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Warren Buffett: Stop coddling the super rich

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341–350 of 354 posts

Re: Warren Buffett: Stop coddling the super rich

#341

Earlier quoted context omitted.

True, but what solves the forced rider problem and why presume that it is more benign a problem than free riding? One man's public good is another man's public bad.

There's no a priori answer: democracy is how we decide. But one way to check how we're doing is by comparison with other countries: http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... The US's tax burden is already the lowest of the OECD countries bar Chile and Mexico. It's 30% lower than Great Britain, and half that of Denmark. And what that hides is we spend an extraordinarily large portion of that on "…

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Re: Warren Buffett: Stop coddling the super rich

#342

Earlier quoted context omitted.

True, but what solves the forced rider problem and why presume that it is more benign a problem than free riding? One man's public good is another man's public bad.

There's no a priori answer: democracy is how we decide. But one way to check how we're doing is by comparison with other countries: http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... The US's tax burden is already the lowest of the OECD countries bar Chile and Mexico. It's 30% lower than Great Britain, and half that of Denmark. And what that hides is we spend an extraordinarily large portion of that on "…

"There's no a priori answer: democracy is how we decide."

Yes, but simply because the majority votes to take a certain action does not make that action utility-maximizing (the losers might lose more than the gainers gain). Of course, even if it is utility-maximizing (which is probably unmeasurable anyway), many would still object even if they were among the winners because it violates some rule of justice, is unfair, or other similar thing. I'm not so much sticking up for the people getting less utility from "public goods" than they would from a private good that is a close substitute, but for the people that get disutility from "public goods" even if they cost them nothing. I'm sure I'm not the only bleeding-heart civil libertarian that would pay good money in order not to receive such "public goods" as killing foreigners for living in a country whose government we disagree with, locking up peaceful individuals for ingesting illegal substances, or subsidizing behavior we find abhorrent.

"But if that's still too much governmental interference, then tax haters are able to select from a wide variety of third-world countries. I might suggest Somalia, where effective tax burden is zero. There being no effective government at all, of course."

This counter-argument proves too much. Couldn't someone denying your preferred tax policy suggest that you (or Buffet) move to a country with higher tax rates rather than they having to move to a lower tax country? I find the "if you don't like it, then leave" argument less than persuasive.

Re: Warren Buffett: Stop coddling the super rich

#343
post #22

The problem is getting low to middle income people to stop voting against themselves. Good luck with that, they all seem to think they are going to be billionaires someday so better keep those billionaire taxes low. Either that or by bribing the wealthy with low taxes they might only ship out half the jobs overseas instead of all of them. It's just dumbfounding. Election after election, over and over.

I keep trying to formulate my take on this, and failing, but here goes anyway: The democratic party and American leftists no longer understand non-college working people and, for the most part, no longer reach out to them. Working people think that the left today advocates either for weirdos or for the completely screwed up, and wants everybody to pay for its programs to help said weirdos and fuckups. There is some v…

Forgive my reply to myself, but I have been thinking about this all day. Here are some random thoughts, partly for my own edification, but partly because the conversation seems to be lingering:

I actually think the "core" of the democratic part / left is the marginalized on one hand, and those that minister to them on the other. The white working class aren't really marginalized like they were in the depression and earlier, so don't fit in anymore -- but the super poor are marginalized, so they fit. Non-whites are interesting -- 40 years ago, blacks and latinos were marginalized as weirdos, except they were poor too (double whammy -- like being gay AND broke all the time). Now that we are actually becoming a less racist and homophobic society (slowly and imperfectly, but definitely) these folks lose their marginalization and drift away from the core since social conservativism and personal character ideologies become more appropriate, unless they go to college and become social workers and join the ministering class rather than the ministered-to class. The Republicans see this with latinos and keep trying to bring them in; they haven't succeeded yet, but they will, just like they did with Italians and Catholics.

