White House Proposes "Wealthy Tax" 2115
President Obama is proposing a new tax rate for people making over $1m a year. The new rate is part of a larger plan which seeks to bring in $1.5 trillion in new tax revenue and is sure to meet opposition in congress. From the article: "The core of the president's plan totals just more than $2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare." GOP Rep. Paul Ryan of Wisconsin said, "Class warfare may make for really good politics but it makes for rotten economics."
Re:Tax planning and rich people (Score:5, Insightful)
Who cares how 'large' the incentive is? There will always be incentive for people to cheat to keep their money. It's our patriotic duty to make sure they pay their fair share for this country. This is a step in that direction.
Re:Honest Question (Score:2, Insightful)
The question may be honest but irrelevant. Nobody with power cares about "the economy". Saying you do just sounds better than "I got bribed to prevent taxes for rich people".
Yeah, class warfare. That's right. (Score:5, Insightful)
It is class warfare to increase tax rates in the highest income brackets to a level that is about half that of the 1950s http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#1913_-_2010 [wikipedia.org]. The current tax rate for the highest income brackets is 33%. In the 1950s and 1950s the highest tax rate was 91%. One can also argue that the proposed increased tax rate won't even restore the high tax rate to the same extent, since the historical tax rates were for income of at least $250,000, whereas this will apply to income of at least a million dollars but this would be slightly misleading since adjusting for inflation $250,000 in 1960 dollars is around a 2 million now. But even given that, the general point should be clear: This is far less than the historic tax rate during a time period that is often considered to be one of the most stable and prosperous.
The other problem with labels like class warfare is how much they miss the point of what actual class warfare is. If one wants to see actual class warfare look at the French Revolution where aristocrats and clergy got executed and this eventually spread to wealthy merchants. Or look at the Russian Revolution and the following years where people were punished and exiled for simply being farmers who owned their own land and equipment. That's class warfare. Voting to increase tax rates to levels well below historical levels is just regular economic policy. One can discuss whether such taxes are a good or bad thing, but it is pretty clear that such discussion isn't going to go very far when people like Ryan are using this sort of ridiculously inflammatory rhetoric.
Re:Tax planning and rich people (Score:0, Insightful)
Keeping the money that you earned and worked for is cheating, as opposed to having it taken from you by force and redistributing the money to what other people lobbied for? Or failed projects like Solyndra? Or questionable involvement in wars that have no impact on us?
This is not patriotic. This is just a step towards tyranny. Obama could take 100% of what the rich make and it wouldn't solve any of our problems.
Re:Tax planning and rich people (Score:5, Insightful)
So instead of giving them "reason" to seek tax loopholes, you suggest giving up that tax revenue without a fight? How is that going to result in a revenue increase?
Some rich people (and wannabes) always bring up the "they (yeah right) will leave and go to tax havens. I say good riddance. If they like it better in those countries, what's stopping them? Or do they just want to stay here and twist our arms, because they actually like it here, you know, with the jobs and the infrastructure, and just don't want to pay as much taxes?
Re:Anti-Rich People Rhetoric (Score:5, Insightful)
Re:Tax planning and rich people (Score:5, Insightful)
Keeping the money that you earned and worked for is cheat
BWAHAHAHAHAHAH. LOL.
The vast majority of this income in this range is "Unearned Income." People aren't earning nor working for multi-million dollar annual incomes, they are enjoying the benefits of others work by collecting dividens and stock profits.
-Rick
Re:Honest Question (Score:3, Insightful)
Re:Tax planning and rich people (Score:5, Insightful)
No, using public services to make money, then hiding your earnings so that you don't have to pay for those public services is CHEATING. EVERYONE in this country benefits from tax-funded services. But the rich seem to think that because they make millions, they don't have to contribute.
Let's put it this way: I am one car on the road, and I have to pay taxes for road upkeep. Mr. Millionaire has a fleet of 1000 semi trucks to deliver his product, but he doesn't have to pay for road upkeep? Does that seem fair to you?
Re:Tax planning and rich people (Score:5, Insightful)
Keeping the money that you earned and worked for is cheating...
Only true if you did not in any form, directly or indirectly, benefit from society. Say, by ever buying anything that used any sort of public infrastructure (and benefitting from the reduced price).
"Money you earned and worked for" is not as simple a term as you might think - tied in with that work and its value are layers upon layers of additional worth, all stemming from the society you live in. Society is not robbing you - even if you paid 90%, you would still be getting a bargain, compared to how you much you and your time is worth sans society.
Re:Tax planning and rich people (Score:3, Insightful)
So because people will play games with taxes we should just set all taxes to 0%, right?
The whole idea for upping the rate is because those on such incomes will be doing such things with their taxes. So since you are only going to get to a tax some portion of their income you have to use a higher rate to get the same end amount. And yes that sucks for the people who don't want to bother tax planning.
And do you really think anyone is going to say - well I was fine with the federal income tax taking $3,500,000 of my income but now that they want $4,500,000 I'm going to start "playing games". I suspect they're already doing all they can.
Re:Tax planning and rich people (Score:2, Insightful)
Rich people use more public services than poor people in support of their activities. So yes, a larger percentage.
Not to mention if you fail to regulate capitalism by tweaking the "score," the inevitable result is slavery.
