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Thread: ultra-billionaire pays 1/2 the tax rate we do ...

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    Default ultra-billionaire pays 1/2 the tax rate we do ...

    ... the 'dirty little secret' behind politicians' calls to tax the 'rich' ! The 'rich have the means to avoid actually having to pay a tax rate that is anywhere near the 'official' tax rate, while working stiffs get stiffed !



    (snip)"Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."

    During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.

    "There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said.

    Mr Buffett also took a pot shot at hedge fund managers. He said: "Hedge fund operators have spent a record amount lobbying in the last few months - they give money to the political campaigns. Who represents the cleaning lady?"

    His intervention comes amid an increasingly rancorous debate on Capitol Hill about tax. Shortly after taking office, President Bush pushed through $2 trillion in temporary tax cuts, including sharp reductions for high-earners. These expire at the end of 2010 and the White House wants to renew them.

    A leading Democrat, the Harlem congressman Charlie Rangel, published alternative plans this week that would impose a 4% surcharge on people earning more than $200,000 a year, while delivering tax relief to 90 million working families.

    Republicans say the net effect would be a $2 trillion tax increase that would hurt small businesses and farmers. Meanwhile, Mr Buffett's remarks drew a robust response from the US Chamber of Commerce, which said the top 1% of US earners accounted for 39% of tax revenue - and the highest earning 25% of the population delivered 86% of the tax-take.

    The chamber's chief economist, Martin Regalia, said: "Mr Buffett has made an awful lot of money and if he wants to pay more taxes, I think that's fine. But I think he should get his facts straight."

    He added: "There's no question in my mind: if you were to impose [the Democrats'] tax increases, you would see the US go into a recession.""(snip)

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    ........and your solution would be???

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Richard_Head View Post
    ........and your solution would be???
    Ay there's the rub. Afaik , the main reason Buffett and others pay such a relatively low % of their income in taxes is because so much of what they receive is in the form of dividends ; capital gains and tax - free interest on Muni bonds. The first two are taxed at a much lower rate and the latter isn't taxed at all. To a lesser
    extent Buffet, and those similarly, situated benefit from deductions and credits not usually available to the ordinary taxpayer.

    Afaic, the BEST solution is a Flat Tax. Eliminate all credits; deductions; allowances etc. etc. INCLUDING the blessed home mortgage interest deduction and tax everyone at 10 to 15% ( depending on whose figures and revenue projections you prefer.)

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    Yekhefah
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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    ^^^ When you make $15,000 a year, 15% of that is a serious kick in the nads. It hardly compares to 15% of $500,000 a year. Such a flat tax would punish the lower classes even more and let the rich pay even less.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Yekhefah View Post
    ^^^ When you make $15,000 a year, 15% of that is a serious kick in the nads. It hardly compares to 15% of $500,000 a year. Such a flat tax would punish the lower classes even more and let the rich pay even less.
    I HAD A LITTLE TROUBLE WITH THE EDITING. I thought I had edited my last to read: "After a healthy personal exemption .... "
    Someone making $15,000 wouldn't pay a dime under any Flat Tax proposal i'm aware of and most likely pays no Federal Income Tax now under the current system. For a Family of Four the total exemptions could be as high as $25,000.

    There are also proposals for modified versions allowing home mortgage interest to be deducted and my personal favorites set two or three brackets : 10% ; 15% and 20% for the top earners making over $1 million a year.

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    Yekhefah
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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Last year I made just under $17,000 (bad year, long story) and I owed about $1500 including Medicare and Social Security (neither of which I'll ever get to use). Might not sound like a lot of money, but it was a catastrophe for me. I managed to pay it in July, but I had to do without some necessities and lean heavily on other people for awhile.

    If we were talking about even a 10% flat tax you'd be dipping even further into the pockets of those who can least afford it, especially since Medicare and Social Security taxes aren't going anywhere. There is a reason that nearly all the flat-tax proponents are affluent.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Yekhefah View Post
    Last year I made just under $17,000 (bad year, long story) and I owed about $1500 including Medicare and Social Security (neither of which I'll ever get to use). Might not sound like a lot of money, but it was a catastrophe for me. I managed to pay it in July, but I had to do without some necessities and lean heavily on other people for awhile.

    If we were talking about even a 10% flat tax you'd be dipping even further into the pockets of those who can least afford it, especially since Medicare and Social Security taxes aren't going anywhere. There is a reason that nearly all the flat-tax proponents are affluent.
    The Flat Tax proposals I'm aware of ALL have an exemption under which you would not have paid a dime in Income Taxes.

