[Vision2020] WARREN E. BUFFETT: A Minimum Tax for the Wealthy

Mon Nov 26 13:18:18 PST 2012

It seems that a tax such as this would be hard on seniors. Folks who
responsibly take a portion of their income which has already been taxed and
invest it for their retirement are going to be hit rather hard by what
amounts to a 25% sales tax on their every purchase.

A flat tax strikes me as a better way to go.

g

On Mon, Nov 26, 2012 at 12:52 PM, Paul Rumelhart <godshatter at yahoo.com>wrote:

> This is a tax on the individual, not their businesses.  The only way this
> will affect their companies' bottom line is if they vote themselves a raise
> in order to offset the new taxes.  So, in theory, it shouldn't affect
> prices.
>
> I'm all for a low corporate rate in order to keep prices low, but I see no
> reason why the ultra rich should get any breaks for individual taxes.  If
> anything, they should be raised because they can afford it.
>
> I'm curious, has anyone looked into the "FairTax" proposal?  I'm just
> curious about it because Gary Johnson supports it.  I don't know enough
> about taxation to know if it would work.  Here is a description from
> Wikipedia:
>
> "The FairTax is a tax reform proposal for the federal government of the
> United States that would replace all federal income taxes (including the
> alternative minimum tax, corporate income taxes, and capital gains taxes),
> payroll taxes (including Social Security and Medicare taxes), gift taxes,
> and estate taxes with a single broad national consumption tax on retail
> sales. The Fair Tax Act (H.R. 25/S. 13) would apply a tax, once, at the
> point of purchase on all new goods and services for personal consumption.
> The proposal also calls for a monthly payment to all family households of
> lawful U.S. residents as an advance rebate, or "prebate", of tax on
> purchases up to the poverty level."
>
> Because it is replacing the other taxes, the consumption tax would be
> pretty high, probably between 20% and 25%.  The nice thing is that it is
> taken once, only at the time of a new purchase.  Any thoughts?
>
> Paul
>
>
>   ------------------------------
> *From:* Donovan Arnold <donovanjarnold2005 at yahoo.com>
> *To:* Scott Dredge <scooterd408 at hotmail.com>; "art.deco.studios at gmail.com"
> <art.deco.studios at gmail.com>; viz <vision2020 at moscow.com>
> *Sent:* Monday, November 26, 2012 11:37 AM
> *Subject:* Re: [Vision2020] WARREN E. BUFFETT: A Minimum Tax for the
> Wealthy
>
> I don't get it! How can you tax the people that control the prices of
> everything and not expect prices to rise? If you tax business owners and
> stock holders, they will simply make up for their loss in revenue by
> increasing the price of their goods and services. This means the poor and
> middle classes absorb the tax increases by rising costs of their goods and
> services they need and consume.
>
> Further, it doesn't change the quality of life at all for the poor or
> middle classes if you tax rich people out of existence. What matters is
> the cost of living, the price of goods and services that we need or
> consume. The price of food, clothing, shelter, health care and medicine,
> transportation, and education need to be as low as possible.
>
> We should reduce taxes on the wealthy if the price of these needed goods
> and services is less than 60% of family income, and raise their taxes for
> entitlement programs when it goes above 75%  to subsidize the loss in
> quality of life. There would be a strong motive for businesses to keep the
> cost of living affordable while getting rich.
>
> Donovan J. Arnold
>
>
>
>
>
>   *From:* Scott Dredge <scooterd408 at hotmail.com>
> *To:* art.deco.studios at gmail.com; viz <vision2020 at moscow.com>
> *Sent:* Monday, November 26, 2012 11:05 AM
> *Subject:* Re: [Vision2020] WARREN E. BUFFETT: A Minimum Tax for the
> Wealthy
>
>  It should be deemed 'A Minimum Tax for High Income Earners'.  There is
> no tax for simply 'being wealthy' and sitting on a ginormous pile of cash.
> Knock yourself out.
>
>  Date: Mon, 26 Nov 2012 10:58:08 -0500
> From: art.deco.studios at gmail.com
> To: vision2020 at moscow.com
> Subject: [Vision2020] WARREN E. BUFFETT: A Minimum Tax for the Wealthy
>
>  [image: The New York Times] <http://www.nytimes.com/>
>
>  November 25, 2012
> A Minimum Tax for the Wealthy By WARREN E. BUFFETT
> Omaha
> SUPPOSE that an investor you admire and trust comes to you with an
> investment idea. “This is a good one,” he says enthusiastically. “I’m in
> it, and I think you should be, too.”
> Would your reply possibly be this? “Well, it all depends on what my tax
> rate will be on the gain you’re saying we’re going to make. If the taxes
> are too high, I would rather leave the money in my savings account, earning
> a quarter of 1 percent.” Only in Grover Norquist’s imagination does such
> a response exist.
> Between 1951 and 1954, when the capital gains rate was 25 percent and