The other, maybe dominant group now, in the democratic party are those folks who would have been "Rockefeller Republicans" back before Reagan and Goldwater redefined the party. My family is in this camp, and so are, I think, all the smart capitalists who run/ own businesses that require lots of infrastructure and educated employees -- the Hewletts and the Packards, Bill Gates, Hollywood, Google, the rest of the educated "blue" USA. These guys rightly understand that simplistic market bullshit and simplistic christian bullshit are not appropriate to a complex industrial economy. Remember, Carnegie ordered the slaughter of unionizing steelworkers, but he also understood his world was completely fucked without universities and libraries to make his engineers and managers. He could have been a Clinton democrat today.

A couple of replies to people:

Yeah, Eric Hoffer is great -- I only read the true believer, but it made a huge impression on me; I am sure I repeat him without knowing it.

To the guy who asks why the Joe Sixpack world doesn't evolve its own leaders (forgive me if I paraphrase too brutally): because they lack the training or they wouldn't be joe sixpacks in the first place... It is mostly the managerial class (myself) or the owning class (my friends at prep-school) who have the know-how to organize people into social systems like political parties, churches, businesses, and the like. The working class have great hand-eye coordination, but pretty crappy social and language skills (sorry for the gross generalization, but I think you understand what I am trying to say); those that do have these skills tend to drift upward into the managerial class. When there is no room for these smart organizers to promote, they get involved in union politics or communist cells (or avoid the question altogether by getting involved in the arts/ drugs/ weird religious things / whatever.)

So here is my parting thought: There is a vacuum organizing the working class today, and if someone put their finger on the cultural stuff like the Republicans do, but also fought for working people's actual interests, it could be a WILD ride. Just saying.

Re: Warren Buffett: Stop coddling the super rich

#344
post #307
post #24

Earlier quoted context omitted.

If you just count the top 400 income earners in the US that he mentions in the article, and they restore the the 1992 rate of 29.2% (as opposed to the 21.5% of 2008), then we're talking about 7 billion dollars

So here's a question- if you follow Buffett's logic, then a guy who builds a company for 40 years, most likely goes with barely any income in some years, and sells it for $10M when he retires, that guy gets slapped with a 100% tax increase. Buffett doesn't differentiate the Walton kids who inherited billions and assuredly live off capital gains their entire lives from the entrepreneur who makes $10M that ONE year of…

Really?

First, we're talking about the difference between ~20% and ~30%, so for your case, the business owner will only walk away with 7 million dollars to retire on. Is this entrepreneur undergoing undue hardship?

What's barely any income for someone who builds a $10M company? 60k? 50k? It's certainly not $10,890 (the federal poverty level). Even if we're talking about a business owner who takes no income, it's because they're living off of the money they've already earned, not because they're taking welfare checks while running their business.

I would alo like to remind you that your typical employee, who's paying the higher tax rate, will be laid off in years of recession, may have to take a lower salary because of outsourcing, etc. I'm not going to classify one hardship versus the other, but I do want to point out that the business owner usually has a higher mean salary, even if the variance is larger.

You ask what the entrepreneur's incentive is if his gains are taxed like ordinary income? That's simple: money, and lots of it. Business ownership is a risk, and it comes with a reward.

Do you really think that a higher tax rate will stop an entrepreneur from creating a company? I dare you to head down to Startup Camp, and ask anyone there if they are planning to start a company because they expect to receive a lower tax rate. I can save you some time: they won't. There's a passion and a drive that accompanies entrepreneurs, and they will start companies because that's what they want to do, what they need to do.

If entrepreneurs choose to take a higher salary during the course of the business, that's fine, it's just tax planning. Anyone with sizable income does it.

You say there is a reason why society created a lower tax rate for capital gains, and that's true, but the economic situations of those times were different than now. I would suggest to you there was also a reason why there were bloody revolutions against the aristocratic class.

The rules of our society must continually adapt to the situation at hand. We are currently in the middle of the two extremes mentioned above, I just hope we realize it and don't get too far to one side or the other.

Re: Warren Buffett: Stop coddling the super rich

#345
post #321

Earlier quoted context omitted.