Re:Tax planning and rich people (Score:5, Insightful)
Sorry, but that's just stupid. You could as easily say that working people aren't taxed, they just pass the costs to their employers.
You can't pass the cost to your customers if your competitor doesn't. I have no choice in my personal taxes, but I choose whether or not I pay Kraft's taxes.
Total Lack of Cognitive Dissonance (Score:5, Insightful)
For those of you who are going to dispute my point, here are some preemptive replies. First, I know that folks on the left do this shit all the time too. I remember Kerry's "flip flopping" helping cost him the 2004 election. But pointing to the other side and saying "See, they do the same reprehensible thing we do" does not actually make it okay. It's still downright disingenuous. My point is simple: How much money does it take to be rich? Because the conservatives in America have two different definitions that depend not on the amount income, but essentially on class. The fact that these same conservatives are the first to scream "Class Warfare!" at this kind of proposal is deliciously ironic and the whole thing would be fucking hilarious if the stakes weren't so high.
Reality check: to solve the long-term debt crisis, two things need to happen. Taxes need to go up, and spending needs to go down. Either side that says you can do one but not the other is living in some magical fairy-tale land where facts are superseded by what they wish were true.
Re:Work hard, become successful, prosper... (Score:5, Insightful)
If by "work hard" you mean go to a business school where they will give you a adress book of other self content bastards who will exclusively hire you instead of someone competent and teach you how to maximize short term profit until you can use your golden parachute (only to be hired the next month by another rogue corporation's board), then that's what you deserve. This is about 50% of the rich, "hard working people". Add to that the 45% of lucky sperms, and you have 95% of the rich out there.
Working hard is by far no guarantee to get wealthy.
Being rich is by far no proof to have worked hard.
Small business (Score:5, Insightful)
The important thing is to spare small businesses from the tax increase. A lot of small businesses are either simple proprietorships/partnerships or LLCs, for which the profits are taxed as an addition to personal income. Proprietors and partners will pay these taxes from the cash on hand of the business, meaning that the business has fewer resources to expand and hire more employees.
So go ahead and tax the $20M CEOs and such, but try to avoid placing the additional burden on small businesses.
Re:More expenses? (Score:2, Insightful)
Don't kid yourself. You're not rich. This isn't about you, even if Fox tries to convince you otherwise.
At best you're some middle-class chump who generates money for those who are actually rich.
Re:Yeah, class warfare. That's right. (Score:5, Insightful)
You're giving the phrase too much credit. The term "class warfare" is just an advertising slogan. It's what conservatives say in response to any program which might raise revenues on the upper class. It's not something that can be torn apart and dissected - it's just a phrase meant to evoke a gut response and get people to vote the other way. History means nothing to a slogan.
Re:Honest Question (Score:3, Insightful)
Transferring wealth from earners to non-earners just makes the economy contract as less money is put to accomplishing real work.
I have a sneaking suspicion that your definition of an "earner" would turn the stomach of any fair minded individual.
Re:Honest Question (Score:5, Insightful)
What's happening right now is not unlike many third world countries where the rulers grab millions from foreign aid while the people live on a dollar a day. Most of those have a somewhat working economy, they just live in separate worlds where you buy and sell products and services to other equally poor people. I don't think we're heading for a permanent jobless economy, just one with much bigger class separations again with an overclass that can be even more lavish with servants and luxuries. Because their money work for them, it's still diverging even if they're spending big.
Re:Anti-Rich People Rhetoric (Score:2, Insightful)
At long last, someone on Slashdot that understands how an economy works.
Consumer demand drives growth, not rich people investing in gold and government bonds. Companies with money to spend don't expand production (and jobs) if they don't see demand increasing.
And right now they don't see demand increasing so they don't need to expand or hire more people. So they just sit on the money, or they invest in productivity improvements which leads to job losses.
Raising taxes on the rich is the ONLY thing that will save this economy.
Re:Tax planning and rich people (Score:5, Insightful)
First, there isn't enough money in million+ income hands to balance the budget.
That's no reason why they shouldn't contribute to balancing it.
This smells like more class warfare shit,
Yeah, and the middle class is losing the war. We should start fighting back.
and now they'll tax the remaining producers into moving their assets out of the country. Maybe it'll get him re-elected, right? We'll worry about the economy in the 2nd term.
Nice disingenuous straw man there, Mr. Koch. This isn't about corporate taxes, this is about personal income tax. Why should Warren Buffett pay half the rate his secretary does? Buffet vs his secretary IS class warfare.
Re:Tax planning and rich people (Score:2, Insightful)
So all they did was give even larger incentive for rich people to start playing games with taxes. Remember that tax planning isn't illegal, nor is forming offshore companies. It's unlikely to change as well, because foreign companies are needed too. As long as you keep the money in the offshore company accounts and not your personal ones, you don't need to pay taxes from them. The people making over one million dollars a year have all the means to do this - normal working people don't.
You know what, maybe start looking if the huge companies pay taxes? For example Google does a insane amount ($60 BILLION) of tax dodging [bloomberg.com].
First, companies don't pay taxes. Their customers do. To put it simpler, when you tax a company, they raise prices to pay that tax. Customers pay those higher prices to cover that tax. Companies don't print money. They get paid by their customers.
