Warren Buffett - "Stop Coddling the Super-Rich" - Page 49

..WASHINGTON (AP) — President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said as he announced his deficit-reduction plan this week. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

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.

In his White House address on Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the "Buffett rule," named for the billionaire investor.

The rule says, "People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay." Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said. "That's pretty straightforward. It's hard to argue against that."

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. But that's less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.

The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.

"People who are doing quite well and worry about low-income people not paying any taxes bemoan the fact that they get so many tax breaks that they are zeroed out," said Roberton Williams, a senior fellow at the Tax Policy Center. "People at the bottom of the distribution say, 'But all of those rich guys are getting bigger tax breaks than we're getting,' which is also the case."

Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates.

"So it really depends on what is your profession, where's the source of your income, what's the specific circumstances you face, and the averages won't really capture that," Geithner said.

On September 20 2011 19:09 Brotkrumen wrote:
Not a paycheck. Everyone has a right to life (which includes health, food and shelter), liberty (which includes the ability to make rational choices freely without being pressured by life, as defined above, threatening circumstances) and pursuit of happiness (free speech, religion, action and education).
RTFC.

On September 21 2011 01:51 xDaunt wrote:
From the AP:



http://news.yahoo.com/fact-check-rich-taxed-less-secretaries-070642868.html


So what is "rich" and how much should the "rich" pay as a percentage of their income?

On September 21 2011 02:06 Bibdy wrote:


Wow, talk about cherry-pick reporting. The rich who ARE paying more in taxes 'than their secretaries' would be completely unaffected by the changes Obama is proposing. Only the ones who are paying disproportionately less are being targeted. That article is trying to make it sound like everyone earning over $1M gets screwed.

On September 21 2011 02:21 xDaunt wrote:


The article basically says that Obama is tackling a predominantly imaginary problem. Only a very small percentage of the rich pay a lesser proportion of their incomes than the average middle class family, and the only reason why they do is because they are claiming largely capital gains/dividend/investment income, which is taxed at a lower rate because the principal from which this income is derived has already been taxed once.

On September 21 2011 02:24 MeLlamoSatan wrote:(...) Proponents of its abolition usually are either misled or want to see the disenfranchisement of "the poors." (...)
The preferred doctrines are 'care about yourself, don't care about anyone else' and that's a very good way to trap and control people.

On September 21 2011 02:01 Kaitlin wrote:


You can't apply what rights you have or think you have in Germany to what applies in the U.S. The bold came straight out of your ass, as it applies to rights in the U.S. The phrases, as I recall in our Constitution is "life, liberty, and the pursuit of happiness". Further, the rights in our Constitution are protected from Government infringing upon them. There is no right to shelter, food, health, or my personal favorite: "the ability to make rational choices freely without being pressured by life". WTF is that ?

On September 21 2011 02:24 MeLlamoSatan wrote:
Public education is completely necessary for a functioning democracy. Proponents of its abolition usually are either misled or want to see the disenfranchisement of "the poors." That isn't to say there is no place for private education, but to abolish the public education system would do terrible, terrible things for a large percentage of our (US) population.

Similar public services, like Social Security are under great attack and may soon be dismantled.
Social Security is based on a principle. It's based on the principle that you care about other people -- and that's a notion you have to drive out of people's heads, the idea of solidarity, sympathy, mutual support -- that's doctrinally dangerous to the ruling class. The preferred doctrines are 'care about yourself, don't care about anyone else' and that's a very good way to trap and control people. I think this idea is very important to keep in mind.

On September 21 2011 02:29 MeLlamoSatan wrote:
Mr. Strawman, go home.

On September 21 2011 02:32 b3h47pte wrote:


That's the declaration of independence.

On September 21 2011 02:33 Kiarip wrote:


that's a cool conjecture... if only it was substantiated by something.

On September 21 2011 02:37 Bibdy wrote:

Public education isn't, but education itself certainly is. That's just common sense. The more you deny people an education, the less they're going to be aware of their role in society, their rights and responsibilities. If you can't read and write, do basic math, and voice your opinions in a cohesive fashion, you're not going to be participating, and the Democracy itself will suffer as a result.

On September 21 2011 02:37 Bibdy wrote:


Public education isn't, but education itself certainly is. That's just common sense. The more you deny people an education, the less they're going to be aware of their role in society, their rights and responsibilities. If you can't read and write, do basic math, and voice your opinions in a cohesive fashion, you're not going to be participating, and the Democracy itself will suffer as a result.

On September 20 2011 22:43 TanGeng wrote:
Let's talk about Buffett again. IMO, this man keeps getting more odious with every year. His only saving grace is that he's giving all of his money to the gate foundation. http://www.spectator.co.uk/essays/all/7222663/a-rich-man-for-all-seasons.thtml

In recent years, Buffett's been more of a vulture swooping in for distressed assets. He's hugely benefited from the bailouts to financial firms by the US treasury and the Federal Reserve via his loans to GS & GE. Now he's advocating a tax increase that doesn't apply to himself at all.

Here's Huffington Post calling Buffett out on it. http://www.huffingtonpost.com/2011/09/20/obama-buffett-rich-taxes_n_971388.html Not making the distinction between dividend/investment vs wages is deeply misleading. Using that to demagogue about a tax increase on those earning wages more than 1 million (who already pay the highest rates) is downright disgusting.

On September 21 2011 04:12 TanGeng wrote:
Did you read some of the provinces of the tax increases? While rhetorically, it sounds nice to say that the Buffett rule will be targeted at those people paying a lower effective rate than the middle class, the provisions proposed by the administration will fall much more heavily on those already highly taxed, aka the predominantly high wage earners and not the high cap-gains/dividend earners.

Here are the two big ones.
1. Allow the 2001 and 2003 high-income tax cuts to expire and return the estate tax to 2009 parameters.
2. Reduce the value of itemized deductions and other tax preferences to 28 percent for families with incomes over $250,000.
These two provisions fall most heavily on the ones paying very high marginal rates. In other words not, they're not the type that derive most of their income from dividends and capital gains. That's not Warren Buffet.
There is also no mention of repealing the capital gains and dividend rates. There are some other bits about treating certain interest and dividends as ordinary income. Those two provisions are estimated at $866 and $410 billion respectively.
For all the buzzword bingo with "Warren Buffett rule" and minimum effective tax rates, there's no estimate of what that would mean for IRS revenue, nor concrete provision for its implementation. I'll believe it when I see it.