Monday, August 22, 2011

Class Warren Fare

In these contentious days of partisan politics and disastrous economic debts and deficits, America looks to one man to demonstrate the leadership it takes to bring the warring factions together, to put country before party, and to compromise on ways to cut costs while raising revenues.

And that man is, of course, not Barack Obama...who is currently splish-splashing in the waters off Martha's Vineyard, and snapping at the bubbles which bloop out from his swim trunks.

No, we're talking about mega-billionaire Warren Buffet, who recently wrote an editorial stating that the "super-rich" (such as himself and his friends) have been "coddled" by the government long enough, and need to start paying their fair share. He even points out that his personal tax rate is less than that of his cleaning woman (although as we recently learned from Arnold Schwarzennegger, some cleaning women end up getting "super-rich").

To rectify this, Mr. Buffet suggests that taxes be raised on all of those "super-rich billionaires" (defined by Barack Obama as those who earn $250,000 a year, which is only 1/4th of 1% of a billion) and all of those darned people who invest in the stock market, who must be zillionaires - right? RIGHT?!

Wrong. The taxes Mr. Buffet suggests would mainly fall on the backs of small business owners. And raising the capital gains taxes would discourage investment and force struggling corporations to cut back their operations and employees.

Moreover, experts have calculated that if the government taxed all of the "super-rich" at 100%, it would barely make a dent in either our debt or deficit. While all economic activity generated by those people and their investments would come to a sudden and permanent halt.

But Warren Buffet is a man who knows a little about money - and a lot about his own money. And he clearly feels that he's getting away with fiscal murder and wants to be reined in. Mind you, he won't send the goverment (which is to say, the American people) one red cent voluntarily, but he'll do so if the law demands it.

So by all means, let's have a bipartisan effort to pass a new "Warren Buffet Tax," which is sky high and applies only to Warren Buffet. Such a bill would enjoy broad cross-party support, it would bring in a boatload of revenue and, most would encourage Warren to keep his fat mouth shut.



Angry Hoosier Dad said...

So, if you find one rich guy on a guilt trip who will say the things progressives want to say, you can imbue him with absolute moral authority over the rest of us. We are all under-taxed super-rich now.

DavidD said...

‎" 'Buffett regularly lobbies for higher estate taxes. He also has repeatedly bought up family businesses forced to sell because the heirs’ death-tax bill exceeded the business’s liquid assets. He owns life insurance companies that rely on the death tax in order to sell their estate-planning businesses.' "

Anonymous said...

It's just one little Bill of Attainder. We can make an unconstitutional exception, just once, can't we? It's in a good cause!

WMD said...

If he feels soooo bad about it, why doesn't he just write the IRS a check and leave the rest of us out of it. How can these people be so stupid. You could tax those people but who actually believes that it ends there? They're still going to want their profit margins and the price of everything goes up and guess who ends up really paying?

John the Econ said...

Isn't it interesting how every time a "rich" person advocates higher taxes on "the rich", it's some other future "rich" person who is meant to pay? Most of Buffett's fortune will never be taxed. He's already seen to that. If he really wanted to make a point we could respect, he'd write a check to the US Treasury for the difference between what he's actually paid and the rate at which he claims his secretary pays. He won't do it.

I do laud that he's given the bulk of his fortune to charitable purposes. However, I have to ask: Why did he did give it all to the Gates Foundation instead of the government of which he says is so much in need? (and has supposedly done some much for him via this "coddling" of which he speaks) Why is the Gates Foundation so much more worthy, and regarded as a better trustee of Buffett's fortune that the US Government?

Why doesn't Buffett and his supposedly under-taxed "rich" friends advocate a "wealth" tax, instead of higher "income" taxes? Say, 5% of their net wealth? Is it because income taxes mainly affect those who are likely to become rich; not so much those who already are?

This is but one reason I believe taxing income is evil. We should be taxing consumption instead. At least that way "the rich" would be paying "their fair share". (as the Progressives like to say)

Suzy said...

I can't believe anyone in this country believes what the "super rich" government says about the "super rich" all the time. This administration should have a 0% support level in the polls....

Pete(Detroit) said...

The upside of taxing 'consumption' is that it encourages us all to consume less. The down side is that all the producers are hit w/ lower demand, and sales of 'big ticket' items will move off shore (see also the Danish appliance store marketing to Germans)

TheOldMan said...