Next, the best way to eliminate "creative accounting" in regard to taxes is to make the system simple. A national sales tax, for example, would eliminate any benefit from basing your companies off shore. The only way around a sales tax is to buy stuff off the black market or move yourself off shore.
I know that people don't like the idea of everyone having to pay taxes and they balk at the idea that rich people will get to spend all of the money they receive, but a sales tax is the only fair tax. Rich people spend more money, thus pay more in taxes. Poor people spend less money, thus less in taxes. Don't want to pay taxes, don't spend money. I understand that the wealthy can afford to save large sums of money to avoid taxation, but the money will get spent eventually, meaning it will get taxed eventually. All capital gains will be taxes. All bonuses will be taxed. All the money that those greedy fat cats will receive will get taxed. No amount of tax attorneys can get around a sales tax.
Re:Tax planning and rich people (Score:4, Insightful)
Based on your argument, they should cut the taxes on the low and middle class to at most half of what they currently are, since that's about what the wealthy are currently paying. If Warren Buffet, one of the richest men in the world, says that it's not fair that he pays less in taxes than the middle-class people who work for him, why are you arguing? Or are you one of those few wealthy elites who is going to suffer from the tax changes that would otherwise benefit the vast majority of us slashdotters?
I don't like paying taxes any more than you do, but it's something we all have to do to contribute to our communal well-being. If you really don't want to pay taxes, go buy yourself a private island and run the entire thing autonomously. I bet you'll pay a lot more in "upkeep" and "maintenance" than you're currently paying in "taxes", and get a hell of a lot less for it. I'm not saying that all of our tax money is being used in the best way possible all the time, but I like having roads to drive on, emergency services to call if there's a problem, and all the other benefits of living in this country that are paid for by taxes. And while there's a ton of services that I currently DON'T use, that doesn't mean I won't pay my share now so that (in theory) they'll be there for me when I do need them. But it's a crime, morally and ethically if not legally, that the wealthiest members of our society who have the GREATEST ABILITY to pay their taxes, also have the most loopholes to get around paying them. If they don't want to pay their share, how about we strip them of their citizenship and let them move to some other country whose tax laws are probably a lot worse for them than even the proposed changes here. And since IIRC there are laws about taking money out of the country, they'd end up paying a lot of that in taxes when they left anyway.
To anyone who makes over $1M/year and claims that raising their taxes is unfair, SUCK IT UP. Those of us who make a LOT less than that are finding perfectly good ways to live our lives within our means, and if you can't afford to live within yours, CHANGE YOUR LIFESTYLE.
Re:Honest Question (Score:3, Insightful)
To quote Ayn Rand in a manner neither she nor the Tea Party she's apparently taken over the role of economic authority for would probably like...
"Americans were the first to understand that wealth has to be created. The words 'to make money' hold the essence of human morality."
To put it simply, the fact you have money does not mean you created value represented by that money. Managers qua managers do not create wealth. Investors do not create wealth. Engineers create wealth, by multiplying the value of labor and materials.
Engineers, predominately in the "middle class", create, and thereby -earn-, money. For derivative forms of acquisition of money, which is the means of the majority of the "upper class", it is much more accurate to say they "get their hands on" money than they "earn" it.
This is the premise that the Right in the U.S. will only accept insofar as it's a tautological definition where they simply declare "I happen to have this much money, therefore I earned proportionately that much more". No, absolutely not. You simply have a zero barrier-to-entry in the business processes you participate in, by virtue of already having money, relative to those who don't have it at equivalent scale. This will be discovered soon enough in the U.S. when we have plenty of people still willing to move money around, and move people who create money around (as long as it pays sizable dividends for marginal actual personal value-add), and nobody actually creating the value without which money is meaningless.
The delusion that "having money = earning money" is presently being refuted in America in the most direct, manifestly-obvious way.
Re:Tax planning and rich people (Score:4, Insightful)
Re:Tax planning and rich people (Score:4, Insightful)
Precisely.
Republicans have always been the party of class warfare - the rich beating up on the poor. Every time the Republicans get into power they want "tax cuts" that they say will "spur economic growth." NEVER in history has this actually worked as they claim it did - voodoo economics was terrible.
Paul Ryan and the Republican liars scream about Reagan "cutting taxes"... they always forget that Reagan RAISED taxes again in 1983 and 1986 when the Democrats in congress demanded it, because it was evident that keeping taxes low just increased the deficit and the debt.
still an income, not a wealth tax (Score:5, Insightful)
Note that this is still an income tax -- not a wealth tax. Those who are already wealthy can and will always game this such that they report little income, thereby preserving their wealth. If necessary, they'll just keep their money offshore.
If he had any sense, he'd offer an amnesty to the wealthy. Allow them to repatriate their funds from overseas at a reduced tax rate so that money comes back to the US. The money the treasury makes on that smaller percentage would still be more than the zero they get from it today.
