Holy Smoke: AP calls Obama/Buffett on their nonsense!

[JohnStOnge]

http://www.google.com/hostednews/ap/art ... 4a7f0ddc1b" onclick="window.open(this.href);return false;

[native]

http://www.google.com/hostednews/ap/art ... 4a7f0ddc1b

"...The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office. ..."

...But that's not enough for Obama or TTBF.

[AZGrizFan]

So Obama uses incidental evidence (Buffett) to push through tax increases on people already carrying the lions share of the tax load in this country.

[JohnStOnge]

So Obama uses incidental evidence (Buffett) to push through tax increases on people already carrying the lions share of the tax load in this country.

The new twist Buffett added is the idea that the "rich" generally pay at a lower effective rate. That is total nonsense as can be seen at the CBO breakdown I've referenced previously:

http://www.cbo.gov/ftpdocs/98xx/doc9884 ... Letter.pdf" onclick="window.open(this.href);return false;

Again, the latest year is 2005 but I think we can all agree that things have not changed substantially since then in terms of how the load is shared. In 2005, the top 0.01 of 1% of the population overall paid at an effective rate of 31.5% (all federal taxes, see Table 1). The bottom 20% paid at a rate of 4.3%, the next 20% paid at 9.9%, the next 20% paid at 14.2%, the next 20% paid at 17.4%. So on and so forth.

The idea that the very rich generally pay at a lower effective tax rate is utter nonsense. This thing that's been going on is total demagoguery and very misleading.

[JohnStOnge]

BTW, I really, really doubt that Buffett really pays at a lower effective rate than the secretary he's talking about. I think somebody ought to call him on it and tell him to give us the information from the secretary's tax return without naming her (or him I guess). I'd bet she (or he) paid at an effective rate of less than 15% when all things are considered. I'd also bet that Buffett paid at a higher rate than 15% when all Federal taxes are considered.

[Ivytalk]

BTW, I really, really doubt that Buffett really pays at a lower effective rate than the secretary he's talking about. I think somebody ought to call him on it and tell him to give us the information from the secretary's tax return without naming her (or him I guess). I'd bet she (or he) paid at an effective rate of less than 15% when all things are considered. I'd also bet that Buffett paid at a higher rate than 15% when all Federal taxes are considered.

The only way Buffett gets there is to put most of his income in capital gains. Berkshire Hathaway creates no value for the economy: it just buys and sells other companies. Screw Buffett. Let him pay all the taxes he wants.

[travelinman67]

I noticed a few other traditionally Lib/Dogma media outlets going neutral-right on this. Didn't really surprise me as the MSM represents the classic "limousine liberal" viewpoint...

...support socialism so long as it doesn't reach into their own wallet.

No, I don't support any plank of his proposal...

...a true believer that increasing ANY tax NEVER facilitates (aids) in economic recovery, much less growth.

[danefan]

BTW, I really, really doubt that Buffett really pays at a lower effective rate than the secretary he's talking about. I think somebody ought to call him on it and tell him to give us the information from the secretary's tax return without naming her (or him I guess). I'd bet she (or he) paid at an effective rate of less than 15% when all things are considered. I'd also bet that Buffett paid at a higher rate than 15% when all Federal taxes are considered.

If she makes $125k a year in salary and bonus and he makes $100 million a year in qualified dividend income, her effective rate would likely be lower than his wouldn't it?

[native]

BTW, I really, really doubt that Buffett really pays at a lower effective rate than the secretary he's talking about. I think somebody ought to call him on it and tell him to give us the information from the secretary's tax return without naming her (or him I guess). I'd bet she (or he) paid at an effective rate of less than 15% when all things are considered. I'd also bet that Buffett paid at a higher rate than 15% when all Federal taxes are considered.

The only way Buffett gets there is to put most of his income in capital gains. Berkshire Hathaway creates no value for the economy: it just buys and sells other companies. Screw Buffett. Let him pay all the taxes he wants.

This was the point made on a business talk show this weekend. Buffet gets a lower rate because of the structure of his business but demand that the people creating jobs - who are already paying a rate much higher than Buffet's rate - pay an even higher rate!

[danefan]

The only way Buffett gets there is to put most of his income in capital gains. Berkshire Hathaway creates no value for the economy: it just buys and sells other companies. Screw Buffett. Let him pay all the taxes he wants.

This was the point made on a business talk show this weekend. Buffet gets a lower rate because of the structure of his business but demand that the people creating jobs - who are already paying a rate much higher than Buffet's rate - pay an even higher rate!

The CEOs of most corporations are compensated in large part (sometimes the vast majority) in stock. That results in the majority of their income in most years being derived from cap gains and dividends resulting from that stock. Those people should have lower effective tax rates (the reduced cap gain and qualified dividend rate will draw their ETR down towards 15%) than most of their secretaries who probably make close to 6 figures in salary and fall in the 25-28% bracket.