Another problem with switching to consumption taxes is that I've already paid taxes on the money that I have and now I'll pay more taxes when I spend it. said...

Don't forget, Buffett donated about 31 billion (with a "b") to the gates foundation in part to shelter it from estate taxes. It's easy for a guy worth billions to suggest people worth a tenth, hundredth or even less of his net worth pay some exorbitant rate. He'll have billions left and his lifestyle won't be impacted at all.

However, those small business owners and mere millionaires will see a big difference. I find it astounding that a guy with his background is willing to sell people who want to be like him down the river. I got mine, so screw you!

Colby said...

Oh, I wish I could remember the exact statistics on this, but it is something like: If you took 100% of the money the top 10% make, it would run the government for, like two days or something. The libs know this, but to them it's not about the money at all. They just want to get even. "Those people don't DESERVE all that money."

Why don't liberals see that it is the little guy who eventually takes it in the shorts when you tax the crap out of so-call "wealthy" people? I work for a group of wealthy people and I pray every day they get even MORE wealthy so I will continue to be employed by them. It is my job to try and make them more wealthy, and they reward me (and a few hundred others)for it every single week.

It really pisses me off when some ass-wipe lib starts whining about the rich people that give us jobs and that make things we want and need.

Andrew said...

There are several different ways to calculate totals, based on how you assign the various let's-pretend corporate holding shells like The Gates Foundation as 'personal wealth', but yes, if the entire net worth of all the billionaires/zillionaires/megamillionaires in America were seized and confiscated outright at 100%, it would run the Federal government for about two weeks at most in a best-case scenario.
Which is probably fine with the Obamabots, since all these rich people are potential obstacles to a truly all-powerful State.
As the Dem senator from NJ puts it, "It's a tough fight, but we have got to eliminate the rich." Himself and his friends excluded, I assume. Some animals being more equal than others.

JustaJeepGuy said...

If, as you say, "Which is probably fine with the Obamabots, since all these rich people are potential obstacles to a truly all-powerful State," how come so many are giving so much to help re-elect "Duh Won"? I guess maybe they expect to be part of the "ruling class" after the "welfare class" takeover?

Stilton Jarlsberg said...

@Readers- Good comments thoughout! Regarding a consumption tax, I doubt that it would ever be allowed to replace income tax...but might appear soon to supplement it. With "tax rebates" given to the poor and politically favored, of course.

Anonymous said...

When Lehman Brothers went under, one of Mr. Buffett's companies took a portion of Lehman over via the courts and gave $2.5 billion of assets in bonuses to the management that caused Lehman's failure. Part of those assets were mine, as part of my "secured" bond holdings in my retirement IRAs. Mr. Buffett can first write a check to me for the $115,000 he took from me. I feel just like the GM bond holders that were illegally shafted by this administration, yet nothing ever happens to the powerful and wealthy "Friends of Obama."

Oh, remember the Obama sales pitch that the government will guarantee your warranty so buy GM; well at least on the Impala, GM says the old GM warranties will not now be honored. Even Reagan's old saw, trust but verify, would not work with this administration.

John the Econ said...

Nope @Stilton, I'd never sign off on a consumption tax without first repealing the 16th Amendment. Without doing that, what we'd end up with is what they have in Europe; high income AND consumption taxes. (And I'm also against the VAT, which IS NOT transparent as a straight end-user consumption tax would be)

And I don't expect that to happen any time soon. Congresspeople drive most of their power from manipulating the tax code to "reward" and "punish". It's part of the mechanism that makes "Crony Capitalism" possible and for major corporations like GE to pay ZERO income taxes.

@Pete(Detroit), you're correct that a consumption tax inhibits consumption. But it also frees up production and lowers cost. Much, if not all of what we'd be paying in final cost would be offset by lower prices. Within a decade, other countries would be outsourcing to America!

Yes, "rich" people can always go off-shore to avoid the tax. But guess what? They already do that anyway. (No tax schema will catch anywhere near 100% of the potential revenue; I'd expect "excise" taxes to be applied to expensive goods that are purchased abroad to recapture revenue from people who try to do that)

But the best part of a consumption tax is this: Everyone pays. The biggest problem we face today is that less than half of America pays income taxes. That's why the Democrats can come up with "surveys" that show that "44% of Americans want higher income taxes! It's because most of those people surveyed aren't paying any! So they couldn't care less about out-of-control entitlements and deficits, because they don't think they're paying anyway. (And thanks to "refundable tax credits" like the misnamed "Earned Income Tax Credit", many of them actually get more back than they paid)

With a consumption tax, all of a sudden, all of these freeloaders will think twice next time their congressperson, interest group or think tank suggests that taxes need to be raised to pay for another boondoggle. It will be because they will actually SEE their taxes increase, probably for the first time in their lives.

