Author Topic: Rich Not Paying Fair Share No Matter How You Split It  (Read 3561 times)

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Brassmask

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Rich Not Paying Fair Share No Matter How You Split It
« on: November 27, 2006, 05:22:30 PM »
 If this has already been posted, my apologies.

Ben Stein and Warren Buffett agree that the rich are not paying the same percentage as me.
 


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November 26, 2006
Everybody's Business
In Class Warfare, Guess Which Class Is Winning
By BEN STEIN
NOT long ago, I had the pleasure of a lengthy meeting with one of the smartest men on the planet, Warren E. Buffett, the chief executive of Berkshire Hathaway, in his unpretentious offices in Omaha. We talked of many things that, I hope, will inspire me for years to come. But one of the main subjects was taxes. Mr. Buffett, who probably does not feel sick when he sees his MasterCard bill in his mailbox the way I do, is at least as exercised about the tax system as I am.

Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.

Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

This conversation keeps coming back to mind because, in the last couple of weeks, I have been on one television panel after another, talking about how questionable it is that the country is enjoying what economists call full employment while we are still running a federal budget deficit of roughly $434 billion for fiscal 2006 (not counting off-budget items like Social Security) and economists forecast that it will grow to $567 billion in fiscal 2010.

When I mentioned on these panels that we should consider all options for closing this gap — including raising taxes, particularly for the wealthiest people — I was met with several arguments by people who call themselves conservatives and free marketers.

One argument was that the mere suggestion constituted class warfare. I think Mr. Buffett answered that one.

Another argument was that raising taxes actually lowers total revenue, and that only cutting taxes stimulates federal revenue. This is supposedly proved by the history of tax receipts since my friend George W. Bush became president.

In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill Clinton’s merry rule. It fell to a low of $794 billion in 2003 after Mr. Bush’s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again.

By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible.

The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.”

The sad fact is that spending rises every year, no matter what people want or say they want. Every president and every member of Congress promises to cut “needless” spending. But spending has risen every year since 1940 except for a few years after World War II and a brief period after the Korean War.

The imperatives for spending are built into the system, and now, with entitlements expanding rapidly, increased spending is locked in. Medicare, Social Security, interest on the debt — all are growing like mad, and how they will ever be stopped or slowed is beyond imagining. Gross interest on Treasury debt is approaching $350 billion a year. And none of this counts major deferred maintenance for the military.

The fourth argument in response to my suggestion was that “deficits don’t matter.”

There is something to this. One would think that big deficits would be highly inflationary, according to Keynesian economics. But we have modest inflation (except in New York City, where a martini at a good bar is now $22). On the other hand, we have all that interest to pay, soon roughly $7 billion a week, a lot of it to overseas owners of our debt. This, to me, seems to matter.

Besides, if it doesn’t matter, why bother to even discuss balancing the budget? Why have taxes at all? Why not just print money the way Weimar Germany did? Why not abolish taxes and add trillions to the deficit each year? Why don’t we all just drop acid, turn on, tune in and drop out of responsibility in the fiscal area? If deficits don’t matter, why not spend as much as we want, on anything we want?

The final argument is the one I really love. People ask how I can be a conservative and still want higher taxes. It makes my head spin, and I guess it shows how old I am. But I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change?

Oh, now, now, now I recall. It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong?

THIS brings me back to Mr. Buffett. If, in fact, it’s all just a giveaway to the rich masquerading as a new way of stimulating the economy and balancing the budget, please, Mr. Bush, let’s rethink it. I don’t like paying $7 billion a week in interest on the debt. I don’t like the idea that Mr. Buffett pays a lot less in tax as a percentage of his income than my housekeeper does or than I do.

Can we really say that we’re showing fiscal prudence? Are we doing our best? If not, why not? I don’t want class warfare from any direction, through the tax system or any other way.

Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.



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Plane

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #1 on: November 27, 2006, 06:06:26 PM »
"Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all."


This could be reversed by the elimination of the Social Security portion of the taxes.

Do we all hate Social Security now?


How long till we all do?

