The "Buffet Rule"

[DTorrchia]

President Obama made the pitch a few days ago that Warren Buffet shouldn't be paying less taxes than his Secretary. Does he?
Seems Obama and Buffet both have been a little careless with the facts lately. Who can blame them though with the poll numbers looking the way they are

http://news.yahoo.com/fact-check-ric...070642868.html

[Yssup Rider]

That's BuffetT, dammit! I thought this thread was about a smorgasbord!



At least you're flexing your mussels, you shellfish man!

[DTorrchia]

Originally Posted by Yssup Rider

That's BuffetT, dammit! I thought this thread was about a smorgasbord!



At least you're flexing your mussels, you shellfish man!

Now THAT was funny Yssup. I stand corrected...."Buffett". Probably had food on my mind!!!
Is there a way to edit the headline?

[budman33]

That reporter is about as right leaning as they get, has been for a longggggg time. Just because he says fact check doenst mean he checked them.

"
Well, that sounds like a slam dunk, right? The rich pay twice as much as middle class earners. Or maybe not:

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

So what if much of a really wealthy person's income is investment income? AP doesn't get into that; it moves on to discussing the fact that a lot of poor people pay no income tax.
It's useful to recall that Warren Buffett--supposedly the inspiration for this plan--was saying that he made $46 million but only paid 17 percent in taxes. His secretary, he said, paid more--relative to what she earned. Is Buffett the only one who's figured out how to do this? One recent report from the Citizens for Tax Justice showed:

The IRS report shows that in 2008 (the latest year for which data are available), the 400 richest income tax filers paid just 18.1 percent of their adjusted gross income (AGI) in federal income taxes.
That is down from 22.3 percent in 2000.

And this post from the Tax Policy Center tries to explain further:

The lower taxes on investment income mean that many high-income taxpayers face a lower ETR [effective tax rate] than middle- and upper-middle-income people who get almost all of their income from working. People in the top 0.1 percent--those with income over $2.18 million in 2011--who get more than two-thirds of their income from gains and dividends face an ETR of just 12 percent, compared with 16 percent for people in the fourth quintile who get less than 10 percent of their income from investments.

It's worth recalling that Obama's actual point was this:

They should have to defend that unfairness--explain why somebody who’s making $50 million a year in the financial markets should be paying 15 percent on their taxes, when a teacher making $50,000 a year is paying more than that--paying a higher rate.

It is difficult to see what is wrong with that statement. The Associated Press took a seemingly uncontroversial point and, by magic of its "factchecking" machine, turned into an inaccuracy."

http://www.fair.org/blog/

I'll wait for factcheck.org to weigh in.. they actually do that. check facts, not put it the title of an article so thereby must be true.

[DTorrchia]

@ budman 33-

So you're disputing the Congressional Budget Office??

"The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office."

or maybe you're disputing these figures from the IRS

"The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS".

or

"This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center"

So again, it would seem that according to the IRS and the Congressional Budget Office, the rich do seem to pay a fair share of their income in taxes.

"The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year".

Obama in his speech did not differentiate between actual income tax vs Capital gains taxes on investments. He's comparing two different taxes for the sake of the impression he wanted to create.
Surely you know this Budman.

[nuglet]

Well, I for one, will promote taxes too... when I'm over 80 years old have have access to $45,000,000,000 . That's Billion.... with a "B"..

[gfejunkie]

Perhaps Buffett should consider paying his own tax bill before lending his name to a bill that would increase the tax burden on everyone else. It's somewhere in the neighborhood of a billion, I heard.

http://newsbusters.org/blogs/noel-sh...ears-media-mum

[Budman]

It's the "Do as I say not as I do" rule. He means all others should may more taxes.

[theaustinescorts]

What Buffett said is that he pays a lesser rate
than any of his employees.

He stated that all his income is taxed on a straight 15% capital gains rate, and that he takes no tax shelters of any kind.

By paying 15% of his total income in taxes he pays less, according to him, than any of his employees.

Under Reagan the capital gains rate was 28%.

It was lowered to 20% under Clinton.

It was lowered again to the present 15% under Bush Jr.

It creates no investment. It is an un-needed incentive.

[Billy_Saul]

Hong Kong has no capital gains tax, yet has an unemployment rate of 3.2%

Singapore has no capital gains tax, yet has an unemployment rate of 2.1%

[theaustinescorts]

You don't have to look overseas.

Just ask any investor if he would invest less, or change what he'd do with his capital, if he had to pay the Reagan-era rate.

He'll tell you he'd do exactly the same things, and that's because he has no choice.

People that make all their income "investing" [moving money around from one bet to another] have to do what they do to achieve gains.

This is particularly true when interest rates are so low and loaning money is a losing game.

[nuglet]

really? loaning money is a losing game? what planet are you from? No one is loaning money except car title loans and pawns shops. And thanks to the fed policies and banks greed, the pawn shops are making historic returns. They're GLAD to loan..
I'm seriously considering dumping my stocks and getting a store front. 30%- 45% is a damn good return. I just don't want to go back to work, so I'll have to hire some staff.. HEY! There ya go.. I open a "loan shark" front, and help the economy by hiring a few people to staff it.. I make %40+, 3-5 people get jobs, I end up with several surplus cars and lots of stereos and tv 's to sell that I bought for $.10 on the dollar.

[BigGerman]

Buffet is playing fast and loose with the numbers. If his secretary is making $50,000, for 2010, she pays ~$5,944, or an effective rate of 11.89%, and that's with the standard deduction and one exemption. Holding the same scenario constant, he/she has to make over $66,000 to have an effective tax rate of 15%. If she has one dependent, he/she has to make over $75,000 to have an effective rate of 15%.