Stilton Jarlsberg said...

@Anonymous (two above)- Sorry to hear about your financial loss. "Secured" isn't as "secure" as it used to be, and Warren Buffet didn't get where he is by being an advocate of "the little guy." And I don't have an exact dollar figure of how much I've put into Social Security that I'll never see again, but I feel (and share) your pain.

And yes, isn't it interesting that Obama's promise that GM would honor all warranties turns out to be a baldfaced lie? I am shocked. Shocked! But at least if we like our current healthcare plans, we can keep them. Period. Case closed.

@John the Econ- You're right that Washington is (currently, at least) uninterested in establishing any tax system that is actually fair. I have to laugh (and it's that creepy, scary laugh) whenever I hear the politicians railing against "loopholes," as if they just appear spontaneously like malignant tumors. Nope, they were all created by politicians to reward cronies or, in more benign circumstances, encourage economic choices which are deemed good for the economy.

I'm all for a consumption tax where everyone pays. Everyone. No survey should ask whether people are just "in favor of higher taxes." Rather, the only meaningful question should be "are you in favor of having your taxes raised?"

Andrew said...

Re: consumption tax(es) where EVERYBODY pays: we already have a plague of consumption taxes that 'everybody' pays, such as the state (and county, and sometimes city) sales taxes...which even the poorest pay. Other consumption taxes are stealthily embedded in retail prices (Federal, state and county gasoline taxes, which in 'good' times can be half the price of every gallon you pump, whether it's into a new Rolls or a rusting clunker). Federal and state and local taxes embedded in everything from building supplies to a restaurant meal to every minute of cell phone or landline usage, your cable and wifi bills, electricity, water, you name it.
Governments have an obvious vested interest in keeping these consumption taxes hidden. Hard to object to a tax you're not aware of.
Instead, we need to move on from and away from the notion of government as being able to fund itself only by being a parasite. It's time to expect governments to actually be productive and self-supporting...not by taxation but by intelligently managing the mind-boggling assets (real estate, natural resources, intellectual property, public utilities from the airwaves to the Internet) we the people have allowed Government to monopolize. It's insane that Amtrak and the Post Office are so mismanaged they can't turn a profit (and pay a regular dividend).

TheOldMan said...

If we cannot eliminate income taxes, then eliminate tax withholding. You can be sure that when people have to write a check and mail it to the feds, state, local, there will soon be a revolution. Too many taxpayers think that the bottom line number on the 1040 is what they owe, ignoring all they paid during the year.

Colby said...

My Congresswoman, Virginia Foxx has been lobbying to do exactly as you say with the witholding, and she is being lambasted like you wouldn't believe. This libs say we are not smart enough or disciplined enough to save money all year to pay our taxes. What they are really afraid of, is people will simply STOP paying taxes. What would the IRS do if about 20 million of us just told them to stick it in their ear come April, arrest 20 million people?

JustaJeepGuy said...

I know, and I'm sure you do too, plenty of people who definitely don't have the self-discipline to save money for their income tax through the year. They actually LIKE having their money withheld, and they think it's great that they are "forced" to save and get that refund check. You can't get them to realize how they would have more money if they kept that money in a savings account (well, they would have, at one time...) and earned interest on it. No, it's better to have Uncle Sam discipline them rather than do it themselves. Sad, sad.

John the Econ said...

Obama's "Warranty": Of course, this illustrates the #1 problem with Obama's approach to governance that sees itself as not constrained by rule-of-law. He could promise whatever he wants, but he is under no legal obligation what so ever to deliver on it. Sorry suckers!

Now, do you still think he will do better with his promise to take care of you under Obamacare?

Reaganite Republican said...

Good schtuff Stilton... linked @ my rag:

Reaganite's Sunday Funnies

Enjoy your weekend, all

Stilton Jarlsberg said...

@Reaganite Republican- As always, thanks for adding the links to your Sunday Funnies. I always enjoy seeing your choices!