Re:Tax planning and rich people (Score:5, Insightful)
But, earning money is not a side affect of society, it is the primary purpose of society to provide order and mechanisms for economic growth
No, it isn't. The primary purpose of society is to continue the existance of the society. Economic growth is a result of our current growth rates and stability of social interactions. Consolidation of wealth however leads to threats to the continuation of society as we know it. The challenge though, is that many of those with wealth believe they would benefit more from a new society in which more wealth was consolidated. So they can use their wealth to influence people who aren't in their wealth class to believe that there isn't a threat to social stability.
It is a masterful art, but it will not lead to a better America.
That isn't to say that we need to get all commie and make everyone equal. A progressive tax program is hardly full on commie though.
And to counter your political jab: We all know what happens when Republicans propose tax cuts and spending cuts. Taxes decrease on the rich and the poor die in wars. :P
-Rick
Class warfare (Score:3, Insightful)
"Class warfare may make for really good politics but it makes for rotten economics."
Hey, that's actually true! Why didn't you shout out during the Bush administration?
Tax cuts for the rich, huge public deficit, enormous public debt, continued private indebting of the middle class, withering away of the public school system and other government systems that the American middle class and lower classes depend on...
Terrible acts of class war that lead to terrible economics, especially in the long term when the debt is going to be paid off, or alternatively when the US decides to default.
So you're right. Of course, if you don't want a class war the first thing to do is to remember to not start one.
Only Thing Being Taxed Here (Score:5, Insightful)
Goddamn Republicans beating the same fucking drum they've been beating for 10 years "Lower taxes and remove regulations so corporations can compete!" Ignoring the fact that that's what got us into this mess to begin with.
And Goddamn Democrats incapable of showing anything resembling leadership. Hook up that vagisil IV drip because they're just a bunch of vaginas.
Vote them out. Vote them all out. And keep doing it until we find some representatives who are more interested in solving the nation's problems than playing political games with American lives as the pieces.
Re:Ryan is ignorant of economic history (Score:2, Insightful)
Remember how awful the economy was when Clinton was president? Eight horrible years of peace and prosperity, thank God that's long gone.
You mean how awful the economy was when the Republicans ran Congress?
America always seems to do best when there's gridlock due to different parties controlling Congress and the White House, because the perpetual conflict ensures they can't screw things up too badly.
Re:Honest Question (Score:5, Insightful)
I like hearing about how it is evil for companies to "hoard wealth" and then hearing from the same group how irresponsible companies are that didn't when they suffer an economic fall and don't have the reserves to survive without bailouts.
I save money wherever I can in case something happens such as job loss or other unforeseen hardships. My household includes my wife (who has MS and whose treatments cost a small fortune) and a 12 year old daughter and our household income nets less than 50,000 but I manage not to "easily" spend all my money.
Re:Tax planning and rich people (Score:5, Insightful)
No, using public services to make money, then hiding your earnings so that you don't have to pay for those public services is CHEATING.
Then why does the US tax every dollar you make overseas, even if you are overseas for the entire year? If I live in Thailand the entire year and earn my salary over there, I still have to pay US taxes on it - even though I didn't use any US public services. It's not about paying for what you use - it's about paying for what Government wants.
Let's put it this way: I am one car on the road, and I have to pay taxes for road upkeep. Mr. Millionaire has a fleet of 1000 semi trucks to deliver his product, but he doesn't have to pay for road upkeep? Does that seem fair to you?
Mr. Millionaire's company probably pays those taxes on those 1000 trucks. Unless you're suggesting he personally owns them? Do those trucks pay fuel taxes, excise taxes, and State registration taxes? How are they not paying for road upkeep - they pay fuel costs...
Re:Tax planning and rich people (Score:2, Insightful)
Great, so we can't tax rich people because they will dodge taxes?
You know, con men often get away scott free, so I guess we should just do away with laws against theft and fraud. No point trying to close loopholes in the laws or improving enforcement, since I'm sure they'll just find another way to get around those new laws too.
I'd keep discussing this with you, but I'm off to shoot myself in the head. You see, I won't be able to make my life perfect, so what's the point?
Re:Yeah, class warfare. That's right. (Score:5, Insightful)
The other problem with labels like class warfare is how much they miss the point of what actual class warfare is.
There's plenty class warfare going on, not just your extremes. Most people vote in interest of themselves and thus by extension their class, it's the wolf class and sheep class deciding what's for dinner. That the rich "shop around" for the biggest incentives and highest tax breaks is class warfare. Raising taxes on the rich saying "you can help pay too" is class warfare. Every time you talk about the burdens and benefits of living in society will run into this. And it's usually not a matter of what's right or wrong it's about power. The masses have strength in numbers, but the rich have strength in lobbyists and moving jobs. It's never going to be an evenly pitched battle because the tools are different, but it absolutely happens. All the time.
We're in TWO WARS. (Score:5, Insightful)
Re:Honest Question (Score:1, Insightful)
Simple Solution, though it will get panned here on /. ... REMOVE money from Government by limiting what Government can do.
I mean, the latest excuse for Soylient Green Solar Company is that "we needed to give half a billion to the company or else it would have folded" is exactly why Government should NOT be in the business of business. Where are all the lefties decrying the Big Business, Rich getting Richer types on that scandal? Oh, it was "green" energy, not Big Oil (tm) so that makes it okay, right?
