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sunprince
United States2258 Posts
On August 17 2011 11:08 hacpee wrote: And you think most good athletes (MJ) didn't make the majority of their cash on endorsements? Yes, but what's your point? Obviously it's a regressive tax system if most good athletes pay only a tiny fraction of their income since they make the majority from endorsements. | ||
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dreamsmasher
816 Posts
On August 17 2011 11:08 hacpee wrote: And you think most good athletes (MJ) didn't make the majority of their cash on endorsements? that's exactly what he's saying read what i wrote in my post. the traditional way of thinking is that increasing marginal tax rates decreases marginal productivity, and by neoclassical economics that the people who make the most are the most productive (in the economic sense, not the colloquial sense). thus those people will spend and 'reinvest' so to speak back into the economy. what buffet is saying is that for the mega rich -- this traditional logic does not hold. for example my parents recently bought me a pretty nice computer and smartphone + data plan. i was really taken aback because when i was growing up my parents did not have the level of income that they make, but when i asked my parents about it (feeling kind of bad to allow them to spend so much money on a whim), they just said tax write off on behalf of dad's business. | ||
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kwisatzhaderach
Canada3 Posts
Taxes should be a flat % regardless, amongst all levels of income imo. No matter how much money you make, you still need to spent a minimum amount of money to live (i.e. to buy food, clothing, etc...) Under your proposed scheme, lower income individuals will be under a higher tax burden because they will spend a higher percentage of their income on the bare necessities. A higher income individual will spend around the same on the bare necessities and will end up with significantly more money to spare after paying taxes. You can think of the existing tax system as flat for everyone but lower for lower income classes so that they don't get completely shafted. | ||
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domovoi
United States1478 Posts
On August 17 2011 10:57 sunprince wrote: Are you deliberately playing dumb, or truly incapable of understanding why low taxes on capital gains and dividends amounts to a regressive tax system? Do you know anything about US taxation policy? It's one of the most progressive taxation systems within the Western world (due to the lack of VAT). However, overall rates are lower than other countries. Also, capital gains tax is double taxation. The invested money comes from your income, which was taxed. When the investment is liquidated, it's taxed again. | ||
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thisisSSK
United States179 Posts
On August 17 2011 11:06 hacpee wrote: You can describe many things in simplified terms depending on what you want to know. OK I can do that about the global economy: People buy and sell stuff in hopes of profits. End of Economics class! | ||
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dreamsmasher
816 Posts
On August 17 2011 11:12 domovoi wrote: Do you know anything about US taxation policy? It's one of the most progressive taxation systems within the Western world (due to the lack of VAT). However, overall rates are lower than other countries. Also, capital gains tax is double taxation. The invested money comes from your income, which was taxed. When the investment is liquidated, it's taxed again. there are ways to avoid capitals gains taxes. most large corporations pay almost nothing in terms of taxes. a good one that is accessible by even ordinary people is to set up a roth IRA (i'm not hugely knowledgeable about all the methods, but my parents setup one for me when i was a kid too), or setting up a charitable foundation (gates etc...) | ||
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rhs408
United States904 Posts
On August 17 2011 11:05 Retry17 wrote: I laugh at people telling me that lowering taxes is not effective. History tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden. Periods of higher tax rates (when you try to over tax the rich) are associated with sub par economic performance and stagnant tax revenues. Lets look at some nifty facts from history. Did you know that President Kennedy implemented across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation). The share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent. President Reagan (an era that is commonly bashed because people don't focus on the positives of tax cuts and instead focus on government spending) proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation). The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988. Don't tell me