The road to hell is paved with good intentions. > The problem with the libertarian perspective is that it irrationally assumes the best of people when there is no incentive for them to do so. I assume no such thing about people regardless of whether they are rich or poor. I think crux of our disagreement is about the involvement of government in peoples lives. I heard a quote recently, "The more the government tries…

> I think crux of our disagreement is about the involvement of government in peoples lives. The involvement of government in particular does not concern me. My concern is the involvement of any powerful group. If all you seek is a reduction of the state, you leave a void waiting to be filled by corporatocracy. The argument of left vs. right, authoritarian vs. libertarianism is a red herring, what really matters is th…

We are probably in agreement with regards to your last statement.

I think one of the major themes of politics to come will be the separation of business and state (much like how America pioneered the separation of church and state).

This will require a shift in society though, most voters see it as the governments job to manage the economy and help it grow. But corporate welfare is as damaging to business as social welfare is to individuals.

This is unfortunately a very gray area, at what point do tax breaks stop "encouraging" business versus at what point do businesses become dependent on them?. The inequality is what bothers me most, small businesses paying a higher percentage of tax than big businesses, the percentage should be the same.

I don't believe we can get there by regulation alone, citizens have to care as well, although I do concede that regulation may be necessary to a certain extent.

Re: Warren Buffett: Stop coddling the super rich

#346
post #325

Earlier quoted context omitted.

Do you realize that the "same percentage tax as middle-income earners" would be LOWER than what they currently pay? http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...

Only if you take into account the marginal rates and ignore the many, many breaks and loopholes.

OK, what about the many "breaks and loopholes." for the other tax brackets? I'm in the 25% bracket (Married filing jointly, $68,001 - $137,300) and I paid under 6% effective rate for each of the last few years.

Re: Warren Buffett: Stop coddling the super rich

#347
post #266

Earlier quoted context omitted.

Of course it's relevant. At his level, he can pay however much tax he wants, anywhere in the world, and this will always be the case. What he's calling for is other people paying more tax.

You fundamentally miss his point. Even without finding a thousand loopholes to get out of his taxes, he will pay a lower percentage just based on HOW he makes his money. 1) The payroll tax is capped, so a guy making exactly the income it is capped at, and a guy making 100x that, pay exactly the same payroll tax. No accountant required and it is an enormous difference. For Warren, that is millions of dollars right the…

1) Warren only takes a salary of $100k. 2) For investment income you only pay taxes on the gains, not the principal.

Re: Warren Buffett: Stop coddling the super rich

#348
post #247
post #238

Earlier quoted context omitted.

Does Mr Buffett employ an accountant to do his taxes? Does said accountant employ any tax avoidance strategies?

Buffet famously said that his receptionists paid a higher tax rate than he did. http://www.timesonline.co.uk/tol/money/tax/article1996735.ec...

Buffet's receptionists should get a good tax guy. With the availability of tax breaks for even middle class income ranges there is no reason his receptionists should be paying more.

Re: Warren Buffett: Stop coddling the super rich

#349

Once I realized that you could take all the money from the rich, stop all defense spending, and still have a massive budget problem? These sorts of things stopped being an issue for me. Seriously folks, it's a red herring, an issue created to make sure that one party has something to fight the other party over. If you want to sack the rich, have at it. Just don't pretend that by taking that position you are doing any…

Ah, the poor little rich minorities. We've simply got to protect them from everything. They "create jobs" or something, after all. Though, that's actually wrong, too. 98% of small business tax filers earn less than US$250,000 a year, yet account for 64% of the job creation (or "net new jobs") in the last 15 years and employ over half of the working US population [1]. I'm sorry, but the rich are not bothering with a T…

By 2000 SS and Medicare trust funds were already held in IOU's (i.e. US treasuries).

Re: Warren Buffett: Stop coddling the super rich

#350
post #138

Earlier quoted context omitted.

living standards have improved despite the rich getting richer. Citation needed. Please explain how the living standard in the US can have improved if real wages have fallen. Oh wait, the answer is an incredible increase in consumer debt. That seems to be working out. Keep calm and carry on.

"Please explain how the living standard in the US can have improved if real wages have fallen." I cannot believe the ignorance of Ycombinator at times. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&#... Keep calm. Carry on.

i don't think you can really make an argument that the GDP graph given in the google link is applicable to what i said. but if you can, i'd be interested to hear it.
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