At least Big Oil pays taxes, unlike all of Obama's friends like GE (green energy) Don't you all get it? Government is evil by its very nature. It doesn't matter if it is (D) or (R) or whatever. If you excuse the excesses of government because of some limited good it might do (debatable) then you're just evil disguised as a pragmatist.
Re:Tax planning and rich people (Score:4, Insightful)
While the rich "work", it's mainly having money work for them.
Even if everybody had the means to and greed to get a face job, tan, tailored suit and the right club memberships, and enough money to invest after that, society would fall apart if everybody were investors and canape pushers, and no-one were workers. Reward skill, not greed.
Re:Cap Gains vs. Income (Score:2, Insightful)
This is the most reasonable solution I've seen so far. It should actually be something more like this, though:
The first $250k of capital gains is taxed at 15%; any capital gains over and above $250k is taxed at ordinary income rates.
No, in that case what happens is the wealthy move their citizenship to a country that has lower marginal tax rates - so instead of the US government getting income from taxes, that other country does. So yes, they still invest, but the net result is that the US government doesn't ANYTHING. Remember, there are no barriers to the ultra-wealthy moving around.
Re:Yeah, class warfare. That's right. (Score:4, Insightful)
Funny how class warfare is such a one way street to the right. For some reason it's never class warfare when "job creators" lobby federal and state officials to end all the ground gained by organized labor since the industrial revolution.
Grover Norquist (Score:5, Insightful)
This bill is dead on arrival that the House, which is Republican controlled. Too many there have signed Grover Norquist's pledge to NEVER raise any taxes of any kind.
I'm sorry to say this, but the radicals are now in control. Just like the Taliban, they have an extreme ideology and will not compromise or make "common sense" decisions because they carry a radical philosophy.
As such, there is no longer any 'bargaining" going on. The bill will be flat out struck down or filibustered into oblivion. I'm not sure if you've noticed, but our Congress has passed almost no legislation of any kind since taking office 18 months ago. All they've done is argue.
This is the Congress that campaigned on a platform of "jobs", came in and immediately wasted two days reading the Constitution, then tried to repeal Obamacare and abortion rights, and since then, hasn't done anything except destroy the nation's credit rating.
Good luck getting this through.
Re:Tax planning and rich people (Score:5, Insightful)
Re:Honest Question (Score:2, Insightful)
It's more insidious than that.
Middle class and lower have to spend 75% or more of their income for basic survival. rent/mortgage payment, utilities, food, taxes... no car payment because they cant afford anything but a dangerous wreck.
While the rich can do a one time purchase and avoid paying rent/mortgage, electric is significantly reduced as they can afford to buy a $25,000 solar+wind system, well for water, etc...
If someone made $22,000 a year had 1 wife and 1 child they could easily survive on that if they did not have to drop $12,000 of it into rent alone with another $2500 in heating and electric and $5200 in food assuming spending a very low $100.00 a week for groceries. this does not count gasoline and expenses for working. Gasoline alone for someone that owns a worn out 1993 subcompact that get's 35mpg is $2080 if you buy 10 gallons a week.
Suddenly that person CANT MAKE IT. They are spending more than they take in without accounting for taxes alone. they are not buying movies, or cable TV.
The above numbers are real numbers.
The rich in the country are greedy idiots with their heads in the sand. EIC is desperately needed for the above family of which there are a huge number of. Some of the rednecks blow it on beer and a big screen tv, some on spinner rims for their hoopdie... but most of them spend it to do silly things like... Dental care for the kid who has 2 rotten teeth that need root canals because the free school lunches are 60% sugar, a set of tires for the car and replace the brakes that have not worked for 3 months,. Just those 3 can wipe out a $5500 tax refund check.
The non earners spend every single dollar they get because they have to. they do not have an option to save anything at all. Mostly because the Rich that hold the rental homes gladly rape people with ridiculous rents like $1000.00 a month for a 2 bedroom in a neighborhood that is mostly safe.
Re:Tax planning and rich people (Score:5, Insightful)
Re:Tax planning and rich people (Score:1, Insightful)
Only true if you did not in any form, directly or indirectly, benefit from society. Say, by ever buying anything
You paid taxes on the purchases...
... tied in with that work and its value are layers upon layers of additional worth...
Each layer of which is taxed....
Society is not robbing you - even if you paid 90%, you would still be getting a bargain, compared to how you much you and your time is worth sans society.
I'm a business owner in the equine industry. I work on my business 7 days a week, sometimes topping 15 hours a day. My business employs multiple people, and what I purchase in support of my business supports untold more workers in other businesses.
...
... or... or... or...
So you want me to work as much as 100hours a week, and give 90% of what I make to government so that they can support others and then tell me what a bargain I'M getting? Are you out of your mind?
I get taxed when I buy materials to build a shop.
I get taxed on the goods I purchase to sell in the shop.
I get taxed when I open the shop.
I get taxed on the pay I give to my employees.
I get taxed on the goods I sell to others.
I get taxed on the heat in the shop.
I get taxed on the water I use in the shop.
I get taxed on the power consumed by the shop.
I get taxed on the property the shop sits on.
I get taxed by the school district in the county the shop is in.
I get taxed on the hay I grow.
I get taxed on the suppliments that I feed the horses.
I get taxed on the fee for delivery of the hay I bought.