Brassmask

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #2 on: November 27, 2006, 06:11:59 PM »
Personally, I think that Social Security should be EXPANDED and the retirement age lowered to 60 and if taxes have to be raised to do it, then sign me up.

But don't use the money for anything but that.  i don't want it going to some defence contractor to spends 100 years claiming they can shoot down bullets with bullets.

Plane

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #3 on: November 27, 2006, 06:16:35 PM »
Personally, I think that Social Security should be EXPANDED and the retirement age lowered to 60 and if taxes have to be raised to do it, then sign me up.

But don't use the money for anything but that.  i don't want it going to some defence contractor to spends 100 years claiming they can shoot down bullets with bullets.



The trend is to spend more on entitlements and a lower percentage on defense already .

But it is also the trend to reduce the SS benefit while includeing more payees.

Your idea is to expand the base of a Pyramid scheme which is already single handedly makeing our tax scheme regressive where it used to be progressive.

There is nothing that you could stand to do that will prevent the demise of the Social Security , the only question is when.

Universe Prince

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #4 on: November 27, 2006, 08:17:40 PM »

Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.


What they can afford to pay? This is just sad. If we were talking about, say, a doctor's office that adjusts its pricing according to how much people can afford to pay, that would be okay. But we're talking about taxes, money taken away from people.


“How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”


Indeed. Clearly the taxes paid by his employees should be reduced.


Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”


How, exactly, is the "rich class" making war? For that matter, what, exactly, is the "rich class"?


The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.”

The sad fact is that spending rises every year, no matter what people want or say they want. Every president and every member of Congress promises to cut “needless” spending. But spending has risen every year since 1940 except for a few years after World War II and a brief period after the Korean War.


Oh, well then obviously we should stop arguing that cutting spending makes more sense. Raising taxes is the solution, just like the answer to more people going into debt is not to tell people to spend wisely or to save money but rather to tell them to earn more money. Yeah, that'll solve everything. (That was entirely sarcastic, of course.)
Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever.
--Hieronymus Karl Frederick Baron von Munchausen ("The Adventures of Baron Munchausen" [1988])--

Xavier_Onassis

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #5 on: November 27, 2006, 10:14:21 PM »
This could be reversed by the elimination of the Social Security portion of the taxes.

Do we all hate Social Security now?


How long till we all do?
==============================================================
Every day, another Boomer retires.
EVery day, more people LOVE Social Security.

Observe how Juniorbush's lame plan to "reform" SS went precisely nowhere. If that is where he spent his "political capital", its all gone down the toilet now.

The fact is that more money is going into SS than is coming out of it at the moment. What needs to happen is the Juniorbushies must stop pissing away the excess.

"Time flies like an arrow; fruit flies like a banana."

Plane

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #6 on: November 27, 2006, 11:17:34 PM »
This could be reversed by the elimination of the Social Security portion of the taxes.

Do we all hate Social Security now?


How long till we all do?
==============================================================
Every day, another Boomer retires.
EVery day, more people LOVE Social Security.

Observe how Juniorbush's lame plan to "reform" SS went precisely nowhere. If that is where he spent his "political capital", its all gone down the toilet now.

The fact is that more money is going into SS than is coming out of it at the moment. What needs to happen is the Juniorbushies must stop pissing away the excess.



"...must stop pissing away the excess."

What did you have in mind?

When "Junior" tried to promote an idea that would taks a portion of the stream away from the general fund he was shot down in flames.

There has been an excess ever since FDR and it has been pissed away by every congress since then , I think that if "Junior Bush" were to try to do as you say you would join the line to kick him.

The death of the entire system is certain , who will love it then?


Brassmask

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #7 on: November 28, 2006, 12:51:20 AM »
Plane,

Get real.  SS is going nowhere until there are no old people.  Why do you hate an idea that attempts to take care of the elderly?  Why do you hate old people?  Should we just throw them on the trash heap when they can't work anymore?  Suppose someone has spent their life doing for others all their lives and never saved for the retirement, are we supposed to say, "Oh well, shoulda been more selfish and saved some for you!!!  Go jump off a bridge, loser!"