    You also demonstrate how unfair it is to the middle-class to slam them with Medicare and Social Security. If it were up to me, it would be up to you to provide for your own retirement and medical care.

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    Yekhefah
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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    We agree on that 100%.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    I don't know, I think I agree with this part
    "the US Chamber of Commerce, which said the top 1% of US earners accounted for 39% of tax revenue - and the highest earning 25% of the population delivered 86% of the tax-take."

    I don't think its so bad for buffet to only pay 17% of his income, if that amounts to millions of dollars a year. I get sad when I see my thousands go out the door to the IRS. I cant imagine what it must be like.
    I don't really understand why people talk about the ideal situation being that taxes should "hurt" everybody the same way equally. Its so negative! Why don't we focus more on how much more benefit our tax dollars bring us?

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Its so negative! Why don't we focus more on how much more benefit our tax dollars bring us?
    I would be very interested in hearing any recent example where the increased spending of tax money has actually resulted in a greater benefit !!!??? The only real example that comes to mind is that Louisiana has finally retaken control of its own state government, thanks to billions of federal tax dollars spent to relocate former 'low income' Louisiana residents to other states !




    Also back to the original point of this thread, yes the richest 1% of Americans pay something like 38% of all federal tax revenues. But they also receive over 21% of the earnings and own over 50% of the real property / assets. Why should a billionaire get away with only paying a 17% overall tax rate when hard working middle class Americans have to pay 28% or 31% or 33% ? This point is even more glaring in terms of absolute dollars. Warren Buffet's 17% tax rate going to a 28% tax rate would cause his 1 billion dollar after tax income to drop to what 800 million dollars ? This is not affect the number of vacation homes / private jets / Maybachs that he is able to buy ... i.e. his standard of living would not change significantly. Now compare that to a 'middle class person' with a $75,000 per year pre-tax income (i.e. most full time dancers) seeing their tax rate go from 28% to 17%. This would essentially cause an increase in after-tax income of about $8,000 per year, which WOULD make a huge difference in her standard of living - or more importantly to her investment portfolio thus standard of living in later life !

    !
    Last edited by Melonie; 11-01-2007 at 04:14 PM.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Eric Stoner View Post
    You also demonstrate how unfair it is to the middle-class to slam them with Medicare and Social Security. If it were up to me, it would be up to you to provide for your own retirement and medical care.
    I agree, but with the exception that people with disabilities should not be expected to do the same.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    I'll support a flat tax if the rate is 0%.

    My life's mission is to make at least one half of Franklin's famous "Death and Taxes" slogan untrue
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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by TheSexKitten View Post
    I agree, but with the exception that people with disabilities should not be expected to do the same.
    What we OUGHT to do is take care of those who cannot take care of themselves ( and do not have parents or children able to do so ) out of General Revenues and end the ridiculous shell game of Social Security once and for all.

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    Yekhefah
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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    You're in the military, right, Sh0t? I'm curious as to how you expect to receive a salary and benefits if no one pays taxes, not to mention housing, weaponry, armor, etc.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    ^^^ well we could always go back to paying for the US gov't and military in the good old fashioned constitutional way ... via excise taxes on imported goods, via apportionment of federal tax revenue needs on each individual state based on their respective populations (which in turn would be collected via state per-capita levees or state consumption taxes a.k.a. sales taxes) !

    (snip)"Apportioned tax: Congress has the authority to levy a direct tax for specific reasons, such as financing a war, so long as the amount needed is identified and each person ( a poor person or a wealthy person) pays the same amount of tax—an equal portion of the total amount levied."(snip)

    from

    Every war up to World War One ( but in de-facto terms, up to the Spanish American War) was financed in this manner in accordance to the US constitution. Coincidentally, the US had extremely few foreign wars during this period !!! Up through 1890 or so i.e. the McKinley Tariff act, America getting involved in a war meant that every American would instantly wind up with a higher tax bill and/or higher prices on all imported goods they purchased in order to fund that war.

    Granted that Spanish American war funding / policy fell into a gray area, since the Wilson-Gorman Tariff Act of 1894 had established a de-facto income tax on wealthy American investors. see This effected a de-facto change in federal funding such that getting involved in a war no longer directly impacted the tax bill or prices paid by 'average' Americans !!! Media mogul of the time William Randolph Hearst arguably exploited this fundamental change, and soon sold 'average' Americans on the idea that the US needed to go to war with Spain to 'liberate' Cuba / Puerto Rico / Phillipines etc. With 'average' Americans no longer having any 'skin in the game', and with a highly publicized 'manufactured' international incident (the supposed sinking of the US Battleship Maine by the Spanish), the Spanish American War became a suprisingly easy sell, and in turn started America on the road to foreign imperialism.

