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Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

No real argument to that revision other than that I'd submit that very many of the millionaires (cynically) consider themselves to be and work hard at havng themselves percieved as middle class.  Millionaire.....billionaire, it really all about how crony capitalism more than anything else has shrunk the middle class and widened the gaps.

 

Those credit policies and decisions on the part of the IRS and those agencies were but a harbinger of what was to come as the institutional redistributionism that came with the 1980 election was quietly implemented. 

 

 

 

 

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Veteran Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

Warren Buffett is an anomoly, his company produces no product, and his specialty is buying parcels of other, profitable companies, mingling them into a giant mutal fund, that he controls, and sets up to pay the least taxes possible.

 

Commentary following an interview with Buffet where he again commented about not being taxed enough 'personally' and the note on how he sidesteps paying income taxes on the dividends from those companies.  The dividends go straight to Berkshire Hathaway, who re-invests them, and PAYS NO DIVIDENDS to the shareholders.  Thus, no taxes, until stock is cashed in, then paying the 15% capital gains tax rate.  The only way to make him pay more taxes, unless he volunteers the money, is to raise the capital gains tax, or tax unrealized gains.  Which do you think is the proper answer?  Unless you get some sort of unrealized gain, or net worth tax paid, Warren is going to be among the lowest tax payer around, regardless of what you set the income tax level to.  The tax bracket could be 100% after 200k income, and he likely wouldn't pay any more.

Also, the 7 million is NOT his personal income tax, it is all the taxes he pays, including payroll tax paid by his company.  His personal bill comes out to something like the average tax payer who makes a little over 100K.

Anyway, to the commentary:

 

Snip-

 

Buffett fails to mention that the corporations who issued the stock he's talking about face an income tax of their own. Most public companies, if they're making more than $18.3 million per year, pay 35%. This is also the rate for the top individual tax bracket.

So think about a dividend. The income that a corporation makes is first taxed at 35%. Then, a dividend is paid out -- after taxes. If you obtain that dividend, should it be taxed? Well, it already was -- at 35%. For this reason, it makes sense to tax it at 0%. If you tax it more, then you are taxing the income it produced twice.

 

snip 2 ;

 

Still Mr. Buffet is not sharing the real reason that he doesn't pay much in the way of income tax relative to his great fortune.  The secret is hidden in plain sight.  Mr. Worstall alludes to it when he mentions that Berkshire Hathaway does not in fact pay dividends.  Mr. Buffet's secret which you can find blasted all over the Internet is one of his famous quotations:

Our favorite holding period is forever

You only pay income taxes at any rate on realized appreciation.  An investment with a holding period of forever incurs a capital gains tax of 0%, while all along the holder can be getting wealthy from appreciation.  That's the real reason Mr. Buffet does not pay a lot of income taxes.

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Senior Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

Wealth was not redistributed during the 80s, it was created.

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Veteran Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

Hooray for "trickledown"!

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Veteran Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

I didn't complain about private parties doing anything.  You said we should stop foreign aid and mentioned Haiti and then posted an article that said the US govt didn't much at all compared to private parties.

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Veteran Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

How many companies and/or individuals pay that 35% in taxes?

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Veteran Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

Not nearly enough. 
I guess the point I am trying to make is not so much that the tax RATE is too low, it is that too many special-interests get big tax cuts, often just for being properly connected (see GE) or having the right lawyers who know how to exploit loopholes (such as Buffett & others).

Instead of 16,000 pages of laws regulating our tax code, often with one line contradicting another somewhere else, why not clean it up, so that the guys making 200k don't get all these loopholes, and wind up in the bottom tax bracket, with the poor guy just starting out, with kids to feed.

 

Once we get everybody paying what they should, instead of finding ways to weasel out of paying what they ought to, and stop spending on needless things, we can see where we are, and what to do from there.

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Senior Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

Cut the 35% rate to 15% and it will be cheaper to pay the tax than to pay the lawyers. Companies will keep their money in the US instead of foreign banks.

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Veteran Advisor

Re: Darn, thought our socialist president and his minions could pay off the debt

 

 

According to this chart, Health care & Pensions are the fastest growing expenditures.  Welfare took quite a spike with the recession, as well.  Just remember that every number past 2010 is a 'projection'.

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Veteran Advisor

the 1980's created Opportunity

I think the opportunity to make money is what drives a lot of liberal types up the wall. They choose to live in a world where everyone stays at the level they are born at, and the pie, in their world, should be divided up so that the ones on the bottom get a little slice of what the top get and they get a warm fuzzy feeling by thinking this makes a great world.

 

Rarely do you ever hear liberal types talking about making more pies, or bigger pies. It all comes back to sharing the wealth, like Zero says, rather than making more wealth.

 

Nothing is more racist than perpetual affirmative action programs. And rarely has more harm been done by do-gooders than what has transpired over the decades of my lifetime.

 

The problem with the 80's is they never were able to clamp down on SPENDING. That is the failed legacy of Reagan, he failed to inspire the citizens to want to reign in government where it affected their own gravy.

 

Reagan did promote good tax policy, and did get America believing in itself again. Two out of three was good, but not good enough.