I have strawman arguments when the facts are right in front of your face. These aren't my fucking ideas, history has proven them. I don't understand how you could argue any of these facts, but I eagerly await the posts telling me that I don't understand anything and to go back to the 10th grade. What you obviously are not grasping is that the world and economy are tremendously different in 2011 than they were 50 years ago in the 1960's and 30 years ago in the 1980's. This way of economic thinking was tried by Bush for 8 years (starting in year 2000, when the world and economy are similar to what we have today) and we are still dealing with the negative after effects of it today. The "Bush tax cuts" are still in place, and Republicans refuse to let them expire, hence the rich keep getting richer. Those are the facts, the recent facts, that actually have a bearing on our economy today. Please don't bring up Kennedy again. | ||
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domovoi
United States1478 Posts
On August 17 2011 11:15 dreamsmasher wrote: there are ways to avoid capitals gains taxes. most large corporations pay almost nothing in terms of taxes. Wrong. Corporations pay a ton in taxes. Not sure what that has to do with capital gains... a good one that is accessible by even ordinary people is to set up a roth IRA (i'm not hugely knowledgeable about all the methods, but my parents setup one for me when i was a kid too), or setting up a charitable foundation (gates etc...) Uh, rich people can't set up a Roth IRA. They can set up 401k's like everyone else, but they are limited to $15,000 in contributions a year. And that only avoids income tax. That doesn't avoid capital gains tax. It's taxed when you cash in on it. Stop making up shit, seriously. | ||
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Rassy
Netherlands2308 Posts
Raising the capital gains tax wont help alot i am afraid They all got rich for a reason and they will want to stay rich and they will simply hire an advisor who shuffles the numbers in such a way that it shows a verry small profit or even a loss Besides this: the realy rich dont pay taxes annyway lol, they all got their monney on the kayman islands and in foundations... and what not The rich rule the world, dont like it but its just the way it is and no tax or law will ever change it still its nice from warren buffet to say such a thing its a rather easy thing to say when you have so much monney that even if you would have to pay half of it in taxes, you would still be like the 10th richest person in the world but its still a nice thing to say  rich people DONT PAY TAXES, hope people will see this even if they taxed 70%, the realy rich wont pay that. they have advisors and can afford to go abroad its the middle class wich gets hurt by higher taxes for everything above say 30k a year | ||
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Dragom
194 Posts
On August 17 2011 11:05 Retry17 wrote: I laugh at people telling me that lowering taxes is not effective. History tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden. Periods of higher tax rates (when you try to over tax the rich) are associated with sub par economic performance and stagnant tax revenues. Lets look at some nifty facts from history. Did you know that President Kennedy implemented across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation). The share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent. President Reagan (an era that is commonly bashed because people don't focus on the positives of tax cuts and instead focus on government spending) proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation). The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988. Don't tell me I have strawman arguments when the facts are right in front of your face. These aren't my fucking ideas, history has proven them. I don't understand how you could argue any of these facts, but I eagerly await the posts telling me that I don't understand anything and to go back to the 10th grade. You forgot that Kennedy was assasinated by some Lee harvey Oswald and was succeeded by some crack head who decided to fight a war we couldn't winand that cost us a shit ton of money. And u also forgot that reagan started increasing taxes after 1981. AND you didn't take into account about deflation and the wealth gap getting bigger. Also, by 1983, the economy was getting better than it was for a decade. Your argument totally does not make sense. | ||
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Supamang
United States2298 Posts