    Arguably after the Wilson-Gorman Tariff act, and certainly after the enactment of the Sixteenth Amendment establishing an individual income tax in 1913, instead of every US citizen bearing a somewhat equal burden of the cost of government / defense, that burden was shifted to a wealthy few who now paid the lion's share of such costs. As in any situation, 'money talks' ! Thus from the point where the individual income tax was established, gov't policy / war policy was essentially put into the hands of the wealthy few who were bankrolling the majority of the associated costs. Obviously, when those wealthy few are in a position to profit from America's foreign imperialism, they encourage more foreign imperialism !!! Any 'delusions of democracy' nonwithstanding, the same holds true today.

    America's Founding Fathers understood this principle very well, which is the reason that the Founding Fathers structured the funding of gov't / wars such that EVERY American would have some 'skin in the game'. The 16th Amendment establishing an income tax effectively ended one aspect of American democracy, and instead arguably created a structural divide between a 'rich' elite and a powerless 'poor' with absolutely no 'skin in the game'. Within a very few years of the 16th Amendment's passage, 350,000 or so of those powerless 'poor' were sent off to be wounded or killed in WW1 - arguably substituting a formerly figurative 'skin in the game' for some very real and personal skin in the game !

    The ultimate irony of course is that, in the near century since the establishment of the income tax, all of the former taxes that the income tax supposedly removed from the shoulders of the 'poor' i.e. state sales taxes, taxes on imported goods, etc. have steadily crept back into existance. Thus, arguably, the American 'poor' are again as heavily taxed today as they were in 1890, and the American 'middle class' are more heavily taxed today than they were in 1890, but both groups now have extremely little de-facto 'say' in US gov't / war policy compared to the 'rich' elite !

    And of course this leads to the 'moral of the story' ... beware the law of unintended consequences where any change in gov't policy is concerned. History proves that the beneficial aspects of such changes in gov't policy are usually short-lived, as well as proving that the eventual unintended consequences are usually far worse than any 'average' American could have originally envisioned !!! And circling back to the topic at hand, one of the most insidious unintended consequences facing us today is the fact that 'middle class' Americans are now bearing a significantly higher tax 'burden' (in terms of percentage of total earnings being collected in taxes) than the 'rich' elite are, despite the fact that today's 'middle class' American have extremely little 'say' in regard to gov't / war policies which their tax money is now funding !

    ~
    Last edited by Melonie; 11-02-2007 at 11:11 PM.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Richard_Head View Post
    ........and your solution would be???
    What do you think about Congressional DEMOCRATS stalling on Hedge Fund
    Tax Reform ? As things stand now , Hedge Fund Managers pay 15 % on their
    incomes and reform proposals are stalled in the Democrat controlled Congress.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    I think that it's very indicative of a previously 'well kept secret' ... that the Democratic party may give lip service to taxing the very rich, but in fact receive a huge amount of support from the very rich, and in turn Democrats pursue policies which benefit the very rich (albeit with as little publicity as possible). All you need to do is look at the median incomes in the districts of Nancy Pelosi, Dusty Harry, Ted Kennedy, John Kerry, Hilary Clinton, Chuck Schumer etc. to see that they are not representing the 'poor' !!! The term 'Limousine Liberals' as well as the latest variant 'LearJet Liberals' does have some basis in fact !!!

    As such, while the Democrats may be publicly calling for a tax bracket increase plus 4% surtax on the very rich, in point of fact they are doing everything possible to preserve and expand loopholes such that the very rich will never actually have to pay tax rates that are anywhere near the 'published' tax rates. The capital gains tax leveed on hedge fund investments versus an ordinary income tax is one such loophole. Yes this allows hedge fund managers to pay a 15% tax rate on millions of dollars worth of earnings as discussed in the news reports. But it also allows very rich Americans to receive higher rates of return from their anonymous hedge fund investments as well - and these are the very people who are huge contributors to Democrat campaign funds. As long as these loopholes remain in place, the 'very rich' will be relatively unaffected by the tax increases being discussed, with the heaviest tax increase actually falling on the 'middle class' (who already pay real world tax rates which are twice as high as those the very rich pay).

