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If I had a dollar for every response I have to this utterly ridiculous notion that the government should punish success and give handouts to the poor, I would be able to reduce the deficit more than the Buffett Rule would.
First, Margaret Thatcher articulated it perfectly when she said, “The problem with socialism is that eventually you run out of other people’s money.” That’s right, eventually you would run out of rich people to tax and everyone would be living with less money to spend and put into the economy.
Also, I ask you this: When was the last time you saw someone hired by a poor person? The rich in this country are some of the biggest drivers of America’s economy.
They are the small business owners. They are the investors. They are the ones that create technological innovations, like Steve Jobs, because of the desire for profit. Also, many wealthy people in this nation, such as Bill Gates and even Mitt Romney, are rather charitable as well.
Let me be clear on one thing. Myself and my family are nowhere close to qualifying for a tax increase had the Buffett Rule passed. The only dog I have in this fight is the fact that I want to live my life in an economy that is run by the free-market, where success is desired and not punished, and where personal responsibility ranks higher than government handouts.
For my fellow Hokies whom I still haven’t convinced, I issue you this challenge. If you want to help those in this country that have less by taking from those that have more, why don’t you form a club on campus that advocates the redistribution of grade point averages?
If you want everyone in this country to have a “fair chance” (although I fail to see what is “fair” about taking money from those who have actually earned it), then why don’t we start petitioning President Steger to redistribute GPAs so that every Hokie has a “fair chance” at getting into graduate school, law school or medical school.
It is not fair to redistribute grades, and it simply is not American to redistribute wealth. So please, don’t fall for the class warfare rhetoric during this election cycle, because it is just empty rhetoric at
best.
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A version of this article appeared in the May 1 issue of the Collegiate Times.
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I'm sure everyone would agree that this tax hike obviously isn't the answer to the national debt. With that, Matt, what was it you said about NPR when funding was being cut? It was a really small number in comparison to the size of the GDP too - you had a different tone though. Instead of saying it would only be 'x amount of hours' worth of money saved, I remember you saying something to the effect of "any way to reduce spending is a good way to reduce spending - regardless of amount."
Now that the tables are turned, you're taking the opposite side.
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where are your editors? it's "buffett" not "buffet"
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Congress' sole charter is not to balance the budget of the United States, it's to provide for the general welfare. Anyone who says the Buffett rule will decrease the deficit significantly is obviously wrong. But that doesn't mean its not worthwhile. Warren Buffett was absolutely right when he said it wasn't moral that his secretary paid more taxes than he did, and that's what this bill is about, doing the right thing. Does anyone really think that jobs will be lost because of an individual's taxes? That doesn't quite factor into the supply and demand model of the free market. That sounds like a personal problem. If there is a need for workers, they will get hired because they're NEEDED, if there is no need, they won't, or they'll get fired. Plain and simple. Anyone who says otherwise is just spouting republican rhetoric without putting any thought to their own words.
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Well let's start with the preamble:
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
count 5 items not relating to promoting the general welfare.
now more specifically, Article 1 (the congress), Section 8 (an enumeration of powers - ie - its charter): http://www.archives.gov/exhibits/charters/constitution_transcript.html
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to PAY THE DEBTS and provide for the common Defence and general Welfare of the United States" ...
balance budget == pay debt duh!
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then in addition more enumerated powers include 4 related to money, and quite a few more related to the military, defense, laws of nations, etc yet no specific powers associated with the general welfare.
take note of the extensive use of the word "and" in the first paragraph of A1-S8. "And" is a "conjunctive"; if you understood English, you would know a conjunctive implies multiple objects within a sentence are to be taken as a collective whole, whereas the disjunctive "or" was not used because they didn't want future liberals such as yourself to be confused by having to decide what congress should be doing with its time. See, with the conjunctive, congress should be doing all of them, not only the ones liberals want.
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Buffet didn't say that he pays less tax than his secretary. He said to have a lower percent of his income (tax rate). Even with a lower rate, Buffet pays more taxes than his secretary. He didn't say it wasn't moral, he said it wasn't fair.
Your "plain and simple" analysis of the labor market shows that you are a jobless (or low-paying job) college student. If businesses have more capital they might higher more people they need to to run their core business in order to take a risk at increasing their profitability. That is the whole reason why the fed maintains a low interest rate and is running operation twist: to provide liquidity in discourage saving (thus encouraging spending - which if you have to spend then you will take on risk if your other business needs are satisfied). When the fed does it, this is called monetary policy. The incentives are created by lowering tax rates. This is called fiscal policy. If you haven't noticed we have had the same fiscal policy for 4 years and we're still in a struggling economy. Time to get our fiscal house in order and use fiscal policy for further economic stimulation.