[AZGrizFan]

This was the point made on a business talk show this weekend. Buffet gets a lower rate because of the structure of his business but demand that the people creating jobs - who are already paying a rate much higher than Buffet's rate - pay an even higher rate!

The CEOs of most corporations are compensated in large part (sometimes the vast majority) in stock. That results in the majority of their income in most years being derived from cap gains and dividends resulting from that stock. Those people should have lower effective tax rates (the reduced cap gain and qualified dividend rate will draw their ETR down towards 15%) than most of their secretaries who probably make close to 6 figures in salary and fall in the 25-28% bracket.

Your facts might be true if even HALF of the corporations in the US actually had "stock". Most "corporations" are either sole proprietor or family businesses that don't/can't pay out compensation in the form of "stock", since the income flows through their personal tax returns. Sure, maybe most publicly held companies pay out compensation in the form of stock, but I highly doubt that qualifies as "most corporations".

Oh, and I know of no secretary, anywhere, that makes even close to six figures. ESPECIALLY once you get down to line 39 (or whatever line that is) on the tax return.

[danefan]

The CEOs of most corporations are compensated in large part (sometimes the vast majority) in stock. That results in the majority of their income in most years being derived from cap gains and dividends resulting from that stock. Those people should have lower effective tax rates (the reduced cap gain and qualified dividend rate will draw their ETR down towards 15%) than most of their secretaries who probably make close to 6 figures in salary and fall in the 25-28% bracket.

Your facts might be true if even HALF of the corporations in the US actually had "stock". Most "corporations" are either sole proprietor or family businesses that don't/can't pay out compensation in the form of "stock", since the income flows through their personal tax returns. Sure, maybe most publicly held companies pay out compensation in the form of stock, but I highly doubt that qualifies as "most corporations".

Oh, and I know of no secretary, anywhere, that makes even close to six figures. ESPECIALLY once you get down to line 39 (or whatever line that is) on the tax return.

I'll clarify because I am really just talking about the super rich (which is who Buffett is talking about as well). Most of the super-rich CEOs are the CEOs of publicly traded C corps. We can talk about the super-rich Hedge Fund guys too if you want, but they have the defenseless carried interest exemption which is why their ETRs are lower than the average salaried employee.

AZ - I've had two assistants in my work life (my former and current) that make over 6 figures with salary and cash bonus.

But I do agree that its impossible to tell what the Taxable Income of anyone is if you don't know their circumstances. All I'm saying is that it is not out of the realm of possibility that Buffett's secretary has a lower effective rate than he does.

[AZGrizFan]

Your facts might be true if even HALF of the corporations in the US actually had "stock". Most "corporations" are either sole proprietor or family businesses that don't/can't pay out compensation in the form of "stock", since the income flows through their personal tax returns. Sure, maybe most publicly held companies pay out compensation in the form of stock, but I highly doubt that qualifies as "most corporations".

Oh, and I know of no secretary, anywhere, that makes even close to six figures. ESPECIALLY once you get down to line 39 (or whatever line that is) on the tax return.

I'll clarify because I am really just talking about the super rich (which is who Buffett is talking about as well). Most of the super-rich CEOs are the CEOs of publicly traded C corps. We can talk about the super-rich Hedge Fund guys too if you want, but they have the defenseless carried interest exemption which is why their ETRs are lower than the average salaried employee.

AZ - I've had two assistants in my work life (my former and current) that make over 6 figures. But I do agree that its impossible to tell what the Taxable Income of anyone is if you don't know their circumstances. All I'm saying is that it is not out of the realm of possibility that Buffett's secretary has a lower effective rate than he does.

That may very well be true, but it's still anectodal evidence, and it (anecdotal evidence) is certainly no way for the President to develop domestic tax policy. ALL the actual FACTS point to Buffett's secretary being the rare exception rather than the rule, but Obama has twisted and distorted that to fit his political agenda of wealth redistribution.

Pure, unadulterated bullshit.

[danefan]

I'll clarify because I am really just talking about the super rich (which is who Buffett is talking about as well). Most of the super-rich CEOs are the CEOs of publicly traded C corps. We can talk about the super-rich Hedge Fund guys too if you want, but they have the defenseless carried interest exemption which is why their ETRs are lower than the average salaried employee.

AZ - I've had two assistants in my work life (my former and current) that make over 6 figures. But I do agree that its impossible to tell what the Taxable Income of anyone is if you don't know their circumstances. All I'm saying is that it is not out of the realm of possibility that Buffett's secretary has a lower effective rate than he does.

That may very well be true, but it's still anectodal evidence, and it (anecdotal evidence) is certainly no way for the President to develop domestic tax policy. ALL the actual FACTS point to Buffett's secretary being the rare exception rather than the rule, but Obama has twisted and distorted that to fit his political agenda of wealth redistribution.

Pure, unadulterated bullshit.

I get your point. I might not agree, but I get it.

