Warren Buffett - "stop coddling the super-rich"

[Moonlight J]

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=4

I'm fairly certain people will be reminded he was an Obama supporter in 08 and that it's a logical fallacy to say that because Daddy Warbucks says it's OK that makes it worth doing, but none the less, a good read.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

[Judge Jude]

It's a provocative piece, for sure.

[Fresno Bob]

those that have derived the most benefit from the system should pay the most to sustain it

[chancellor]

those that have derived the most benefit from the system should pay the most to sustain it

They already do, by a longshot.

I wonder if this counts as a campaign contribution in-kind?

[cardboardbox]

They already do, by a longshot.

and we have the most (or close to) progressive tax system among first world countries.

[OaklandA's]

They already do, by a longshot.

We've had this discussion before. During the years from 2003-2008, the average percentage of income paid to income taxes (for the highest bracket) was around 23%. From the years 1993-2002, the average rate was around 27%. Taxes are much lower now than they have been before.

[B-Fly]

and we have the most (or close to) progressive tax system among first world countries.

I think what Buffett's piece primarily highlights is the fact that those of the super-rich whose income is primarily through investment are treated much better than the wealthy and middle class folks whose income is primarily through salary. To the extent that the richest of the rich tend to get a smaller share of their annual earnings through salary, the progressive intent of our income tax system is frustrated by the lower taxation rates on capital gains.

[Wonderboy]

...the progressive intent of our income tax system is frustrated by the lower taxation rates on capital gains.

I don't know the answer and am just asking. Is their a progressive tax rate for capital gains? Maybe something where lower and middle range capital gains don't get taxed at the same rate as larger capital gains?

[cardboardbox]

I think what Buffett's piece primarily highlights is the fact that those of the super-rich whose income is primarily through investment are treated much better than the wealthy and middle class folks whose income is primarily through salary. To the extent that the richest of the rich tend to get a smaller share of their annual earnings through salary, the progressive intent of our income tax system is frustrated by the lower taxation rates on capital gains.

I'm pretty sure capital gains tax rates are progressive, even long term gains. Even before the rates were lowered under Bush, they were still lower than income tax rates.

[DMT]

I'm pretty sure capital gains tax rates are progressive, even long term gains. Even before the rates were lowered under Bush, they were still lower than income tax rates.

I am pretty sure they are not.

In fact, as B-Fly was alluding to, they are regressive, in that the uber-rich people who make way more of their income thru investments than salary have a lower tax rate than the rest of us whose investments are a much smaller source of our incomes.

[cardboardbox]

I am pretty sure they are not.

In fact, as B-Fly was alluding to, they are regressive, in that the uber-rich people who make way more of their income thru investments than salary have a lower tax rate than the rest of us whose investments are a much smaller source of our incomes.

http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

Short term is taxed at the same rate as regular income.

Long term has brackets of:
0
0
15
15
15
15

[GwynnInTheHall]

Heh, I find it interesting that one of the Richest guys in America is saying flat out---The Super Rich don't get taxed enough and some people are saying he's full of it.

I wonder who's right?

[OaklandA's]

http://en.wikipedia.org/wiki/Capital..._United_States

Short term is taxed at the same rate as regular income.

Long term has brackets of:
0
0
15
15
15
15

Correct. This is why Buffett only paid 17.1% of his income towards income taxes - the highest long-term capital gains rate is only 15%. This makes the U.S. system much less progressive, since the average rate paid towards income tax is actually higher for mid-range incomes than it is for the highest incomes.

[B-Fly]

Correct. This is why Buffett only paid 17.1% of his income towards income taxes - the highest long-term capital gains rate is only 15%. This makes the U.S. system much less progressive, since the average rate paid towards income tax is actually higher for mid-range incomes than it is for the highest incomes.

Right. One could argue that 0/0/15/15/15 is "progressive", but that's kind of a stretch.

[Wonderboy]

Right. One could argue that 0/0/15/15/15 is "progressive", but that's kind of a stretch.

Would something more like 0/0/15/20/25 be fairer? Maybe capping it at 25% for the highest level?