SS is a ball that is rolling that can never be stopped and old people vote, so get over it.  It's here to stay.

America has social leanings.  This is social.  Get over it.

BT

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #8 on: November 28, 2006, 01:21:08 AM »
Quote
America has social leanings.  This is social.  Get over it.

A while back i read that the iou's to SS added up to over 85 trillion dollars. Any idea where that will come from once the boomers start retiring?

Methinks it will be you and yours. And at a rate much higher than you are paying now.


Brassmask

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #9 on: November 28, 2006, 01:25:51 AM »
Quote
America has social leanings.  This is social.  Get over it.

A while back i read that the iou's to SS added up to over 85 trillion dollars. Any idea where that will come from once the boomers start retiring?

Methinks it will be you and yours. And at a rate much higher than you are paying now.



I couldn't care less.  It's my duty as an American to carry on to keep great traditions as SS in effect in case I someday need help when I retire or can no longer work.  The only thing I can do is vote for leaders who will learn that SS money should be kept in a lockbox.  As I hope to get the opportunity to do so in 2008.


Plane

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #10 on: November 28, 2006, 01:27:51 AM »
Plane,

Get real.  SS is going nowhere until there are no old people.  Why do you hate an idea that attempts to take care of the elderly?  Why do you hate old people?  Should we just throw them on the trash heap when they can't work anymore?  Suppose someone has spent their life doing for others all their lives and never saved for the retirement, are we supposed to say, "Oh well, shoulda been more selfish and saved some for you!!!  Go jump off a bridge, loser!"

SS is a ball that is rolling that can never be stopped and old people vote, so get over it.  It's here to stay.

America has social leanings.  This is social.  Get over it.


I might be retirement age before you are , but if I could opt out of the system right now and save ten years worth of 6% of my blue collar pay in a saveings account with 5% intrest I would be eager to accept the deal.

You have taped one of your eyes closed , imagine the RBE with twice as many people takeing as makeing , that wouldn't work would it?

I am not telling you that SS SHOULD fail I am telling you that it SHALL fail , it will not be anything that anyone does to kill it except that there will be too many recevers and too few contributers,

Plane

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #11 on: November 28, 2006, 01:33:42 AM »
Quote
America has social leanings.  This is social.  Get over it.

A while back i read that the iou's to SS added up to over 85 trillion dollars. Any idea where that will come from once the boomers start retiring?

Methinks it will be you and yours. And at a rate much higher than you are paying now.



I couldn't care less.  It's my duty as an American to carry on to keep great traditions as SS in effect in case I someday need help when I retire or can no longer work.  The only thing I can do is vote for leaders who will learn that SS money should be kept in a lockbox.  As I hope to get the opportunity to do so in 2008.




Could you live on 6% of your present pay?

Could you live on 12% of your present pay?

Long before you reach retiremment age, the number of recipients will equal the number of contributors , even with the contribution doubbled that won't be enough to give the entitled amount or even enough for a bare living.

When the number of recipients is equal to the number of contributors the tax for SS will need to be 50% or so just to stay even and then the spending on the rest of the government will land on that.


What will a lock box do for you then?

Brassmask

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #12 on: November 28, 2006, 01:47:10 AM »
*YAWN*

Fearmongering is so '05.

kimba1

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #13 on: November 28, 2006, 01:53:52 AM »
the problem is it actually require people in general cut up their credit card and live within their means and save abit.
not gonna happen
thats crazy talk.

Plane

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Re: Rich Not Paying Fair Share No Matter How You Split It
« Reply #14 on: November 28, 2006, 02:08:22 AM »
*YAWN*

Fearmongering is so '05.



Don't just close your eyes ,
clamp your hands over your ears and shout Bla Blah Bla at that top of your lungs.

You will have to exert yourself to ignore the odvious long enough for the freight train to pass over you before you notice it.


How do you imagine the SS haveing enough resorces with anything like half the population retired?

Remember
Quote
Every day, another Boomer retires.
EVery day, more people LOVE Social Security

How many more is the problem exactly .