Obama intensifies push for ‘Buffett Rule’

[ComputerGeek25]

The lack of logic is blameing people for fleeing high crime and substandard schools-regardless of their race.

 

[stevegravy]

Where did they cut benefits? And since the Senate is controlled by Democarts h9w could the GOP have done anythung without Democrat support?

The top 25% of earners pay 87% of all federal income taxes. is that “Fair”

It is fair because Mr. Obama’s teleprompter says the 3.2 billion it raises in additional taxes will pay off the 2011 deficit in 400 years what is wrong with that?

 

[He_Man]

Many hard working folk in the private sector have gone years without raises and had benefits cut.

Yet you want to keep the status quo for goverment workers, who depend on tax revenues of the middle class in the private sector.

How is that “fair” as well?

Typically in the private sector, when profits are down (or nil), no raises are forthcoming.

As a contractor, my salary is tied to my hourly rate with the government. If the rate stays flat or goes down yearly, my salary stays flat or goes down yearly. I’m not sure why the expectation should be different for anyone.

 

[ComputerGeek25]

Typically in the private sector, when profits are down (or nil), no raises are forthcoming.

As a contractor, my salary is tied to my hourly rate with the government. If the rate stays flat or goes down yearly, my salary stays flat or goes down yearly. I’m not sure why the expectation should be different for anyone.

And profits drive taxable income

The mental gymnastics here are mind boggling.

 

[estesbob]

It is fair because Mr. Obama’s teleprompter says the 3.2 billion it raises in additional taxes will pay off the 2011 deficit in 400 years what is wrong with that?

It will generate more money for Govt employees to throw wild parties in Vegas or hire prostitutes in Colombia.

 

[LisaA]

I agree that our tax code seems to benefit those who have the better lobbiests, rather than encouraging sane economics. I was talking with a small business owner who is putting up a building on some commercial land he owns. If he were in agriculture, he could expense the whole building in the first year, because he is in another field he has to depreciate it. Who came up with such as silly tax law?

As a recovering CPA, I am questioning the statement about expensing a building. That has never been available to any industry. What can be expensed are “movable” assets for lack of a better term…machines, cars, furniture, computers etc.

You will find that much tax law relates to a social engineering goal rather than fairness or even raising revenue. Often the great ideas of Congress turn out to have unintended consequences. For example the “luxury tax” didn’t hurt rich people…they simply didn’t buy those luxury items and put those who worked on them, built them and sold them out of a job! Needless to say this is often the case and the reason that many are calling for the complete overhaul of the tax code rather than silly piecemeal legislation like the “Buffet rule.”

Lisa

 

[_Abyssinia]

Americans Making Over $50,000 a Year Paid 93.3 Percent of All Taxes in 2010

cnsnews.com/news/article/americans-making-over-50000-year-paid-933-percent-all-taxes-2010

 

[stinkcat_14]

As a recovering CPA, I am questioning the statement about expensing a building. That has never been available to any industry. What can be expensed are “movable” assets for lack of a better term…machines, cars, furniture, computers etc.

You will find that much tax law relates to a social engineering goal rather than fairness or even raising revenue. Often the great ideas of Congress turn out to have unintended consequences. For example the “luxury tax” didn’t hurt rich people…they simply didn’t buy those luxury items and put those who worked on them, built them and sold them out of a job! Needless to say this is often the case and the reason that many are calling for the complete overhaul of the tax code rather than silly piecemeal legislation like the “Buffet rule.”

Lisa

It looks like the full write off was limited to last year, but still a pretty stupid policy, since food production is one thing we don’t need to encourage, the market can handle it pretty much on its own.

farmcpatoday.com/2011/01/13/100-bonus-depreciation-no-income-limitation/

 

[estesbob]

As a recovering CPA, I am questioning the statement about expensing a building. That has never been available to any industry. What can be expensed are “movable” assets for lack of a better term…machines, cars, furniture, computers etc.