    If you have followed recent history, you already know that Barack Obama was a sponsor of a bill intended to clamp down on very rich Americans escaping US taxes via investing in offshore tax havens and via other loopholes. That bill was killed before it ever made it onto the congressional agenda by the very same Democratic leadership that is now stalling the hedge fund tax bill.

    However, for whatever reason, the offshore tax haven bill got very little mainstream media publicity. Also, for whatever reason, Obama's political contribution money mysteriously dried up, his standing in the polls declined, and he was soon back to collecting $20 donations at mass rallies. So if anybody is wondering why Obama's chances of becoming our next president went in the toilet at about the same time he co-sponsored the now dead offshore tax haven bill which would have actually raised taxes on very rich Americans, it shouldn't be too difficult to connect the dots ! However, if you want to confirm this with media reports, for whatever reason you need to go outside the US media to find most of the reports.




    (snip)"Democrats wake up to being the party of the rich

    By Michael Franc

    Published: November 4 2007 17:14 | Last updated: November 4 2007 17:14

    A legislative proposal that was once on the fast track is suddenly dead. The Senate will not consider a plan to extract billions in extra taxes from mega-millionaire hedge fund managers.

    The decision by Senate majority leader Harry Reid, the Nevada Democrat, surprised many Washington insiders, who saw the plan as appealing to the spirit of class warfare that infuses the Democratic party. Liberal disappointment in Mr Reid was palpable at media outlets such as USA Today, where an editorial chastised: “The Democrats, who control Congress and claim to represent the middle and lower classes, ought to be embarrassed.”

    Far from embarrassing, this episode may reflect a dawning Democratic awareness of whom they really represent. For the demographic reality is that, in America, the Democratic party is the new “party of the rich”. More and more Democrats represent areas with a high concentration of wealthy households. Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers – single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000 – and combined them to discern where the wealthiest Americans live and who represents them.

    Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

    This new political demography holds true in the House of Representatives, where the leadership of each party hails from different worlds. Nancy Pelosi, Democratic leader of the House of Representatives, represents one of America’s wealthiest regions. Her San Francisco district has more than 43,700 high-end households. Fewer than 7,000 households in the western Ohio district of House Republican leader John Boehner enjoy this level of affluence.

    The next rung of House leadership shows the same pattern. Democratic majority leader Steny Hoyer’s district is home to the booming suburban communities between Washington, DC, and Annapolis. It boasts almost 19,000 wealthy households and a median income topping $62,000. Mr Hoyer’s counterpart, minority whip Roy Blunt, hails from a rural Missouri district that has only 5,200 wealthy households and whose median income is only $33,000.

    Income disparity – to use the class warrior’s favourite term – is greatest among the districts of lawmakers that lead each party’s campaign arm. Maryland senator Chris Van Hollen chairs the Democratic congressional campaign committee. With more than 36,000 prosperous households and a median income of nearly $70,000, his suburban Washington district even out-sparkles Ms Pelosi’s. In contrast, fewer than 5,000 such wealthy households are found in the largely rural district of his Republican counterpart, Tom Cole from Oklahoma. The median income there is only $35,500.

    Democratic politicians prosper in areas of concentrated wealth even in staunchly Republican states such as Georgia, Kansas and Utah. Liberal congressman John Lewis represents more than 27,500 high-income households in his Atlanta district. The trend achieves perfect symmetry in Iowa. There, the three wealthiest districts send Democrats to Washington; the two poorest are safe Republican seats.

    Soon this new political demographic may give traditional purveyors of class warfare the yips. To comply with new budget rules, liberal Democrats on Capitol Hill are readying a tax increase of at least $1,000bn over the next decade. Ms Pelosi says she wants to extract all of this from “the wealthy”. When has a party ever championed a policy that would inflict so much pain on its own constituency? At what point will affluent Democrats crack and mount a Blue State tax rebellion?"(snip)

    ~
    Last edited by Melonie; 11-05-2007 at 04:06 PM.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    ^^^In the interest of equal time, I found this link to be fairly good reading.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    ^^^ your link does indeed refer to a cut in the 'official' income tax brackets which apply to the ordinary incomes of the 'very rich' as well as the 'middle class'. However, in the real world, the 'very rich' typically have only a tiny percentage of their total earnings classified as ordinary income ... whereas the 'middle class' have the vast majority of their total earnings classified as ordinary income. In terms of a capital gains cut, very rich people whose stock and bond holdings take place under cover of an anonymous hedge fund or offshore broker weren't actually paying capital gains taxes in either case ... whereas every 'middle class' stock transaction is automatically reported to the IRS by US brokers. Finally, the triple tax free earnings provided by municipal bonds wasn't affected at all by any of these tax cuts, and won't be affected by Rangel's proposed tax increases. However, with a $50k typical minimum buy-in for the best bonds, extremely few 'middle class' investors can afford to take advantage of the best tax free bond deals.