I get taxed on the hay I buy to make up the difference in what I cant grow on my own.
I get taxed on the building I constructed to store the hay in.
I get taxed on the materials to build the hay barn.
I get taxed on the vet bills for the horses.
I get taxed on the services of the farrier.
I get taxed when I charge someone to board their horse.
I get taxed when I charge someone to train their horse.
I get taxed when I charge someone to transport their horse.
I get taxed on the work vehicles I purchase.
I get taxed on the fuel for my business vehicles (tractors, trucks, trailors).
I get taxed on the old vehicles I sell to replace.
And THEN I get taxed on what I take for myself out of MY business.
And I get taxed to buy my house.
And I get taxed to STAY in my house.
And taxed to buy food.
And taxed to buy fuel.
And taxed to buy clothes.
And taxed to send my kids to school.
And taxed to go to a movie, or to dinner, or to a ball game, or to a play, or
The more money I make, the more I put back into SOCIETY. Not only am I consuming more luxuries, which employ people, I am also taxed on ALL OF IT.
I can tell you right now that if I'm told I will be paying 90% of what I make will be taken in the form of taxes, there's no fucking point in me spending 100+ hours a week earning that money. I will lay off my employess, cut all my business contracts, close my doors, and I will go to work for someone else stupid enough to bust their asses every damn day and get almost nothing for it. I'll let someone else invest their life into their business to get very little back. All the taxes that I pay will dry up and be reduced down to the lowest common denominator you seem hell bent on getting everyone in line for. Either you're malicious or completely dillusional. Dear God I hope it's the latter...
Re:Honest Question (Score:5, Insightful)
How about a tax scale that accounts for the current unemployment rate? Higher unemployment = higher taxes for corporations and rich, lower unemployment is lower taxes for corporations and the rich. Hell of an incentive to create jobs.
Re:Cap Gains vs. Income (Score:4, Insightful)
Re:Tax planning and rich people (Score:2, Insightful)
Odd. My government has an (in percent of the GDP) much bigger spending amount on social, teaching, public transport and so on, and yet we make ends meet (well, mostly, at least better than the US does).
Maaaaybe one of the reasons is that we don't spend half our GDP on military.
Well, you don't have to, when the US and their allies have your back.
Re:Tax planning and rich people (Score:2, Insightful)
There are other countries with larger public sectors. They obviously have higher tax rates to fund it.
True, but living in North Korea sucks, unless you're one of the elites. That's where this ultimately will lead. The only real policy battles taking place these days among the politicians and the corporate executives is over their position in the ruling class, and making sure their kids are part of the global leadership in the NWO.
Oh, and don't forget - right now, America puts virtually the entire tax burden on the upper middle classes, and the rest on the middle class. About 1/2 the population doesn't pay any taxes at all, and a significant portion of them have a net gain from the tax system. The US right now has THE MOST progressive tax system in the world.
Note the segment where the unemployment is all concentrated - right in the middle class. Low-wage and just above (service and labor jobs) are plentiful, very low unemployment there. If you have a Masters degree or a decent college degree and professional experience, you're likely to have an easy time getting work. It's the middle class that's going away. Many of those jobs are gone forever.
Re:Total Lack of Cognitive Dissonance (Score:1, Insightful)
And the issue is that the spending cuts are always 'down the road' and their is no effective mechanism for the current Congress to force a future Congress to make the promised cuts. Tax hikes on the other hand, are not used for deficit or debt reduction, but on immediate new spending. Thus, any new taxes should be opposed on the basis that they don't represent real fiscal discipline - the only way to control spending is the starve the beast.
What?? (Score:4, Insightful)
GOP Rep. Paul Ryan of Wisconsin said, "Class warfare may make for really good politics but it makes for rotten economics."
The GOP has been waging a class war on the middle class for over a decade and guess what, the middle class lost. Since 2000 the median income level has been dropping, while the top 1% of income earners has seen a 20% increase. The shift of income from the middle class to the most wealthy has already taken place. Now the GOP wants to assure the top earners do not lose what they stole from the middle class. It is the height of unmitigated gall for Rep. Ryan to use the "class warfare" meme.
Re:Tax planning and rich people (Score:4, Insightful)
The amount of waste in our goverment both through pet projects and inefficiency is unbelievable, and our entitlements are completely off the scale. Our grandparents saved money for retirement. That concept is completely foreign to the vast majority of Americans, and in fact they are looked at with skepticism by creditors and the IRS if they arent heavily in debt. Now those people who have nothing but dedt are looking to the government to secure their retirements, and you want the people who are actually good and making and keeping money to be the cure. It's pathetic.
Re:Tax planning and rich people (Score:5, Insightful)
"The US right now has THE MOST progressive tax system in the world"
The extra caps doesn't make this statement any less ridiculously false.
Re:Tax planning and rich people (Score:1, Insightful)
Of course they have to contribute.
But I challenge you to come up with any sane argument that anyone should pay more to the government than anybody else. Everything should be $ for $ equal. Warren Buffet doesn't enjoy any more benefits as a billionaire from the government than I do - probably a lot less. This is true at every level - federal, state, county, and city. Is the local fire department more likely to come to his house to handle a fire than any where else? Are the police in Omaha more likely to have to call on his property? Does the military of the U.S. have to work harder to defend his family than mine? No. Everyone should be billed for government services at the exact same amount.
