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Thanks to Warren Buffet, we all now know that the ultra-rich are excluded from paying the same tax rate as regular humans, such as you and I. This is not only not-fair; it is not the intention of the tax code. Even President Obama paid just 20%, not the 35% upper rate this year. How did he do that when most of us with less income are paying a rate in the thirties? If he were a regular human, such as you or I, he would have paid over 30%. His low rate is not fair. Buffet’s low rate is not fair. The rich should, at a minimum pay the same rate as the poor, and in a progressive system if that is the right system, their rate should be higher than the rate of tax paid by the poor. This is not class warfare. On this and only this matter, President Obama and I agree.
Before I move this further along, I would like to point out that Governor Romney is in favor of a $200,000 deduction and then everybody pays a normal rate on capital gains. Some think this will hurt Romney. I know that it will not. ROmney already gives 10 of his earnings to his faith. In his last tax return he gave 29% to charity over and above his faith contribution. Then, he paid 13% federal tax on the rest. Add it up, and you get a lot of money that the Governor, a fine man by all standards either gave up completely to charity or after all deductions, 13% to the government. Who do you know who gives that much to somebody else regardless of his tax rate. I praise ROmney that his government charity (tax) rate is as high as 13% after he gives 39% away.
The types of earnings the rich make are predominantly items other than wages. Republicans claim and I disagree with the premise that if the rich paid a rate as high as the middle class pays, the economy would collapse. That is why I am a conservative and not a Republican. Conservatives are for what is right and good. Republicans are mostly conservative other than in matters of the wallet. So that we conservatives can prevail in the fall, I humbly ask Republicans to “stop the greed,” please!
Smart people can figure out a plan in which the rich do pay the same tax rate on these earnings above $200,000 as the general population, regardless of the source of the earnings. Mitt Romney’s number is $200,000 while Warren Buffet’s number is about $5 million. Buffet’s point is that the ultra rich should pay a tax rate at least as high as the guys down the street from you—not the lower rate as the guys down the street from him.
Like many of you, it first bugged me that Buffet was advocating a tax the rich philosophy simply because they can pay more. I know that the rich pay most of the taxes in this country and I thank them deeply for that. I first said “Let Warren Buffet donate to the federal government if he feels that way rather than give to the Bill and Malinda Gates’ Foundation.” NJ Governor Chris Christie was a little crasser: “Cut a check and shut up, that’s what I say, okay?” Christie said: I’m tired of hearing about it. He wants to pay more taxes, pay more.” After checking it out, I no longer agree with Christie. I think Buffet should never pay a percentage point less than his secretary if he makes 500 times more than she makes.
I hope Republicans who carry the conservative flag each election will get out of their greed shtick and declare themselves wrong on the Buffet Rule. The Republicans are wrong on this and it will hurt them as more people learn about the very few who benefit from this rule. The people will ask, “why?” and there will be no good Republican answer because it is inexcusable. Jackie Gleason would say, “Humma, Humma, Humma,” and when the Republicans are confronted on why all Warren Buffets should pay a lower rate than grandma, who is getting pushed off the cliff, they will fire off their own “Humma, Humma, Humma.” There are no words to explain this disparity in terms that do not make conservatives look bad. Take the loss now.
I want the Republicans to win the next election and help get the country straightened out. I fear they can blow the election if every time a reasonable thought comes out of Obama, under any circumstances; they choose to slam it down. By shutting the door on what reasonable people think, the Republicans risk becoming the very caricatures the Democrats are painting of them. They will seem less and less trustworthy. Render to Obama that which is Obama’s. Don’t give the people on the fence any reason to think that the Republicans are goofs, and that perhaps Obama actually is a god.
By research and analysis I have gained a new perspective on the so-called Buffet Rule. Something similar to the Buffet rule would be good for fairness in our tax system. It helps Conservatives to swallow this notion better if we remember that Buffet suggested it and not Obama. All Obama did was say he liked it, and now he wants to make it the law. Give this one to him graciously! It is not about revenue. It is about fairness.
Not too many of my friends would be negatively affected by the rule as Buffett suggests it would affect only the ultra rich. The Romney rule would make the threshold even lower at $200,000 so how in this instance is Obama all wet? Romney is looking to do something with Capital Gains that is even more aggressive than Obama.
Surely nobody earning multiple millions of dollars per year on their investments should be shielded from paying the same tax rate as a person making less than a hundred thousand, simply because their earnings come from a different source. I hope nominee Romney puts his notion in better perspective because I hate it when Obama finds a battle that is easy to win and Republicans dig in. I am for the Obama side of just this one stinking argument. Somebody smart has to help the Republicans and the rest of us on this argument. Take this issue away, please. It is not a winner for conservatives.
