| Author | Message | ||
     Ft_bstrd |
The problem with taxing repatriated assets is that it discourages corporations from bringing the profits home where they can be reinvested or paid out as dividends. It forces the profits to be reinvested overseas. Lower the corporate tax rate to 20-25%, lower the capital gains rate to 0%, eliminate the tax on repatriated funds. | ||
| Ft_bstrd |
Buffett is dishonest. Part of his plan is in eliminating competition for investment. When more people have more investable assets, the price of investment opportunities increases as they are being bit upward. THIS is what drives the stock markets. It isn't just the performance of the individual companies that drives the price per share higher but the number of people looking to purchase bidding competitively. Buffett knows that if he can keep the number of people with surplus capital low, he can scoop up investments with less competition. He is scum. He's no better than George Soros working to topple governments so that he can bet against their currency. | ||
| Sifo |
Sifo: You are kind of misstating the debate, in my opinion. Say Mr. X has $1.00. He has the option to (1) spend it; (2) put it in his sock drawer; or (3) invest it. Our economy likes the spending option and the investing option, but not so much the sock drawer option. This debate is about the investing part. The conservative theory is that the degree to which folks will invest money they already have has an inverse relationship to the amount that their return on investment will be taxed. So, back to Mr. X. Assume that his return on investment before taxes is 30%, turning his $1.00 into $1.30 if he invests it. But then the taxes come in. If his taxes are 10% of what he earned from his investment, his $1.30 is reduced to $1.27. If his taxes are reduced to $1.21, etc. The conservative mantra is that the higher his taxes go, the less his ultimate return on investment is, and the less likely he is to chose the invest option for the $1.00 he started with in the first place over the spending and saving option (because it gets less and less worth it for him to do so). Apparently Old Warren believes that people will invest the dollar they already have at the same rate whether they expect to end up with $1.23 or $1.20 or $1.26 or etc. I'll take it from him, given that he has more experience deciding what to do with large sums of money than I do. Who's position did I misstate? I was simply stating my own opinion on this matter, which you have then misrepresented. I pointed out that each dollar the government takes from me in taxes is a dollar that I can't invest. You simply changed the amounts so that the government has taken 3 cents. That 3 cents is still 3 cents that I can't invest though. As for Tyler, I would say that if he thinks he should pay more then I would fully support him cutting a check to the government. Him saying I need to pay more because he feels he should pay more, but won't unless I have it taken from me seems pretty unfair though. There's plenty that I don't know about Tyler's situation so I really have no opinion on what his tax situation should be. For a disabled person who has found a way to prosper, I would say they should pay, just like the rest of the 51% of us. That 51% number needs to grow much higher. If you don't have 80% of households paying something, then things are really failing in some way - BIG TIME! | ||
| Sifo |
The problem with taxing repatriated assets is that it discourages corporations from bringing the profits home where they can be reinvested or paid out as dividends. It forces the profits to be reinvested overseas. Exactly! There's a huge pool of cash overseas that will never be repatriated because of the huge tax hit. Drop corporate income tax completely and that cash can be reinvested here in the US helping our economy raising our tax revenues. It's a win for everybody except those who wan to demonize corporations. | ||
| Ft_bstrd |
Sifo: You are kind of misstating the debate, in my opinion. Say Mr. X has $1.00. He has the option to (1) spend it; (2) put it in his sock drawer; or (3) invest it. Our economy likes the spending option and the investing option, but not so much the sock drawer option. This debate is about the investing part. The conservative theory is that the degree to which folks will invest money they already have has an inverse relationship to the amount that their return on investment will be taxed. So, back to Mr. X. Assume that his return on investment before taxes is 30%, turning his $1.00 into $1.30 if he invests it. But then the taxes come in. If his taxes are 10% of what he earned from his investment, his $1.30 is reduced to $1.27. If his taxes are reduced to $1.21, etc. The conservative mantra is that the higher his taxes go, the less his ultimate return on investment is, and the less likely he is to chose the invest option for the $1.00 he started with in the first place over the spending and saving option (because it gets less and less worth it for him to do so). Apparently Old Warren believes that people will invest the dollar they already have at the same rate whether they expect to end up with $1.23 or $1.20 or $1.26 or etc. I'll take it from him, given that he has more experience deciding what to do with large sums of money than I do. I think you are also missing the issue here. There are two tax systems in place, earned income and unearned income. Buffett is advocating an increase in all taxation including earned income. He KNOWS the majority of his income is unearned rather than earned income. Under this scenario Sifo is absolutely correct. If the tax rate on earned income rises from 34% to 44%, on $100,000 of earned income, the individual has $10,000 LESS. Whether he would have spent it, invested it, or stuck it in the sock drawer, the government has confiscated it and he no longer has any use of it. The issue here is risk vs. reward. Investing involves significant risk. The benefit of taking those risks, the risk of losing some or all of your investment, is rate of return. The greater the tax rate on those returns, the lower the benefit of taking those risks. The higher the tax rate the lower the appetite for investment. Conversely, the higher the tax rate the greater the appetite for tax sheltering investments and the more effort and expense people are willing to expend to avoid taxation. Since I sell legal tax avoidance strategies, higher taxes result in more opportunities for me. It is absolute stupidity to believe that assets confiscated from the open market do not result in slower growth of the market and less investment in general. | ||
| Honolulu_blue_esq |
Sifo: Here is the copy and paste from above: Fahren: "And he made another excellent, direct observation that higher taxes do not deter the wealthy from investing." You: "This statement is so false that a grade schooler could understand it. If I have a dollar that I can invest but the government takes that dollar away, how much will I invest? This isn't rocket science." Enter me: "Sifo: You are kind of misstating the debate, in my opinion. Say Mr. X has $1.00. He has the option to (1) spend it; (2) put it in his sock drawer; or (3) invest it. Our economy likes the spending option and the investing option, but not so much the sock drawer option. This debate is about the investing part. The conservative theory is that the degree to which folks will invest money they already have has an inverse relationship to the amount that their return on investment will be taxed. So, back to Mr. X. Assume that his return on investment before taxes is 30%, turning his $1.00 into $1.30 if he invests it. But then the taxes come in. If his taxes are 10% of what he earned from his investment, his $1.30 is reduced to $1.27. If his taxes are reduced to $1.21, etc. The conservative mantra is that the higher his taxes go, the less his ultimate return on investment is, and the less likely he is to chose the invest option for the $1.00 he started with in the first place over the spending and saving option (because it gets less and less worth it for him to do so). Apparently Old Warren believes that people will invest the dollar they already have at the same rate whether they expect to end up with $1.23 or $1.20 or $1.26 or etc. I'll take it from him, given that he has more experience deciding what to do with large sums of money than I do." Then here you come again: "Who's position did I misstate?" No ones. You misstated the debate. "I was simply stating my own opinion on this matter, which you have then misrepresented." How did I misrepresent your opinion? "You simply changed the amounts so that the government has taken 3 cents. That 3 cents is still 3 cents that I can't invest though." No. I explained what this debate was about. It is about taxes acting against investment thinking. It is not about whether someone can invest a dollar they don't have (or 3 cents). | ||
| Ft_bstrd |
Exactly! There's a huge pool of cash overseas that will never be repatriated because of the huge tax hit. Drop corporate income tax completely and that cash can be reinvested here in the US helping our economy raising our tax revenues. It's a win for everybody except those who wan to demonize corporations. Add to that the fact that the US can't be as competitive in seeking foreign investment. Foreign companies want American workers. We are the best trained and most productive on the planet. The problem is that creating a company in the US requires paying the US tax rate. It makes foreign companies domiciled in the US uncompetitive vs. investing elsewhere. If we lower our corporate tax rates, we make US investment viable again. Add to that the fact that it also raises the wage base for the middle class and increases opportunities for lower class to rise to middle class. The greater the competition for labor, the higher wages rise. | ||