You will find that much tax law relates to a social engineering goal rather than fairness or even raising revenue. Often the great ideas of Congress turn out to have unintended consequences. For example the “luxury tax” didn’t hurt rich people…they simply didn’t buy those luxury items and put those who worked on them, built them and sold them out of a job! Needless to say this is often the case and the reason that many are calling for the complete overhaul of the tax code rather than silly piecemeal legislation like the “Buffet rule.”

Lisa

I am not aaware of being able to expense a whole building for agricultrual use. Perhaps he must be refering to section 179 expenses but those are pretty consistent across all industries, There are, however, many industry specific tax breaks-the Gross Domostic Production Credit being a good example-but you cant just start hacking off deducation or rasing taxes willly nilly without causing serious harm to the economy, Rasing taxes just to be “fair” is the worst possible reason one could have for doing so,

 

[LisaA]

It looks like the full write off was limited to last year, but still a pretty stupid policy, since food production is one thing we don’t need to encourage, the market can handle it pretty much on its own.

farmcpatoday.com/2011/01/13/100-bonus-depreciation-no-income-limitation/

The full expensing must have been a one time thing in 2011. Again I think picking winners and losers with tax law often has unintended consequences. Decisions are made based on tax law not on good business practices. One notable rule was those who got around the luxury car limitations by purchasing huge gas guzzling Hummers…in case you were wondering why all those doctors needed to drive around in the equivalent of an armored car…

Lisa

 

[ComputerGeek25]

As a recovering CPA, I am questioning the statement about expensing a building. That has never been available to any industry. What can be expensed are “movable” assets for lack of a better term…machines, cars, furniture, computers etc.

You will find that much tax law relates to a social engineering goal rather than fairness or even raising revenue. Often the great ideas of Congress turn out to have unintended consequences. For example the “luxury tax” didn’t hurt rich people…they simply didn’t buy those luxury items and put those who worked on them, built them and sold them out of a job! Needless to say this is often the case and the reason that many are calling for the complete overhaul of the tax code rather than silly piecemeal legislation like the “Buffet rule.”

Lisa

As I keep saying. The more you attack the “rich,” the more they’ll want to hide their money and/or not spend it. In that case, it will be good for no one…

 

[stinkcat_14]

As I keep saying. The more you attack the “rich,” the more they’ll want to hide their money and/or not spend it. In that case, it will be good for no one…

Are you saying that we should tolerate bad economic policy (such as the 100% expensing of farm buildings) because it might be perceived as “attacking the rich”?

 

[LisaA]

Are you saying that we should tolerate bad economic policy (such as the 100% expensing of farm buildings) because it might be perceived as “attacking the rich”?

I dont think the expensing rule for farm buildings was aimed at benefitting “the rich.” It may have been an ill advised policy but the theory presumably was to help struggling farmers expand operations and also put some construction workers back on the job.

One thing that needs to be understood is that we do not tax “the rich” nor do we tax wealth. We tax EARNINGS not assets. Everytime Obama talks about “tax breaks for millionaires and billionaires” my head explodes because we don’t tax what people have but what they make in a particular year. The small businessman who has an S corp or LLC might have high ordinary income one year and thus pay at the highest rate although he’s not necessarily a wealthy man. At the same time someone with very high inherited wealth living off muni (non taxable) bonds pays little or no tax.

I’ve become more and more a propoent of some kind of consumption tax but it will be a hard transition as our many business and investment decisions have been made based on our perverted and tortured system.

Lisa

 

[ComputerGeek25]

Are you saying that we should tolerate bad economic policy (such as the 100% expensing of farm buildings) because it might be perceived as “attacking the rich”?

I am saying do away with all loopholes, and simplify the rates and code.

The rich still pay the biggest part of the pie, loopholes and all.

 

[SamH]

When did any fed workers pay package get cut?

I would like to know more about this too. It certainly hasn’t happened in the last 50 years.

