Warren Buffett - "stop coddling the super-rich"

[Judge Jude]

Another interesting article on capital gains tax:

http://www.nytimes.com/2011/08/20/business/questioning-the-dogma-of-lower-taxes-on-capital-gains.html?pagewanted=1

[Mithrandir]

Another interesting article on capital gains tax:

http://www.nytimes.com/2011/08/20/bu...l?pagewanted=1

From the article:

“It’s not the panacea for economic growth that advocates make it out to be,” he said. Mr. Buffett himself lent empirical support to this view in his column. “I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off,” he said.

[onejayhawk]

From the article:

“It’s not the panacea for economic growth that advocates make it out to be,” he said. Mr. Buffett himself lent empirical support to this view in his column. “I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off,” he said.

This is true. What a high capital gains tax does is slow turn over. It is not a disincentive to buy. It is a disincentive to sell. And yes, many transactions are defered specifically to gain capital gains treatment. A long call, to set a transaction date, is one of the many legitimate uses of options. It would make sense to have a time staggered capital gains rate.

BTW, the recent sell off in the market is going to be one of the factors favoring Obama in 2012. The Capital Gains taxes are going to drive the actual deficit down for 2011. As far as I am aware, they have not been factored in to any of the deficit projections. Of course, if the market turns, it will bite him next year.

J

[DMT]

This is true. What a high capital gains tax does is slow turn over. It is not a disincentive to buy. It is a disincentive to sell. And yes, many transactions are defered specifically to gain capital gains treatment. A long call, to set a transaction date, is one of the many legitimate uses of options. It would make sense to have a time staggered capital gains rate.

BTW, the recent sell off in the market is going to be one of the factors favoring Obama in 2012. The Capital Gains taxes are going to drive the actual deficit down for 2011. As far as I am aware, they have not been factored in to any of the deficit projections. Of course, if the market turns, it will bite him next year.

J

From your 1st paragraph, there is already a time staggered capital gains rate...less than a year gains are taxed as income while only those held longer than a year get the 15% rate. But it might make sense to add another tier. Either way, the lowest rate should be higher than 15% IMO.

Regarding your last point, what about those who sold at a loss? And, even if there is slight reduction in the deficit from those who sold at a profit, I still don't see how a huge sell-off in the market is a good thing for Obama. A sustained down-turn would fuel the perception that the economy is hurting...obviously employment is factor #1 but the stock market is also a factor among the investing class. And if it comes roaring back, the mood of the investing class will be much more positive and generally a rise the market precedes employment gains.

[heyelander]

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
World of Class Warfare - Warren Buffett vs. Wealthy Conservatives
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
World of Class Warfare - The Poor's Free Ride Is Over
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

[cardboardbox]

Anyone have thoughts on the Buffet Rule? Sounds like Obama is throwing out red meat for the left.

[Erik]

Sounds like Obama is throwing out red meat for the left.

He needs to, or a bunch of them are gonna stay home from the polls next year.

[B-Fly]

Anyone have thoughts on the Buffet Rule? Sounds like Obama is throwing out red meat for the left.

But with significant appeal to the working class/middle class as well.

And now he's brought the Jews back into the fold, too.

[nots]

He, and more importantly, the country, would be better served if he would put the full weight of the Oval Office behind the policy crafted by the Simpson-Bowles group. This policy has bipartisan senatorial support and woulkd go a long, long way to solving our countries financial problems.
But.... yeah!!! A red meat for the base speech! Woo-hoo!!!

[cardboardbox]

I think for now at least, investment taxes shouldnt be raised but if I'm the repubs running the House, I'd allow the millionaires' and billionaires' non-investment income to be taxed at the same effective tax rate as the upper middle class, maybe 25%? But I'd only do this after cutting spending and getting the deficit back to the Bush levels.

Or we could just go with a Huntsman type plan where all deductions/loopholes are removed and the tax brackets are reduced. That makes a lot more sense to me.

[OaklandA's]

He, and more importantly, the country, would be better served if he would put the full weight of the Oval Office behind the policy crafted by the Simpson-Bowles group. This policy has bipartisan senatorial support and woulkd go a long, long way to solving our countries financial problems.

Bi-partisan support, or no support? Even most of the commission members said they wouldn't vote for it. The Democrats said the ratio of cuts to revenue increase was too lopsided. Many Republicans rejected it outright because it would violate their "no tax increases" pledge.

[nots]

Bi-partisan support, or no support? Even most of the commission members said they wouldn't vote for it. The Democrats said the ratio of cuts to revenue increase was too lopsided. Many Republicans rejected it outright because it would violate their "no tax increases" pledge.

I'd say a plan supported by both Kent Conrad and Dick Durban has pretty wide bipartisan support.
11 of the 18 commission members supported the plan--it needed 14 to move on. All in all a very solid starting point for debate--a lot more solid than the President's laughable attempt at portraying how strong he is or the GOP's worthless obstructionism.

[nots]

Maybe you or someone else can answer this for :

Why on earth, despite the fact that they've proclaimed to look into revenue increases from just about any available source, have they determined the financial sector to be off limits for revenue solutions? This despite t fact that our terrible situation stems directly from that sector in the first place?

Wait, I know. The esteemed Senator Bowls is a board member of Morgan Stanley. I'm certainly reserving judgment before I throw the full weight of anything behind these guys.

And what policy do you refer to? Or do you merely refer to the commission that Obama himself formed?

Edit: apologies for the crappy spelling and such. Using my phone from a ghetto wifi connection is a real beotch.

Policy was the wrong word--should have been proposal or recommendations.
If you are asking 'do I think stock trades should be taxed?'--I do but I think it's a non-starter with both parties.
If you mean something else, please clarify.
Finally, I didn't realize Bowles was working for Morgan Stanley but i don't think that invalidates the commission's work. Good luck finding a politician that doesn't go into lobbying or working on Wall Street when they aren't in office anymore.

[heyelander]

"Death Tax" question...

I understand the argument of not taxing income twice, but If someone dies with substantial stock holdings and it go to their heirs, isn't the capital gains baseline reset to where you acquire it? So my dad buys stock at $10 a share, 30 years later he dies and I get the stock which is now worth $100 a share. If I then sell soon after, no one ever pays any tax on the $90/share. Correct?

[nots]

http://www.cepr.net/index.php/blogs/...cit-commission

That's pretty much what I was making mention of.

I also happen to think, probably unsurprisingly, that the focus of all these super rich fukkers continues to be on entitlements --- make the poor, who are becoming poorer every passing day as the wealth divide increases, pay the priice for the transgressions of the very rich. Sure, there is some pain that needs to be shared, but I believe strongly that those best equipped to deal with that pain should bear the majority of it.

I mean no disrespect here because your ideals are noble, but I don't believe what you propose has any chance of happening.