The biggest problem the country faces is that too many have no cost of government (or worse). At the federal level, they are the majority. We won't change the federal government and start to shrink it as long as it doesn't matter to the majority how much Congress spends. When they start having to pay for their share of government, Congress will stop spending so much. I know that there are federal bills that everybody pays - even if you don't have a tax burden but they are for specific programs that you will - maybe - get something back from some day. This article is about taxes.
And before citing all the companies people like Mr. Buffet own, remember that they each have a large number of employees that receive the same benefit he does from the federal government's activities with them. All business taxes should be abolished anyway as the companies just raise their prices to cover them or go broke.
Should the wealthy contribute to society? Yes. And through history they have. Locally, there are many rich people who have donated money to help the college and town build and expand. The U.S. library system we have was massively aided by donations by one wealthy individual. You could make a really good argument that the Bible suggests everyone contribute to help the needy. But there is no reason it should funnel through a massive federal bureaucracy to accomplish this. If the particular wealthy person doesn't want to - so be it. Wealth redistribution to fit the style of the current poobahs in office (of whatever political persuasion) is just wrong.
Re:Tax planning and rich people (Score:4, Insightful)
No. The idea that he's lying when he tells us his tax rate is just another falsehood that Fox News throws out there because their audience tends not to understand their own taxes, much less his. The tax on dividends and capital gains is far less than half what tax on regular income is. The rich play games to get essentially all of their income classified as capital gains. It's not like the burger flippers at Mcdonalds are allowed to work for the option to buy a share an hour at $8 below the market price.
Fox News, and CNBC, and Fox Business will tell you that the capital gains tax rate should be zero. And the inheritance tax, too. That's because they don't want to be taxed at all.
Re:Honest Question (Score:5, Insightful)
Inflation may change all that very soon. Bernanke is dumping dollars on the market like there's no tomorrow...
Then why aren't either short or long term interest rates soaring? If there were even a sniff of inflation in the air, the interest rates should be going through the roof. Sadly, models and facts have this odd way of contradicting your morality-based economics.
Re:Honest Question (Score:5, Insightful)
1. Stay in school and at least get a H.S. degree.
2. DON'T have kids if you can't afford them. The cause of pregnancy is well known.
3. DON'T blame your problems on others.
And don't give me any crap about "disadvantages". See Herman Cain.
Your life is what you make of it.
Re:Tax planning and rich people (Score:4, Insightful)
While we're at it, why don't we eliminate the EPA and the minimum wage?
Government exists to cater to its citizens, not to corporations. Corporations can feel free to GTFO and make room for someone else who won't require us to race to the bottom with regards to our standard of living, environmental regulations and so forth.
Re:Tax planning and rich people (Score:4, Insightful)
Well, that's the short version. The long version is: Buffet is right, but his remarks are being misconstrued by nearly everybody. Deliberately so, by the politicians.
The rich have higher income tax rates than the poor. This is absolutely the case. If you're arguing that the tax rates should be increased on the rich because you think they're less than the poor, you're simply misinformed.
Now, there are other types of taxes. Estate taxes, tariffs, capital gains taxes. Those are charged at different rates. Capital gains are charged at a rate ranging from 0 to 15%, Note that rich people pay a higher rate on gains than poor people, also. However, if a person makes 90% of his income from capital gains, and you average together the different types of taxes he pays, the overall tax burden on the rich guy might be lower.
This is deliberate. Capital gains taxes are low on purpose, because those drive investment. However, if the situation is unacceptable, the solution is not to adjust the base rates, the solution would be to raise the capital gains taxes. I don't believe Obama's plan does this; instead, it's using Buffet's statement as a marketing point for other tax increases.
Re:Cap Gains vs. Income (Score:5, Insightful)
That's only true for capital gains from dividends. Capital gains from changes in the share price are only taxed at 15%.
For this reason many companies do not make a profit. Instead they spend the money on either capital items or investments and pay $0 tax. These uses of the money increase the assets of the company, which is then reflected by a corresponding (sometimes even amplified) increase in the share price. If a stockholder then sells enough stock to make up the difference in price, they effectively pay themselves dividends at a total tax rate of 15%.
Personally, I think the best way to solve this is to make dividends a before-profit outlay for corporations, and then make all capital gains count as income. Of course, good luck getting something like that implemented...
Re:Total Lack of Cognitive Dissonance (Score:5, Insightful)
Re:Honest Question (Score:2, Insightful)
This is so fucking ignorant I don't know where to begin.
People that bring home more than $250k probably don't put money into the stock market or anything to allow new businesses to be formed. They probably don't directly fund startups that create jobs.
People that make $250k or more do *not* hoard it, or spend tons on trips overseas and fancy foreign vehicles in my experience. I run a software development shop and I've seen those people join together to provide funding to help a startup form. They do this in the hope that they can make more money later, and leave a legacy for their children. They do this at great risk (most startups fail). If you curtail the possible reward, they will *absolutely* do less of this - there's more guaranteed benefit from hoarding their money than there is from reinvesting it at that point.
