, it does not appear to have any effect.
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What makes any of you libs feel entitled to someone else's money? Where did that entitlement mentality come from? What is the character defect that causes that character flaw?
What is it- Hate? Envy? Jealousy? A misguided sense of entitlement? Oedipus complex gone haywire? Dropped on your head? Both parents were lawyers?
Something caused the damage. Hope you all get well soon.
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Honest Abe says
I'm not entitled to anyone else's money. Why are you entitled to my money? Red states are talking my money because they can't make ends meet. Hate? Envy? Jealousy? A misguided sense of entitlement? Oedipus complex gone haywire? Dropped on your head? Both parents were Klan members?
Your alternate reality is showing again.
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Honest Abe says
I don't feel entitled to anyone else's money. However, I don't consider rent collection by parasites to be the money of the parasites. For example, banking is a common infrastructure component. Therefore, the use of money, including electronic money (e.g., debit cards, electronic checks), should not profit anyone.
The costs of developing and maintaining the electronic infrastructure (i.e., paying software developers) should be done via the miniscule taxation required to pay these developers. But no rent-profit seeking for the use of electronic money should be allowed. Right now bank executives rake in trillions for doing absolutely nothing. Furthermore, the bankers executives didn't build the system that performs electronic money transfers, software developers long ago fired did. Why should the bank executives get 1% of all debit card transactions? The transactions cost is like friction in the economic engine, it's bad for the whole economy.
The problem with the richest 0.1% is that they are that rich because they are parasitic rent takers. They didn't earn any of their wealth. They did not create any wealth.
I have no problem with people who have created the wealth they have keeping 100% - the costs of government services they use. I do have a problem with parasites keeping 90+% of the wealth they siphoned off of the rest of us while the wealth we created is taxed at close to 50% when you include Federal income tax, state income tax, sales tax, property tax, SS tax, Medicare tax, and so on.
When you add up all those taxes, the middle class producer who actually creates his wealth is taxed at 50% while Mitt Romney, who has never produced anything, is taxed at 14%.
Worse still, every person's employer taxes the employee before the government taxes him. A reasonable amount for an employer to tax an employee would be 10%, but in all profession it's much higher. I suspect that software developers are taxed 80-90% of their wealth production by their employee before the government even steps in. That is, a typical software developer probably produces 5 to 10 times as much wealth as he sees as pre-tax, pre-deduction income.
And you wonder why liberals have no problem taxing rent-seekers? If the alleged conservative principle of the grasshopper and ant were upheld, scientists, engineers, and other wealth creators would be paid far more than executives, stock brokers, and bankers. We all believe in the ant should be rewarded and the grasshopper punished. It's just that some of us are confused about who is which.
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iwog says
Well said.
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Honest Abe says
Abe,
The "libs" seem to be making arguments based on facts and logic, rather than emotion.
Any way you slice it, it's absurd for folks like Warren Buffet to pay less than his secretary. Now whether that means cutting middle class taxes to 15% or raising capital gains taxes to 30% is a different issue.
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Dear Abe,
I honestly would like you to consider this: Who makes the rules? The wealthy? The middle? The poor? You know as well as I do that the wealthy make the rules. There are 47,000 registered lobbyists and the VAST majority lobby on behalf of wealthy people and their interests. So politicians (democratic and Republican) spend an inordinate amount of time with wealthy people and, naturally, over time, they begin to adopt some of their beliefs. How much time do politicians spend with middle income and poor people, besides photo ops?
Now, it's only natural that wealthy people see things from their own point of view, but because they back politicians campaigns, their point of view carries and inordinate amount of weight.
Imagine if POOR people made the rules...I guarantee the laws would be different. The minimum wage would be much higher, worker protections would be stronger, etc. It's only natural. Those are the things poor people care about.
So, to your point about whose money it is: While the rich people are in POSSESSION of more wealth, I submit that the majority of that wealth was obtained from bending the rules to their favor at the expense of everyone else.
Case in point: The Iraq war. Wealthy people at conservative think tanks lobbied for that war, got no bid contracts to service that war and future US taxpayers ended up being soaked for 1 trillion dollars + interest. Who benefited at future taxpayer expense? The oil companies who keep their supply lines open thanks to a taxpayer funded foreign policy, Halliburton, KBR, etc. Who lost? Mostly middle income and poor kids with no other option but to enter the military, our economy and our standing in the world.
So, I submit that the "wealth" which you state is "theirs" isn't. It was only made possible by the fact that they made the rules to benefit themselves and lobbied the right people.
That's why I feel that taxing Mitt Romney at half the rate I'm paying is unfair. No matter how you slice it, it is simply indefensible.
I'm really trying to be nice to you, Abe. I'm spending time gently trying to illustrate my point. I would like you to surprise me (and everyone else) and reply with some illustrations, charts, etc to support your points. But the "liberal" labeling thing you do is really not changing anyone's mind here.
C'mon. Challenge yourself. Let's discuss Really.