 

[stinkcat_14]

I dont think the expensing rule for farm buildings was aimed at benefitting “the rich.” It may have been an ill advised policy but the theory presumably was to help struggling farmers expand operations and also put some construction workers back on the job.

I think it is pretty clear that not many poor people benefit from this deduction. Whether or not the beneficiaries are “rich” is open to debate because nobody is willing to define what “rich” is. And of course, the government artificially props up the price of agricultural products, which means we have too much production in the first place, so the smart thing to do would be to allow these so called “struggling” farmers to seek work elsewhere. That is the way the market works.

One thing that needs to be understood is that we do not tax “the rich” nor do we tax wealth. We tax EARNINGS not assets. Everytime Obama talks about “tax breaks for millionaires and billionaires” my head explodes because we don’t tax what people have but what they make in a particular year. The small businessman who has an S corp or LLC might have high ordinary income one year and thus pay at the highest rate although he’s not necessarily a wealthy man. At the same time someone with very high inherited wealth living off muni (non taxable) bonds pays little or no tax.

I’ve become more and more a propoent of some kind of consumption tax but it will be a hard transition as our many business and investment decisions have been made based on our perverted and tortured system.

Lisa

Earnings and assets are at least somewhat correlated, so the connection is not terribly unreasonable. On the other hand, Warren Buffet’s company doesn’t pay dividends, he pays himself $100,000 per year in salary, and he is giving his stock away to pro-abortion causes, so much of his wealth will escape taxation.

I agree with you on the consumption tax, I think it would be clearly preferable. But it would be harder for special interest groups to affect it, so it will probably never see the light of day.

 

[LisaA]

I think it is pretty clear that not many poor people benefit from this deduction. Whether or not the beneficiaries are “rich” is open to debate because nobody is willing to define what “rich” is. And of course, the government artificially props up the price of agricultural products, which means we have too much production in the first place, so the smart thing to do would be to allow these so called “struggling” farmers to seek work elsewhere. That is the way the market works…

Well the poor don’t benefit from deductions…because they don’t pay taxes. So you’re right this wasn’t meant to help the poor. They aren’t even participating in the tax system.

Believe me I have no problem with getting government OUT of the agriculture industry. Would like to get rid of the entire Dept of Agriculture for that matter. What does it do that benefits our country?

Earnings and assets are at least somewhat correlated, so the connection is not terribly unreasonable. On the other hand, Warren Buffet’s company doesn’t pay dividends, he pays himself $100,000 per year in salary, and he is giving his stock away to pro-abortion causes, so much of his wealth will escape taxation.

I agree with you on the consumption tax, I think it would be clearly preferable. But it would be harder for special interest groups to affect it, so it will probably never see the light of day.

Agree that earnings and assets are somewhat correlated but Obama is being disingenuous at best, more likely lying with a straight face…one of his best skills along with reading the teleprompter phonetically…CORPSMAN anyone? But I digress. The reality is that wealthy people can structure their income to take advantage of tax laws and minimize their taxes while the average middle class American has little opportunity to rearrange his finances to reduce the tax bill. One of the best selling points of a consumption tax is that one chooses whether or not to consume and at what level. It doesn’t dis-incentivise productive activity (working, investing, building a business). It would be far easier to administer than the current IRS Code. I hope to see this become a reality in my lifetime.

Lisa

 

[Persuader]

You seem to be contradicting your initial argument which was based on certain individuals…Mr Silver Spoon having high earning power through luck and greed rather than ability and industry. There is probably a bit of both but the idea we should cap salaries and “spread the wealth” is an anathema to me and probably most of America.

Where is the contradiction? In a meritocracy, a person would be successful just in case he had the ability. But the fact that he has that ability is largely, if not entirely, out of his hands. The genetic and (childhood) environmental factors contributing to his ability are not chosen by him, and he had no hand in making them so. He is just as much a victim to his biology and his environment as the mentally ill woman searching the trashcans. So even if we had a meritocracy - and we don’t - even then it wouldn’t be fair.