> marginal rates on dividends reached 91 percent in extreme cases, I sold
> securities and did pretty well. In the years from 1956 to 1969, the top
> marginal rate fell modestly, but was still a lofty 70 percent — and the tax
> rate on capital gains inched up to 27.5 percent. I was managing funds for
> investors then. Never did anyone mention taxes as a reason to forgo an
> investment opportunity that I offered.
> Under those burdensome rates, moreover, both employment and the gross
> domestic product (a measure of the nation’s economic output) increased at a
> rapid clip. The middle class and the rich alike gained ground.
> So let’s forget about the rich and ultrarich going on strike and stuffing
> their ample funds under their mattresses if — gasp — capital gains rates
> and ordinary income rates are increased. The ultrarich, including me,
> will forever pursue investment opportunities.
> And, wow, do we have plenty to invest. The Forbes 400<http://www.forbes.com/sites/luisakroll/2012/09/19/the-forbes-400-the-richest-people-in-america/>,
> the wealthiest individuals in America, hit a new group record for wealth
> this year: $1.7 trillion. That’s more than five times the $300 billion
> total in 1992. In recent years, my gang has been leaving the middle class
> in the dust.
> A huge tail wind from tax cuts has pushed us along. In 1992, the tax paid
> by the 400 highest incomes in the United States (a different universe from
> the Forbes list) averaged 26.4 percent of adjusted gross income. In 2009,
> the most recent year reported, the rate was 19.9 percent. It’s nice to have
> friends in high places.
> The group’s average income in 2009 was $202 million — which works out to a
> “wage” of $97,000 per hour, based on a 40-hour workweek. (I’m assuming
> they’re paid during lunch hours.) Yet more than a quarter of these
> ultrawealthy paid less than 15 percent of their take in combined federal
> income and payroll taxes. Half of this crew paid less than 20 percent. And
> — brace yourself — a few actually paid nothing.
> This outrage points to the necessity for more than a simple revision in
> upper-end tax rates, though that’s the place to start. I support President
> Obama’s proposal to eliminate the Bush tax cuts for high-income taxpayers.
> However, I prefer a cutoff point somewhat above $250,000 — maybe $500,000
> or so.
> Additionally, we need Congress, right now, to enact a minimum tax on high
> incomes. I would suggest 30 percent of taxable income between $1 million
> and $10 million, and 35 percent on amounts above that. A plain and simple
> rule like that will block the efforts of lobbyists, lawyers and
> contribution-hungry legislators to keep the ultrarich paying rates well
> below those incurred by people with income just a tiny fraction of ours.
> Only a minimum tax on very high incomes will prevent the stated tax rate
> from being eviscerated by these warriors for the wealthy.
> Above all, we should not postpone these changes in the name of “reforming”
> the tax code. True, changes are badly needed. We need to get rid of
> arrangements like “carried interest” that enable income from labor to be
> magically converted into capital gains. And it’s sickening that a Cayman
> Islands mail drop can be central to tax maneuvering by wealthy individuals
> and corporations.
> But the reform of such complexities should not promote delay in our
> correcting simple and expensive inequities. We can’t let those who want to
> protect the privileged get away with insisting that we do nothing until we
> can do everything.
> Our government’s goal should be to bring in revenues of 18.5 percent of
> G.D.P. and spend about 21 percent of G.D.P. — levels that have been
> attained over extended periods in the past and can clearly be reached
> again. As the math makes clear, this won’t stem our budget deficits; in
> fact, it will continue them. But assuming even conservative projections
> about inflation and economic growth, this ratio of revenue to spending will
> keep America’s debt stable in relation to the country’s economic output.
> In the last fiscal year, we were far away from this fiscal balance —
> bringing in 15.5 percent of G.D.P. in revenue and spending 22.4 percent.
> Correcting our course will require major concessions by both Republicans
> and Democrats.
> All of America is waiting for Congress to offer a realistic and concrete
> plan for getting back to this fiscally sound path. Nothing less is
> acceptable.
> In the meantime, maybe you’ll run into someone with a terrific investment
> idea, who won’t go forward with it because of the tax he would owe when it
> succeeds. Send him my way. Let me unburden him.
> Warren E. Buffett is the chairman and chief executive of Berkshire
> Hathaway.
>
>
> --
> Art Deco (Wayne A. Fox)
> art.deco.studios at gmail.com
>
>
>
>
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