| Fahren |
How heart-warming to think of those patriotic corporations (they are people now, remember?) just yearning to be able to re-invest their profits back into the growth of the US economy! My flag flutters at the thought of GE, Apple and all the rest just a-hankerin' to bring those jobs all back "home." Just like the TARP money and other bailouts were meant to be reinvested here at home. It wasn't supposed to go to overseas banks. It wasn't meant to fund outlandish bonuses. Yessir, those patriotic, salt-of-the-earth banks worked so hard to reinvigorate US businesses and families with the TRILLIONS (yes, that's plural - see here: http://online.wsj.com/article/SB123851108664173877 .html) of bailout money printed by their cronies who run the Fed and the Treasury. The coyotes have put the foxes in charge of guarding the chickens against attacks by weasels. | ||
| Mtjm2 |
 YOU HAVE TO PASS THIS BEFORE YOU READ IT !! | ||
| Sifo |
No. I explained what this debate was about. It is about taxes acting against investment thinking. It is not about whether someone can invest a dollar they don't have (or 3 cents). And I simply pointed out that any money taken via taxes, whether it be a buck, 3 cents or any other amount, is not available to be invested. That is by definition, taxation preventing investment. Really a child can understand that. | ||
| Fahren |
And I simply pointed out that any money taken via taxes, whether it be a buck, 3 cents or any other amount, is not available to be invested. That is by definition, taxation preventing investment. Really a child can understand that. Yes, that is logic at a child's level. Meanwhile, we are discussing adult investors, where such child-like simplifications do not suffice; where those who have significantly more than "a buck or 3 cents" to invest, and who, according to Mr. Buffett, are not afraid of investing if they believe the investment to be sound, operate. | ||
| Sifo |
The thing is that regardless of how badly a person wants to invest, they can't invest money that has been confiscated via taxation. It just isn't possible. The question is how much money are we talking about? Is it enough to solve our debt issues? Not even close! Is it enough to stimulate the economy? I would say that's open to debate. This conversation however, as was pointed out is about will higher tax rates prevent people from investing. I still maintain that you can't invest what has been taken from you. A child can still understand that. | ||
| Ft_bstrd |
What do the wealthy do with their money? | ||
| Fahren |
I still maintain that you can't invest what has been taken from you. A child can still understand that. Sifo, in the context of this discussion, your example is only right if you believe that higher taxation will take away all profit, and leave the very, very wealthy with no money at all to invest. I suppose if you jacked up the tax rate high enough, then that would be the case, but nobody is talking about that kind of extremism. So again, let's get beyond the over-simplified examples to look at the actual situation. | ||
| Fahren |
Sifo, I agree that the higher taxation, either of the poor or of the uber-rich, will do very little to impact the real debt problem we have before us. That is why I find these debates "fiddling, while Rome burns." They are conveniently divisive distractions that work well to keep the people distracted, and therefore down. | ||
| Sifo |
It's not that they will have no money to invest. It's that they will have less money to invest. Less to invest means less invested. Any level of taxation will do this. Higher tax rates will do it more than lower tax rates. | ||
| Patrick2cents |
interesting... I think I understand the confusion about taxes on the proceeds from investments vs. taxes on potential funds for investment. BUT, consider that the difference between a $25 trade and a $5 trade has had a HUGE impact (through online brokerages like etrade) on the amount/frequency that individuals invest. I know that trade fees actually impact both proceeds and funds; but lets consider it in light of risk. One big measure of the wisdom of an investment is the risk vs reward (there are even numbers that are associated with that thought) so if we tax the reward, that ratio changes (sometimes dramatically) which changes the outlook of ALL investments. It is such a foolhardy statement to make, saying that changes on the capital gains (and other) tax won't affect investments! | ||
| Cityxslicker |
cheer up, claw back is coming. There necessarily HAS to be a reset and a redistribution; and it will be from you, not them. You will notice that when ever 'they' talk about for the 'good of all' they usually mean yours, and never theirs. Al Gore still flying around in his Jet ? Still living in multi thousand sq ft houses ? It is never their wealth they want to redistribute. This is not the Hope or Change you seek. | ||