Thanks to the “great society” where devients were turned into “victims” (yeah I know that’s harsh) they learned quickly that they really didn’t have to DO anything as there were “programs to help them” advance in their destructive behavior.

I am not talking about government programs, I am talking about wages. So, I don’t really understand why you are writing all this nonsense about government handouts. But you sure are harsh (and that’s being kind). I guess you have a lot of unbiased and good research to show how ill-advised it is for governments to help people. After all, those people getting help in Scandinavian countries are doing terrible, right? They couldn’t be topping the new statistic on well-being just presented by the UN, could they? Oh, wait…

Anyway, I thought people couldn’t be turned into anything. You seemed to be disagreeing with me that genes and environment is important. It’s all your own doing, right? But if that is true, government assistance wouldn’t be able to influence anyone’s decision-making. No, it’s all their own doing. Similarly, someone having a supportive and stimulating childhood couldn’t possibly be shaped by that. No, it’s all on him. None of it matters. You might as well put every child in foster homes. Doesn’t matter.

Thus the idea that it’s fair to take Mr Wall Street’s big bonus (whether he deserves it or not who are we to say?) so Ms Walmart can have a “living wage” does nothing to inspire Ms Walmart to better her position through education and hard work. Nor does it do anything to Mr Wall Street other than make him more and more resentful of the government.

I am not sure you understood the point. The point is that the Wall Street fat-cat can’t deserve it. Even if he didn’t get any legs up from his rich parents growing up. Even if he got no help getting the jobs and letters of recommendation. He didn’t choose two critical factors in personal development. He didn’t choose his genes and he didn’t choose his environment growing up.

Now, you seem to be suggesting that people shouldn’t be paid a living wage since they would lose their motivation to improve their financial situation. Do you have any evidence that this kind of suffering is necessary (I would be very surprised), or are you just making stuff up? Regardless, you seem to forget that people actually need to do that work. We need cashiers. So given that we need someone to do the job, why shouldn’t they be paid a living wage? Remember that our society is based on division of labor.

As to your countries…you make my point. These are all countries where people are employed and work and pay high taxes. The problem with the PIGS is that they dont.

No, I am not making your point. You said that the the countries with largest social programs (which is not Greece, Spain etc.) have a lot of goodies, but not a lot of people paying for them (implying that a disproportionate amount of people are unemployed because of those programs). I just gave you the employment-to-population ratio, which flies right in the face of that claim. Now you are trying to twist what you said into something else. Please, do you think people cannot read what you are writing?

PS: just as an aside, I trust you have looked at the economies you are criticizing, and found that their expenses when it came to social programs were absolutely unsustainable and critical factors in the collapse. So, let’s look at Spain, for instance. In 2007, Spain had a record budget surplus of +2.2% of GDP, compared to +0.3% for Germany. Furthermore, Spain had a net debt of 27% of GDP compared to 50% for Germany. Government social expenditure was 25.3% of GDP in Germany in 2007 - higher than Greece, Spain, Portugal and Italy. Unless there was a substantail jump in social expenditure in 2008 (and it wasn’t), social expenditure could hardly be said to be what broke the camel’s back.

 

[ComputerGeek25]

Where is the contradiction? In a meritocracy, a person would be successful just in case he had the ability. But the fact that he has that ability is largely, if not entirely, out of his hands. The genetic and (childhood) environmental factors contributing to his ability are not chosen by him, and he had no hand in making them so. He is just as much a victim to his biology and his environment as the mentally ill woman searching the trashcans. So even if we had a meritocracy - and we don’t - even then it wouldn’t be fair.

So, if it’s out of their hands, we give them craddle to grave welfare? How is this charity? How does this benefit the individual and society in the long run?

 

[estesbob]

I am saying do away with all loopholes, and simplify the rates and code.

The rich still pay the biggest part of the pie, loopholes and all.

By loopholes do you mean the Mortgage Interest deduction? Charitable Contributions?
Medical expenses? Property Taxes?