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The bill wasn't expected to pass. The goal was to convince a majority of Americans that tax hikes should be on the table during deficit talks. Now when it comes time for the Bush tax cuts to expire, a large portion of that 60% "I'm okay with raising taxes on millionares; why not let the tax cuts expire on the $250k bracket?"
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I agree with Michael Medved on this. The president knows this will not pass and he knows it would not make a dent in the deficit. If it did pass, most investors would likely start selling stocks, which would have disastrous consequences. Obama knows this, but he also knows it won't pass...so he doesn't have to deal with the disaster. It is merely a political ploy to demonize the republicans as greedy obstructionists during an election year. Those of us who understand economics and take the time to read both sides of the issue will not be fooled. Raising taxes during a recession is bad policy.
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Very well thought out! My congratulations gentlemen. One slight correction though. The wealthy actually pay substantially more taxes than the rest of us. Like about 80% to 90% of the total depending on where you cut off being "rich". They often pay a lower percentage. Mr Buffett for example paid millions more than his secretary. She paid a higher percentage of a much lower income.
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Time to close the text books and see some real numbers. My wife and I fall into the over $250K bracket and here are the real numbers based on $250k:
Fed Tax-$62,500
State Income Tax-$20,000
Social Security-$12,000
Property Tax-$7,000
Car Tax-$2,000 (have not bought a new car in 8 years)
401K Contribution-%50,000 (we don't pensions, self funding)
Mortgage-$30,000 (house is 25 years old)
State sales tax-$5,000
These figures don't include things like food, water, gas, spring breaks, funding kids college tuition, home and car maintenance and so on. So use your college education and figure out what's left.
If you don't believe me, ask your parents.
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Assuming you live in the state of Virginia:
Your 401k and your mortgage are not taxes. So, assuming the numbers above are accurate, you're paying $108,500 in taxes, for an effective tax rate of almost 44%. That's high, all right. Warren Buffett's point is that he pays an effective tax rate of 15%, despite making millions more than you. That's the issue the Buffett rule is intended to address.
That said, some things are funny with your numbers. You pay $5,000 a year in state sales taxes? At the 5% Virginia rate, that means you're spending $100,000 per year in taxable goods. At a $250k household salary, that's insane. Also, your property and car taxes are $7,000 and $2,000, respectively, for a combined property tax of $9,000? Mine are $2,000 and $100 (for two vehicles) -- $2,100 combined. Granted, we may live in different counties with different tax rates, but it sounds like you've massively overspent on your house and cars. Whatever taxation problems you have, your spending habits are totally unsustainable for your income level.
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Yes ypou are correct, the state taxes was off a zero, my bad. The real estate tax is completely accurate; what I paid for house and what it is worth are 2 different things. Unfortunately, I get taxed on the worth, which the atxes I paid on it were $9,000 for the year. As far as the vehicle tax, that is what I paid last year, don't assume I have just 2 vehicles.
My point was not all about taxes, my point is that you have to pay yourself first, you have to have a place to live and if you have to keep paying highers tax rates, where you do make the cuts.
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Thank you Matthew Hurt for a well-reasoned analysis! I love the grades analogy! To see a young person such as yourself cut right through the obvious political ploy Mr. Obama is using is enough to give me renewed hope for those that follow us Baby-boomers! Yet sadly there will be many who actually drink the kool-aid (or at least pretend to!) and consider this as a good thing and deserved by those evil rich!
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In the early 80s, couples making $1 million (inflation adjusted) dollars were into the highest marginal bracket, which was 70% then changed to 50%. In the 60s it was even more striking, with the top bracket reaching 91% for couples earning $3 million (for comparison's sake, the bracket for a $1 million-earning couple was 81%). Meanwhile, the effective tax rates experienced by middle-income earners seemed largely unaffected.
I'm all for efficient government and reducing the need for tax revenue, but when you put it into historical perspective, current brackets top out at 35%. If the Bush tax cuts were allowed to expire, the top bracket would return to 38.6%. That is hardly a catastrophe compared to previous rates. Not to mention, at the same time, capital gains taxes are at historic lows.
While I don't believe in "penalizing" the rich by high taxation, it seems that in recent decades, we've done the exact opposite and rewarded them with each passage of a new tax structure. I'm not advocating a return to levels that would lead the rich to shirk their tax obligations by finding clever tax shelters, but if we continue on our current trajectory, pretty soon they'll be arguing if they have to pay any tax at all.
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