All I'm saying in response to JSO is that it is more than theoretically possible to get to Buffett having a lower ETR than his secretary and the only reason that could be is because his income benefits from lower rates of tax on dividend and cap gain income. That is a policy point that is worthy of debate, IMO. Just as the carried interest exemption is.

[danefan]

Buffet's 2010 Results:

Adjusted Gross Income - $62,855,038
Taxable Income - $39,814,784
Federal Income Tax Paid - $6,923,494

ETR: 17.4%

http://money.cnn.com/2011/10/12/news/ec ... m?iid=Lead" onclick="window.open(this.href);return false;

My ETR usually floats in the low 20-22% range. I'm not sure it makes a whole lot of sense for me to pay more in taxes as a percentage then Buffett or for him to pay less in taxes on a percentage basis then anyone else.

[AZGrizFan]

Buffet's 2010 Results:

Adjusted Gross Income - $62,855,038
Taxable Income - $39,814,784
Federal Income Tax Paid - $6,923,494

ETR: 17.4%

http://money.cnn.com/2011/10/12/news/ec ... m?iid=Lead" onclick="window.open(this.href);return false;

My ETR usually floats in the low 20-22% range. I'm not sure it makes a whole lot of sense for me to pay more in taxes as a percentage then Buffett or for him to pay less in taxes on a percentage basis then anyone else.

Why?

Isn't the whole theory that people will invest in companies (at great risk to their investment and with no guarantee of return of pricinpal) to allow companies to grow, prosper and hire new workers? How many years did it take for those investments by Buffett take to actually pay off?

If I'm an investor and I get taxed the EXACT same whether I'm in a guaranteed investment or a company stock with no guarantee, I'm not investing in a company and taking that risk without the potential reward at the end.

No investment = no new capital = no growth = no jobs.

[death dealer]

I realize that my little piddly salary wouldn't pay the taxes on one month of Buffet's income, but just for shakes and giggles, let's say a guy like me working two business's grosses in the low seven's annually. Almost every penny of his income comes from the labor of his own hands, or at least his mind (some of what I do can't really be called "labor"). So I am paying regular income taxes on almost all of my income through an S corp. I got a feeling that I am paying a higher rate than my secretary who makes $65 grand and some change. There are lots of small business men like myself that make their money the old fashioned way of working everyday for themselves at a job that just happens to pay well. In my particular case I have two such jobs. So, I'm not paying my fair share when between federal, state, and local taxes almost half of what I make goes to run the govt.?

[danefan]

Buffet's 2010 Results:

Adjusted Gross Income - $62,855,038
Taxable Income - $39,814,784
Federal Income Tax Paid - $6,923,494

ETR: 17.4%

http://money.cnn.com/2011/10/12/news/ec ... m?iid=Lead" onclick="window.open(this.href);return false;

My ETR usually floats in the low 20-22% range. I'm not sure it makes a whole lot of sense for me to pay more in taxes as a percentage then Buffett or for him to pay less in taxes on a percentage basis then anyone else.

Why?

Isn't the whole theory that people will invest in companies (at great risk to their investment and with no guarantee of return of pricinpal) to allow companies to grow, prosper and hire new workers? How many years did it take for those investments by Buffett take to actually pay off?

If I'm an investor and I get taxed the EXACT same whether I'm in a guaranteed investment or a company stock with no guarantee, I'm not investing in a company and taking that risk without the potential reward at the end.

No investment = no new capital = no growth = no jobs.

Why = because the majority of Buffett's income is based on dividends and long term capital gains which benefit from a reduced tax rate.

Whether that makes sense economically is really what the debate is right?

[andy7171]

god damned tax lawyer speak mumbo jumbo is giving me a head ache!

[blueballs]

http://www.fairtax.org fixes all of it...

[UNHWildCats]

http://www.google.com/hostednews/ap/art ... 4a7f0ddc1b

"...The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office. ..."

...But that's not enough for Obama or TTBF.

That same 10% control 93% of America's money/

[Ivytalk]

"...The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office. ..."

...But that's not enough for Obama or TTBF.

That same 10% control 93% of America's money/

No, it's 6.93%!

[YoUDeeMan]

"...The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office. ..."

...But that's not enough for Obama or TTBF.

That same 10% control 93% of America's money/

What have you done to earn any of that money?

Note: banging asian boys doesn't count as work.

[AZGrizFan]

Why?

Isn't the whole theory that people will invest in companies (at great risk to their investment and with no guarantee of return of pricinpal) to allow companies to grow, prosper and hire new workers? How many years did it take for those investments by Buffett take to actually pay off?

If I'm an investor and I get taxed the EXACT same whether I'm in a guaranteed investment or a company stock with no guarantee, I'm not investing in a company and taking that risk without the potential reward at the end.

No investment = no new capital = no growth = no jobs.

Why = because the majority of Buffett's income is based on dividends and long term capital gains which benefit from a reduced tax rate.

Whether that makes sense economically is really what the debate is right?

No, the debate is whether that makes sense philosophically.