Respectfully,
MM
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social security is self-funded and would be fine forever if the cap on taxed income was raised. it would still be find for a while as things are if the government was good for the IOUs it wrote itself.
and medicare isn't nearly as bad off as people would like you to think it is.
social security and medicare, the boogeymen of the right, both have their own dedicated taxes. warfare and the military does not.
that's where the money is disappearing. that's why we're broke. it's not because we're spending money on old people, it's because we're spending billions of dollars to defeat two-bit dictators armed with sharp sticks.
think about this: in 2003 we spent $54.4 billion on the Iraq war. the GPD of Iraq was $30 - $40 billion in 2003. We spent more in the first year of warfare than the GPD of the country for that same year and it still took us 9 years to leave a broken shell behind.
and right now the total cost of the war is estimated to be $3.7 trillion. that's $3.7 trillion send overseas and into the black moneypits of war profiteers and mercenaries.
that's where our money has disappeared.
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bob2356 says
I like your comment Bob, i really do.. but govt only turns around and get into larger spending programs. Would you mandate restrictions on spending and excess going to paydown all debt. Good Idea.. will it fly ?
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oliverks1 says
What do they exactly "consume" ? The capital given to them from Venture Capitalis who in turn get it from Rich Investors..
Consumption... i already listed...
New hirings.. which drives growth and increase in PR Tax
Purhases of goods for Inventory and Capital Equipment ... which drives growth and increase in Sales Tax
Rentals which drives ... new construction.. repeat in new hiring and purchases of material and capital equipment... and PR Taxes
Altogher the Spending multipler kicks in all from the investment dollars.
How else do you see the growth of Silicon valley over the past 30-50 years ?
financial gambling ? sure sounds like when some invested in new companies like Sun Micro, Seagate, and many others.. its all a gamble!
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marquismark says
We tried that, see the 60's-70s.. result foreign competition pretty much killed off the domestic industries. Auto, Steel, Semiconductors, etc etc.. And how many "Made in Japan" products do you have around your house ?
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thomas.wong1986 says
Helped by one-way free trade. Why? The US wanted to prop up Europeans, South Koreans, Malaysians, and Japanese economies to help them fight off their Communist parties.
With the Soviet Union gone, there is no reason to continue these policies.
That "Foreign Competition" was created by those governments taking an active role in nurturing industries, subsidizing both the capital and the training of employees necessary to create them. Again, there is no example of a country larger than a city-state industrializing itself without aggressive government assistance in the form of tariffs, education, and infrastructure.
Even 19th Century Britain came about from 400 years of non-stop wars and subsidies to encourage British Textiles and destroy Continental and, later, Colonial linen and cotton textile industries.
That's why Ghandi weaving was such a political act.
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thunderlips11 says
Japan, South Korea or Europe had no risk of falling into some Soviet shere of influence.
Much of the High tech dumping that occured by Japan happened after the fall of USSR. Even today, So Korea has dumped Nand products below costs. We (US Govt) had nothing to do with this!
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thomas.wong1986 says
That's absolutely untrue. There was a nascent Communist party that emerged in Japan right after WW2, the Communist Party was a major player in Greece, Italy, and France - even Britain had Communist Labor unions in major industries.
One of the selling points of the Marshall Plan was to entice Europeans from Communism.
Economic and Clandestine warfare against Communist Parties in Europe started in the 50s and continued into the 1980s, particularly in Italy.
http://en.wikipedia.org/wiki/Operation_Gladio
A good overview of the history of US policies in the Cold War to assist Europe and Asian economies - including supporting the creation of the Common Market - here:
http://www.salon.com/2010/03/30/us_stuck_in_cold_war/
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thunderlips11 says
Yes, there was a Communist party in Western European countries and in Japan as well. I never said there wasnt, but they were weak, except Italy in 1949. Chances of them falling into the Soviet block without Soviet Red Army occupation very little. And far less after the '56 Hungarian/Polish and '68 Czech uprising. After 1980 Polish Solidarity uprising that was the begining of the end of the Soviet Block in Europe.
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thunderlips11 says
Which was also (wrongly) extended to the USSR, which thankfully they rejected.
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thomas.wong1986 says
I am sorry, we are not communicating here or argument does make much sense. Let me try rephrasing this.
When you invest in a company, one that is starting out and creating jobs, you have expenses. These companies are usually created as LLCs or S-Corporations. When you do this, there expenses which are written off the taxes of the investors.
So if you invest $1M you actually get a tax break of about a $1M dollars. It actually is much more complicated than that, but it is good enough as a starting point. So a rich investor who invests in creating jobs pays no tax, not 15% or 30% but actually 0%. If the company does well, the investment becomes more valuable, but there is still no potential tax liability until the company is sold or profits materialize. Then you can covert your corporation (if you so desire) to a C-corp and avoid the personal tax liability on profits (the IRS is fine with this). So real investors creating real jobs don't need to pay much if anything in taxes.
People who want to buy fast cars and McMansions out of their earnings and profits do need to pay taxes. People engaged in financial speculation do pay taxes. If the income taxes on all earnings and income was raised to 70% you would have mad dash rush to invest in creating real businesses, because that is a legitimate way to avoid taxes.
What I am arguing is raising taxes on the rich (1%) actually helps create jobs. Is there something you feel is amiss with the above argument?