    Your link basically provides further proof that the 'very rich' pay actual tax rates which are so far away from the 'official' tax rates that the subject of taxes is laughable (as long as their tax favored alternatives, offshore tax havens etc. remain viable). However they do 'sound good' to poor voters who have no understanding that these cuts or hikes in 'official' tax rates never actually applied in the past and still won't apply in the future ... unless of course the taxpayer falls into the 'middle class' income range.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    ^^^I still have absolutely no idea what you would propose to level the playing field. I have seen absolutely nothing from the republicans and GWB over the last 8 years that would lead me to believe that they have any better solutions, I would hope that their only plan would not be to simply oppose any dem plan.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Richard_Head View Post
    ^^^I still have absolutely no idea what you would propose to level the playing field. I have seen absolutely nothing from the republicans and GWB over the last 8 years that would lead me to believe that they have any better solutions, I would hope that their only plan would not be to simply oppose any dem plan.
    Melonie is certainly free to respond as she sees fit. I repeat my call for a Flat Tax on ALL income.

    Richard- Neither you nor I like the idea of the super-rich avoiding the payment of their fair share of taxes. Under the current system they most definitely do not. Ironically it is DEMOCRAT lobbyists scrambling to de-rail any change in the current treatment of hedge fund earnings. It is Hillary who has been raking in the most contributions from hedge fund fat cats. It was Chuckie Cheese Schumer who fought the hardest to maintain the current favorable tax treatment for hedge fund earnings.

    From Steve Forbes all the way back to Reagan it has generally been Republicans who have advocated a Flat Tax. The ones who fear such a system the most are lobbyists and the Democrats because without deductions and credits- who needs them ? It's not all that they do but "Tax Code Lobbying" is the primary reason for being for many Washington lobbyists and lawyers. We went from a fairly good tax simplification back in 1986 that eliminated a lot of deductions and credits to the current system replete with loopholes and favoritism.

    Has anyone heard any of the current crop of Dems running for Pres. ( except maybe Obama ) come out for serious, fundamental change ?. Tax hikes ? Yes. But as we have shown, such increases will be born primarily by the middle class and not the so called "rich". Btw, except for Huckabee and Paul, the Republicans haven't been too much better.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Quote Originally Posted by Eric Stoner View Post
    Has anyone heard any of the current crop of Dems running for Pres. ( except maybe Obama ) come out for serious, fundamental change ?.
    Fair enough, I love to see somebody (anybody) propose some serious fundamental change.

    Quote Originally Posted by Eric Stoner View Post
    Tax hikes ? Yes. But as we have shown, such increases will be born primarily by the middle class and not the so called "rich".
    I would say that's still up for debate, kinda depends upon whose statistics you want to use.

    Quote Originally Posted by Eric Stoner View Post
    Btw, except for Huckabee and Paul, the Republicans haven't been too much better.
    Exactly my point and neither of those two have a shot at the nomination so it's right back to the 'cut taxes for the rich' model of tax reform.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    Melonie is certainly free to respond as she sees fit. I repeat my call for a Flat Tax on ALL income.
    I would agree with this based on your definition of 'ALL'. If ALL does not include income from offshore investments. then the very rich will invest offshore. if ALL does not include income from anonymous investments via 'private banking' and hedge funds, then the very rich will invest via 'private banking' and hedge funds. If ALL does not include offsetting credits from tax favored investments like wind farms and ethanol, then the very rich will continue to invest in wind farms and ethanol and apply the tax credits to reduce other tax liabilities. If ALL does not include interest earnings on triple tax free municipal bonds, then the very rich will continue to invest in tax free municipal bonds.

    The bottom line is that unless the high net worth American investors are deprived of their high ticket tax avoidance loopholes, NO plan to change US tax laws is going to have much of a real world effect on the taxes that high net worth American investors actually have to pay ! As long as politicians of either party preserve the loopholes for offshore tax havens, tax free municipal bonds, production tax credits for ethanol and wind farms, anonymous hedge fund investing etc., any calls to 'tax the rich' will actually translate into 'tax the middle class'. However, as Barack Obama quickly discovered, a serious attempt to close down these tax perks will quickly result in extremely powerful behind the scenes forces coming into play to squash such proposals ... as well as squash the person making such proposals !!!