Let’s look at some numbers. Suppose you won the lottery and received $2,000,000.00 one time payout. We will use 35% as the highest tax rate on all income, though it would be somewhat less because of the brackets and exemptions. Not providing for any deductions, you, Mr. or Mrs. Lottery Winner, who get $2,000,000 just this one time, will pay $700,000 in Federal Income Tax plus all of the other taxes–city, state, etc. You will get this windfall just once in your life.
Warren Buffet will get a lot more than this each year. In fact, on his huge investments, Buffet wins the equivalent of a lot of your-sized lotteries each year. Buffet will pay just the Capital Gains Tax, a device which encourages investment. If he made just $2 million, his numbers would be $300,000 in taxes on his income from investments. This is $400,000 less than you will pay. Buffet then gets to buy $400,000 more in investments to help him get more earnings on what should have been paid as a tax. So, is that fair? Of course it is not, regardless of how Buffet earns his money. Why on the same amount of money should you pay more tax? That is the whole point. It is about fairness and it is the first thing I think that Obama and I agree on. Anybody who realizes this and sees the Republicans on the other side of the issue will believe the Democrats on Medicare and Social Security and God-forbid, Obamacare. Give it up Republicans! It is a bad argument.
I am not getting soft on conservatism that is good for America, but I am not for pure greed. I do not trust Obama as far as I can throw him. He latched on to this Buffet thing because he is finally right. He has a great argument about fairness and he is on the correct side. I was so concerned that in my first look at this when I saw that Obama was right; I checked a number of facts to see what the really rich thought and what the real skinny was about this on the Internet! The Republicans are so wrong, this can be all Obama needs to win if they make a big deal out of it.
I would recommend that as soon as possible, the Congress adjusts the Capital Gains rate as a preemptive strike now that the Buffet Rule has been stricken down. Otherwise, Obama will play the press like a harp from now until November, and the rest of us who are paying attention will not be able to accept or defend the Republican position on the Buffet rule. Bringing Capital Gains to the same level as the ordinary income tax rate (35%) above a certain income level for a start, is a far better deal than the Obama-endorsed Buffet Rule’s rate of 30. If nothing is done, the Republicans will have given a big advantage to the Democrats.
Buffett actually did not like the original Buffet Rule but that did not matter to Obama. The President cannot figure out why he wants the Buffet rule so he keeps trying different reasons for political effect. He has tried class warfare, growth, saving the middle class, success, deficit reduction, and now he is back to fairness. He actually tried to call it the Reagan Rule so Buffet had no say. President Reagan surely could not complain. That is the tricky-trocky Obama I know. He doesn’t even know how to play a winning hand.
Buffet offered his counter to the Obama notion. He said that the Buffet tax should be just on multi-millionaires. Buffet said that he advocated a tax hike only on what he termed the “ultra-rich,” making a distinction between his suggestion and Obama’s proposal to raise taxes on simple millionaires, including recent lottery winners. “It isn’t [my idea] to have the rich pay more taxes. It’s to have the ultra-rich pay more,” Buffet recently offered.
MSNBC is something I can sometimes stomach in the morning but I stay away from it in the evening like the Bird Flu. I try to avoid the likes of Rachel Maddow, Ed Schultz, and Lawrence O’Donnell, three of the most miserable talks show hosts in America. So, I do not necessarily give MSNBC any credit when I see their shows live or read about them. But occasionally, I sneak a peek.
On April 15, 2012, Chris Hayes from MSNBC had a lively discussion of the Buffet Rule and he received some interesting comments. For example, a guy named Tom Perriello, who was identified as a former Democratic Representative, offered this surprisingly worthwhile insight: “I think this is scaring the bejeezus out of the conservatives. It’s deeply rooted in the American psyche and it’s almost as strong among conservatives in my district as it is among liberals. They don’t like the idea that the system is rigged.”
I think that quote sums up the feelings of conservatives such as myself who cannot be real Republicans by bank account definitions. My definition of a real Republican is a a person with at least $50,000,000 in the bank, and even these guys are pushing the lower limits of acceptability. The two thousand to ten thousand real Republicans that would be left in the US if we took the conservatives out of the Party would not be able to win an election ever.