On August 17 2011 11:00 hacpee wrote: There are 6 tax brackets. So when you win 6 star leagues, you continuously get less and less money. Then the decline stops. Now what progressives want to do is tax it up to 90%. So when you win 10 starleagues, you get 10% of your money. Then they also want to tax the money you earn on the side, IE endorsements which are like capital gains. First of all, who said progressives wanted to tax the top tier at 90%? If its true just give me the source and Ill believe you. Fun fact: 90% top bracket tax rates were under Eisenhower, a Republican president. Second of all, the way the tier system works is that its dependent on different sections of the money. The top tier being 90% does NOT mean 90% of your entire government goes to the government. Say the tax brackets were: 1. 0~$10K = 0% 2. $10K~50K = 10% 3. $50K~$100K = 20% 4. $100K+ = 30% If you made $150,000 a year, that does NOT mean you have to pay $45,000 to the government ($150,000 * 30% = $45,000). The amount you pay is going to be $29,000. The first $10,000 you earn of the $150,000 will be tax free so thats $0 taxes paid. The next $40,000 ($10K to $50K) will be taxed at 10%, meaning you'll pay $4000. The next $50K ($50K to $100K) will be taxed at 20%, meaning youll pay $10,000 of that bringing you to a total of $14,000. The final $50,000 of your $150,000 ($100+) will be taxed at 30%, meaning youll pay $15,000 of that, bringing your total taxes payable to $29,000. EDIT: This means that, switching out my fantasy tax brackets for the real current US tax brackets, if you are in the top tax tier you will always have an after-tax income of at LEAST $269,133. All your excess income above the top tier will be taxed at 35%. This is even assuming that you have taken no exemptions, deductions, etc. and that this is all "earned income" rather than other classifications such as "long-term capital gains", which currently get taxed at lower rates. Third of all, to people saying rich people pay their fair share, the tax code is not as simple as just tax brackets. There are LOADS of tax phase outs, exceptions, deductible expenses, and whatnot that can lower your tax burden to below what youd pay with just your gross income. Why do you think people study the tax code for years and are paid hundreds of thousands of dollars to do peoples taxes? (Ive studied tax for several years as requirements for my accounting undergrad and graduate programs. Not my favorite topic in accounting Ill tell you that) | ||
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Mortality
United States4790 Posts
On August 17 2011 10:36 thebigdonkey wrote: http://www.zimbio.com/pictures/kwze6btvQoc/Warren Buffett s Home/5BBHaXPy2Ro Yup that looks like the house of a man swallowed by his wealth and greed. You forget that he has shareholders and thousands of employees to look after. I challenge you to watch some interviews of him, his partner, and some of his employees. It's hard not to come away impressed at how grounded he is. I'm aware of what is house looks like. I never said anything about his motivations and I'm not going to speculate on them. Buffett doesn't make his fortune for the sake of buying expensive toys like so many nouveau riche types. I've seen him in interviews before. He always comes across well. But if coming across well in interview was everything then I guess your typical American politician really would be a nice guy? It's the way the man does his business that I have a problem with -- he's really not that different from the other "super rich" Wall Street types. I agree with the notion that we coddle the "super rich," but the problem is not simply an issue of taxes. There's no accountability. And that's the real issue. | ||
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domovoi
United States1478 Posts
There are LOADS of tax phase outs, exceptions, deductible expenses, and whatnot that can lower your tax burden to below what youd pay with just your gross income. Very unlikely. AMT says hi. | ||
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hacpee
United States752 Posts
On August 17 2011 11:11 dreamsmasher wrote: that's exactly what he's saying read what i wrote in my post. the traditional way of thinking is that increasing marginal tax rates decreases marginal productivity, and by neoclassical economics that the people who make the most are the most productive (in the economic sense, not the colloquial sense). thus those people will spend and 'reinvest' so to speak back into the economy. what buffet is saying is that for the mega rich -- this traditional logic does not hold. for example my parents recently bought me a pretty nice computer and smartphone + data plan. i was really taken aback because when i was growing up my parents did not have the level of income that they make, but when i asked my parents about it (feeling kind of bad to allow them to spend so much money on a whim), they just said tax write off on behalf of dad's business. OK let me put it this way. If progressives had their way, on the 10th starleague win, you would only get 10% of the prize.(IE 90% income tax in 1960s). | ||
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sunprince