    And where party differences are concerned, Republicans do generally move to simplify and cut tax rates, whereas Democrats talk a good game re taxing the rich but create / preserve all sorts of special tax perks that allow the very rich to side step any such tax rate increases having much of an effect on THEIR incomes !

    IMHO in order to actually change the status-quo in regard to real world tax burden, a near revolution would be necessary. Absent that, it is arguable that between the very rich, the politicians financed by the very rich, the media controlled by the very rich, the votes of civil servants and union members who are dependent on those politicians for their jobs, and the votes of the 'poor' who are dependent on those politicians for their benefit checks, it is no longer possible for working class + middle class taxpayers to carry an election majority.

    I would say that's still up for debate, kinda depends upon whose statistics you want to use.
    If your statistic is the actual tax rate collected as a percentage of total earnings, then the numbers clearly show that 'middle class' taxpayers are paying out a percentage that is nearly twice as high as the 'very rich'.

    However, if you are talking about the tax rate percentage charged on 'ordinary income', then yes the very rich are nominally paying 36% versus the middle class paying 28%. But in terms of total dollars in earnings, your typical middle class wage-earner has 90% of their total earnings classified as 'ordinary income' subject to a 28% tax rate. On the other hand a very rich person may have only 5-10% of their total earnings classified as 'ordinary income' subject to a 36% tax rate. Another 40-50% will be classified as 'capital gains' subject to a 15% tax rate, and yet another 40-50% will be classified as tax favored / tax free which will not be subject to tax at all (and in the case of tax favored, may actually reduce taxes due on other classes of earnings !). And of course none of this counts the foreign earnings from 'private banking', the anonymous earnings from hedge funds and private equity funds that 'appear' to be foreign earnings etc. These are the reasons that John Kerry's 2004 public tax return showed a 12% average taxation rate on 5 million dollars in earnings (mostly thanks to tax free muni bonds), and why Warren Buffet pays a 17% average taxation rate despite making no personal effort to minimize tax liability, whereas 'middle class' taxpayers are shelling out 25% of their total earnings in taxes.
    Last edited by Melonie; 11-06-2007 at 08:42 AM.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    The tax rate for capital gains should be taxed just like any other income. This goes to show you how irresponsible and reckless Republicans are. While we sink 10 trillion dollars in debt, caused by big-spending, big-borrowing Republicans, they're giving tax breaks to the ultra-rich.

    The Republicans are like drug addicts or chronic gamblers. They spend, spend, spend, and borrow, borrow, borrow, until they hit bottom and go bankrupt. They need that next fix of borrowed money to recreate that last high. They continue, like the drug addict, till they bottom out.

    The problem is, unlike the drug addict or gambler, the Republicans are taking the whole country down with them. Like the drug addict, the Republicans blame everyone else for their irresponsible behavior, namely, Democrats, Bill Clinton, or some other bogeyman.

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    Default Re: ultra-billionaire pays 1/2 the tax rate we do ...

    This goes to show you how irresponsible and reckless Republicans are. While we sink 10 trillion dollars in debt, caused by big-spending, big-borrowing Republicans, they're giving tax breaks to the ultra-rich.
    I see that the mainstream media's disinformation campaign continues to be extremely successful !

    However, if you actually read the news you'll find that it was the Democrats who took the 'tax hedge fund income as ordinary income' bill off the table. It was the Democrats who took Obama's 'offshore tax haven' bill off the table. It was the Democrats who created the production tax credits and subsidies for wind farms and ethanol distilleries. It is the Democrats (except Obama) who are receiving the lion's share of political contributions from the ultra-rich, and from their corporations.

    For the umpteenth time, Democrats going on record calling for big increases in income taxes for the rich, while at the same time preserving all of the tax favored situations / loopholes that allow the rich to actually avoid paying anything close to the tax rates being called for in their tax increase proposal, accomplishes absolutely nothing in terms of increased tax receipts or reduction in the deficit. It is a smoke screen at best and a hypocritical 'stealth' agenda at worst. However, what it DOES accomplish is conveying a false impression to 'poor' and 'financially uneducated' voters that the Democrats will take money from the very rich and hand that money to the 'poor'. In reality, what it WILL accomplish will be to take money from the 'middle class', hand that money to the 'poor', and allow the very rich to still pocket huge earnings with a comparatively low percentage extracted for taxes.

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