I do not hate the rich. Without the rich, I never would have been able to go to college and I never would have been able to join the middle class. The rich, by their beneficence, helped many of us become something when otherwise there would have been no hope. I do not begrudge the rich their due but the notion that paying less than half the tax rate on their typical income sources compared to the worker bees in this country is way off base. This system is rigged. If others were to receive the largesse the government gives the Capital Gains Class, perhaps they would not need to gain from the beneficence of the rich as their tax rates would be a bit lower, and perhaps their wages would be a pittance higher.
Regular conservatives, who are not rich by any means, get lulled into the conservative mantra of the Republican Party because the Democrats have become the “off-the-wall” Party. As a Conservative Democrat, I see the Democrats of today as a bunch of loons. So, when I see the Republicans grabbing at a few pennies from taxes they should be paying, it makes me feel hopeless. But, then I remember I am not a Republican. I am a TEA Party Conservative.
Conservatives who are of the Republican Party are quickly separated from Republicans when there is money on the table. Something like the Buffet Rule may not be good for my definition of Republicans but it is good for Conservatives and all Americans to the extent that it corrects an equity problem in the tax rates. That ought to be enough to gain Republican support. It is disingenuous for Republicans to fight something that will add equity to the system simply because such equity may cost them a few million a year for doing so.
Nobody wants a system that is rigged. If Republicans really want to get elected this next time; they need to remember that. So far as it looks, the tax code has been manipulated so that the already well-off become better off by paying a regressive tax rate on their capital earnings, or earnings that are categorized improperly as such. My fear again is that the Conservatives will be identified with a problem that is not ours. Republicans will be discovered by John Q. Public as hypocritical and greedy and that is the type of story that would play well in Barack Obama’s hands.
The Wall Street Journal tested the notion of a “Buffet Rule” in a survey of those with net worth over $5 million and I think they were surprised with their results. Fully 61% of those with net worth of $5 million or more support a Buffet-like tax on $million-plus earners. WSJ Analysts also checked out the effect on investment and jobs—they say no problem. It is a losing argument, for Republicans to dig in and look like jerks.
Stephen Gandel, who also writes for Money and Time, in a WSJ article said that “the past decade and a half shows that Capital Gains rates in themselves don’t change investment much. And as a result, raising the rate on the super rich is unlikely to cause investment to fall, or kill jobs.”
Jeanne Sahadi at CNNMoney suggests that: “It is unlikely that the wealthiest investors will pack up their marbles and go home if Congress raises the Capital Gains rate.”
As noted above, Romney’s bogey is $200,000 for the cutoff for when the “Buffet tax” should apply. His rationale is to assure that all Americans can help the country by investing. The whole idea of whether a Capital Gains reduction is good for America is in need of a re-examination, as it is for sure that the higher stakes players have tipped the game in their favor.
Economists mostly consider the rich in their macro decisions since, when they engage; things really happen. Many of us are not sure of the cause and effect relationship that requires that a 15% tax on the earnings of the rich-only is required for companies to be able to have enough investments to prosper. That saves the higher earners as much as 20% of their earnings. I suspect that the 15% tax is a product of some fine long-term lobbying, so it should be completely re-checked and undone completely if not needed. It sure looks to me like it is time for the Capital Gains tax at least above the $200,000 income threshold be eliminated as Romney suggests. Then, there is no need for a Buffet Rule.
Romney suggests that a $200,000 minimum shelter is OK. Maybe $500,000 is a better number. Obama says the number should be $1,000,000 and the tax should be 30% instead of 35%. Buffet says it should be just the ultra-rich with perhaps $5,000,000 in earnings per year. Buffet thinks just these few are the only ones who should pay so even he would not agree with my number or Romney’s or Obama’s. Maybe there is no reason to give anybody a break. Maybe we have all blindly accepted this contrived need for too long.
I am more inclined to think the latter. The more I think about it; so far Republicans are on the wrong side of this debate. It is about Americana against a few special people who are being treated in a special way simply because of the type of earnings they make. Until Warren Buffet brought out this disparity, I had assumed the tax system was fair and that the rich not only pay higher taxes, but they also pay at a higher, not lower rate. Knowing this is not the case gives me pause for thought.
Most Americans make small potatoes in comparison to Warren Buffet. Most of us regular people, for years regardless of party affiliation, have agreed with the notion that Capital Gains should be taxed at a lower amount since we have had that drilled into us from ECON 101. Moreover, every major economist and major business person we have ever heard speak on the issue has offered the reasons why it is good for business.