I can't get on the internets without getting furious at people these days. I worked my ass off (far greater than 80 hour weeks much of the time) to get where I am today, which is only just barely getting close to your magical rich man line, from making $18k/year or so at the beginning of my career. I now employ 14 people that make on average $60k/year. If I had known that people that make $250k/year would be bad mouthed by the time I got here I wouldn't have fucking done it, and those 14 people would be without a job (or at least without as good of a job as I provide them). My services wouldn't have helped some 70 people start the businesses they wanted to start.
A market is a complex beast. People need to stop acting like they can control it. A family of 4 earning $1M EARNED A FUCKING MILLION DOLLARS THAT YEAR and there's no reason they should have $750k of it taken from them just because they did well. You're encouraging people to not try to do that well. Don't you understand that? If the nation continues down this path then earners WILL take their businesses elsewhere, and you'll be left with a bunch of people dependent on government, and no one to tax.
Fucking hippies. :)
Re:Woah, TIMEOUT! (Score:1, Insightful)
Is it a slow news day? There's nothing at all happening in the world of science or technology that would be more important to the average nerd than this? What about every other bill the President has proposed? I haven't seen those on slash dot
Mod parent up. This is just tax policy news. There's no gadget, there's no advanced math - it's pure politics. This isn't news for nerds, this is news that applies to the general public and in no way applies specifically to nerds.
I'm sorry your crippling autism prevents you from being interested in anything that doesn't explicitly involve shiny gadgetry. Could I make a suggestion? If you don't find an article interesting DON'T READ THE ARTICLE.
Class warfare? (Score:5, Insightful)
I still think the ol' U S of A is the greatest country in the world, and I feel fortunate to have been born here and be doing alright, but I recognize that a lot of things are broken. People here enjoy a lot of freedom, but if we are as civilized as we claim, don't you think we can still do better? If you make a million dollars a year, you should be doing just fine, and you can afford to pay a little bit more to fix America. Stop whining, since with all your tax breaks and loopholes you don't truly pay a higher rate than those of us who only "earn" $30,000 or $60,000. You will need a strong middle class in the future or it won't be long before our nation's time as the world superpower comes to a close, which will be bad for all of us. If we maintain the status quo, with the rich getting richer, the poor staying poor, and the middle class vanishing, your wealth will evaporate in time, floating away overseas, or we'll rise up and take it from you. Rich people have a chance to fix things now before it is too late, if they are not so greedy as to insist on hoarding every last nickel now. The status quo is class warfare, and prolonged class warfare is our road to doom.
Vote for me. I'll work to keep wealthy people wealthy, by convincing them to invest in our future, which will also benefit all in our society. You can keep the power, if you choose to, but you can't have all of everything.
Re:Tax planning and rich people (Score:5, Insightful)
"What would have happened if you got a major illness during this time?"
I had a lesion on my larynx. LA County picked up the tab.
"Or your parents did and you had to drop out of college to support the family?"
Father died when I was 17. I didn't go to college right away to help my mother pay the mortgage. I did that for 4 years.
What I *DIDNT* do was blow off high school, get someone pregnant or get involved with drugs/alcohol. I also didn't pick a major with virtually no chance of an economic payout. (Well, I did at first... Philosophy -- but switched that when I realized that I'd most likely be unable to repay any loans I would assume).
What's silly is someone with a degree in 16th century literature and a $100,000-$200,000 debt is upset that they cant find a job that will help pay their student loans... Sounds to me that they would have been better off picking a different major/career path. A little "expected income" research when planning a major would have helped.
Re:Small business (Score:4, Insightful)
Hoarding (Score:3, Insightful)
People seem to think that people who are "rich" must be swimming around in their money bins like Scrooge McDuck. They don't seem to realize that if they don't invest that money, its value decreases.
That is probably why they don't have the understanding of how to build wealth themselves.
Re:Honest Question (Score:5, Insightful)
Re:Tax planning and rich people (Score:5, Insightful)
You had some resources, clearly, to fall back on when you failed. You may diminish them or deny them here, to defend your ideology. But whenever one pokes at these Horatio Alger stories, one finds a network of social capital behind it: family members, spouses, friends, couches, investors taking irrational leaps of faith, etc.
And most importantly, you have the infrastructure of an entire society which makes the kind of business you have possible. You have an educated populace that can read; you have basic public health and transportation infrastructure; you have an economic system that produces money, protects investments, and so on. Without these things, you would be lucky to make it as a subsistence farmer. You are just so accustomed to the things that make your business possible - and will cover your ass if it fails (inc. limited liability) - that you take them as if they were part of the natural order.
Good Grief. (Score:2, Insightful)
This idiot cannot get rid of his hard-on for more and more taxes. After whacking in the trillion and a half for Obamacare, now he wants another 2 trillion on top of that - and then he wonders why businesses are scared to expand?
Oh - and let me get this straight - the Democrats are going to "save Medicare" - which is already drastically underpaying doctors more than any other insurance - by taking more money out of it? That will save it for Seniors? And this $247 billion more in addition to the half trillion he has already hacked out of it for Obamacare? That's how the Democrats are going to save us from the Evil Republicans? This is what we need saving from!
"We had to destroy the village in order to save it!"
Laffer must be laughing in his grave watching Keynes spin in the next plot over.