United States2258 Posts
On August 17 2011 11:12 domovoi wrote: Do you know anything about US taxation policy? It's one of the most progressive taxation systems within the Western world (due to the lack of VAT). However, overall rates are lower than other countries. It might appear that way when you only look at income taxes, but that's not how it works out in reality. If you consider all forms of taxes, including income, capital gains, SS, etc. and/or the different ways in which the wealthy can mitigate their taxes, it's progressive only up to the upper-middle (professional) class, then drops off sharply for the richest Americans. On August 17 2011 11:12 domovoi wrote: Also, capital gains tax is double taxation. The invested money comes from your income, which was taxed. When the investment is liquidated, it's taxed again. The invested money for the rich mostly comes from other investments, not income. Additionally, only the gain is taxed when an investment is liquidated, so the initial investment is only taxed once. | ||
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hacpee
United States752 Posts
On August 17 2011 11:20 Supamang wrote: Second of all, the way the tier system works is that its dependent on different sections of the money. The top tier being 90% does NOT mean 90% of your entire government goes to the government. Say the tax brackets were: [b]1. 0~$10K = 0% 2. $10K~50K = 10% 3. $50K~$100K = 20% 4. $100K+ = 30% If you made $150,000 a year, that does NOT mean you have to pay $45,000 to the government ($150,000 * 30% = $45,000). The amount you pay is going to be $29,000. The first $10,000 you earn of the $150,000 will be tax free so thats $0 taxes paid. The next $40,000 ($10K to $50K) will be taxed at 10%, meaning you'll pay $4000. The next $50K ($50K to $100K) will be taxed at 20%, meaning youll pay $10,000 of that bringing you to a total of $14,000. The final $50,000 of your $150,000 ($100+) will be taxed at 30%, meaning youll pay $15,000 of that, bringing your total taxes payable to $29,000. This is exactly what I just said. If you win your 10th starleague, you get 90% of that starleague's prize money. | ||
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domovoi
United States1478 Posts
what buffet is saying is that for the mega rich -- this traditional logic does not hold. Yeah, and he uses a fucking anecdote to prove it. And retarded people for some reason accept it as truth. Despite the overwhelming empirical evidence to the contrary. | ||
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dreamsmasher
816 Posts
On August 17 2011 11:17 domovoi wrote: Wrong. Corporations pay a ton in taxes. Not sure what that has to do with capital gains... Uh, rich people can't set up a Roth IRA. They can set up 401k's like everyone else, but they are limited to $15,000 in contributions a year. And that only avoids income tax. That doesn't avoid capital gains tax. It's taxed when you cash in on it. Stop making up shit, seriously. should have been more clear. roth ira is used to defer income tax liabilities. my other statements were just blanket statements. | ||
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sunprince
United States2258 Posts
On August 17 2011 11:17 domovoi wrote: Wrong. Corporations pay a ton in taxes. Not sure what that has to do with capital gains... a good one that is accessible by even ordinary people is to set up a roth IRA (i'm not hugely knowledgeable about all the methods, but my parents setup one for me when i was a kid too), or setting up a charitable foundation (gates etc...) Please read the following to see why you're completely wrong: http://www.gao.gov/new.items/d08957.pdf http://www.uic.edu/classes/actg/actg516rtr/Readings/Taxes/Corporate-Income-Taxes-In-The-90's---ITEP.pdf http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=1 http://www.nytimes.com/2011/05/03/business/economy/03rates.html A very simplistic reading of American corporate taxes shows that it is very high on paper, but the reality is that there's enough ways to avoid taxes that American corporations pay very little. | ||
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dreamsmasher
816 Posts
On August 17 2011 11:25 domovoi wrote: Yeah, and he uses a fucking anecdote to prove it. And retarded people for some reason accept it as truth. Despite the overwhelming empirical evidence to the contrary. i've actually never seen any studies that extends the logic to the mega rich. i could be just ignorant to the matter. its quite possible that what he means is an extension of his value based investment strategy and thinks that even a higher tax rate will not affect his investment (or any responsible investor's) choices on how they invest. but corporations by and large do have a lot of tools to evade taxes. http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html | ||
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