I know that I always believed that the Capital Gains reduced rate was right and fair, and once in awhile, such as when I sold a little stock, I felt that even I was helped by the rule. Most regular people are like you and I, however, and most of us cannot amass huge capital gains for a living at a multi-multi-million dollar level. So, when I now think about what Buffet said, maybe those with huge earnings from whatever source should not be taxed at a lower rate than those who labor every day to eke out a living. So, upon deep reflection and examination, I now think that the Capital Gains rate is not so fair after all.
I would suspect that few to none of most Americans had any idea about the implications of this until Mr. Buffet brought it to our attention. Those who engage in major investing, whether it is in the stock market or other financial instruments, are the only real beneficiaries of the lower tax rate. Yes, it would help businesses but at what cost. If the poor made voluntary direct payments to businesses, this too would help businesses. However, forcing the poor to make direct payments to businesses or individuals is certainly not fair. That is what the Capital Gains tax rate does to the tax code right now.
Most of us, who go to work regularly, check in every day at our personal “salt mine” every day. We endure unpleasant bosses and unpleasant working conditions, whether in blue or white collar scenarios. Based on our trust in the tax system, we expect that our tax rate will be the same or lower than those with higher earnings. Just because those with higher earnings do not earn their living in the “salt mines” of life is no reason for them to get a huge tax break.
Whereas Chris Christie mockingly suggests Warren Buffet should write a check to the government if he thinks the system is unfair to the less fortunate, I would suggest that Chris Christie and all those that think the system of paying huge bonuses from the tax system to the most fortunate is fair, go ahead and you write a whole lot of checks to those of us who work in the “salt mines” of life. Governor Christie, see if you and your friends who think as you do, can make up for the extra tax the less fortunate pay so that the high wage earners can keep more and more of their income.
If we have a graduated tax rate by law, so be it. It must be graduated. We should live by it and not give one group of people preferential treatment because of how they earn their money. Consequently, at the highest bracket, the higher earners should be paying more taxes. How can anybody justify that they are not doing this now?
Most of those taxpayers (61%) at the Buffet level and on down to those who are simply ultra-rich, as Buffet calls them, who benefit from the substantially huge difference in tax rates, are substantially more compassionate than Governor Christie. All things should be in moderation. Maybe there is no need at all to have a reduced rate for Capital Gains. Maybe there never was. Maybe it was always a gimmick to permit those with higher earnings to keep more and for those with low earnings to pay more, without anybody really knowing it was happening.
As a conservative who hates the liberal spending going on in this Administration, I am concerned that if this gives Obama a dime extra to spend, it will be a bad change. SO, I would hope this change can be made and Obama cannot find a few more SOlyndra’s out there so some corrupt cronies can gain some cash.
The ordinary tax rate today is not that high to begin with compared to the 91% rates of the early Kennedy years. Kennedy reduced the top rate to 70% and now it is just 35%. Maybe the high wage earners are merely getting the Capital Gains break because their friends in Congress decided they would be able to get reelected easier with the break in place. I think it says something good about the ultra rich in that over 61% of them are complaining like Buffet that the system is unfair to the “salt mine” workers. I say “Bravo” to them. I would like to hear a big “Bravo,” from Republicans so we can get this issue off of the Obama side.
Republicans who suggest that the investment wage earner should pay a lower tax rate know this results in a clearly unfair situation. It is grossly unfair. Obama is right. My buddy Dennis Grimes says that even a blind squirrel finds an acorn every now and then. As a conservative, having to trust Republicans to captain my ship, I worry that this is Obama’s blind squirrel gift. I would suggest that Republicans give this acorn up. Obama, blind squirrel though he may be is right on the money for once. Don’t let him get elected President again just because he found an acorn.
When those in the investment business or those who have made their business include investments, choose to declare their income as Capital Gains, they do so simply to reduce their tax burden. At a gross level, this is unfair to John Q. Public and anybody else who pays the going rate, which is more than twice the investment rate. I do not think that I ever really understood this big problem in the tax code until Mr. Buffet brought it to my attention.
The message to our conservative leaders is to simplify the code and make sure that those whose job it is to play around with stocks and bonds are taxed just as evenly as those who play around with slot machines, crap tables, roulette wheels, Powerball lotteries, and the like. I see no difference. Don’t try to kid me that those who go to the Wall Street Wheel are thinking about America and thus should be spared taxation. And, of course, they should never pay a tax rate less than the bloke who actually does go to the “salt mine” every single day.
Buffet on Buffet
“If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.” Buffet does not think that is fair to the middle income or lower income people who pay taxes. I think he is right.