| Ulyranger |
W. Buffy is a tool, uber-rich tool but a tool none the less. That the so-called "media" worships this guy as some kind of truthsayer is truly sad. He lied, openly in the interview (misrepresenting those tax rate comparisons when he KNOWs the difference is not being truthful) and we're all just supposed to bow down to his wisdom. He is smart, no question, but I agree with the post above that he is saying all this for his own profit. Either in dollars or power or both. The "reporter" is equally guilty here, for not calling him out on the misrepresentation of the "facts". Sadly, not enough pay attention to the real facts and are more than eager to gobble up the class warfare free happy meal. It's tragic how we demonize Maddof for bilking investors but we allow our employees to get away with a much worse ponzi scheme....... | ||
| Sifo |
So Buffett also said that the S&P downgrading our credit rating didn't make sense. Frankly I'm surprised they didn't downgrade us earlier. They did give a warning of what had to be done to avoid the down grade though. We failed to do what they said. They down graded us. Big surprise! It would take a fool to not be able to see that our debt to GDP ratio has been changing rapidly in a bad direction. | ||
| Ft_bstrd |
Odd that Buffett is the ONLY wealthy person progressives will listen to. Could it be because his message is what they want to hear? | ||
| Honolulu_blue_esq |
Odd that Buffet is the ONLY wealthy person conservatives won't listen to. Could it be because his message contradicts what they want to hear? | ||
| Ft_bstrd |
I listen to him. He is just the contradictory voice. If he were correct, more would be echoing his advice. I can virtually guarantee you that if there is "a billionaire recommends higher taxes", Buffett will be the source of the quote. | ||
| Notpurples2 |
Lower the corporate tax rate to 20-25%, lower the capital gains rate to 0%, eliminate the tax on repatriated funds. Ok, but only if these businesses are actively creating jobs in the US. The right loves the term "job-creators" so there really should be some "Job-Creator" tax incentives. The more american workers a company employs, the less they should have to pay. It makes sense because they're paying the wages of people paying taxes. But only for companies employing and growing in the US. There shouldn't be any loopholes for them to get the tax breaks without creating the jobs. Putting taxes and tariffs on imported goods would be another way to encourage reinvestment in america but to do that right now would hurt the lower class. Right now cheap imported goods are keeping some families afloat when they're down to little to no income. So if we can't use the stick on the import goods maybe we can use a carrot for domestic production. (and later we can start using the stick on the companies that don't move back) We need manufacturing jobs here in the US. We've gutted the working class job market in the US. That great divide between the super-rich and the dirt-poor used to be filled with blue collar workers. People that weren't wealthy but made enough to provide for themselves and a family. I grew up in that kind of family; dad was a mechanic and mom was a clerk. Manufacturing jobs used to be the bread-and-butter of the middle class. The town where I grew up had a few small plants that employed a large portion of the residents. Of course they were closed long ago. If they were to re-open today I know there would be a line around the block of people wanting to work, even for low wages. | ||
| Ft_bstrd |
Putting taxes and tariffs on imported goods would be another way to encourage reinvestment in america but to do that right now would hurt the lower class. Right now cheap imported goods are keeping some families afloat when they're down to little to no income. So if we can't use the stick on the import goods maybe we can use a carrot for domestic production. (and later we can start using the stick on the companies that don't move back) Not to mention that it would destroy our ability to export goods to other markets. (See Smoot-Hawley) | ||
| Lightstick |
Do you mean the ability to export goods to someplace like India, China or Japan? Have you examined the tariff regulations they have for imports? | ||
| Cityxslicker |
The economy goes through various stages of development. At the frist contest it is based off the laborers and their creativity, but in an every increasing industrialization, globalization and technology innovation - their direct independent contribution is limited; they are then relegated to the trading of time for wage, monitary slave wh*re for currency doled out by their puppet masters head of the corporate entities. Their continued very existence and substinence dependant upon that chained servitude. At first instance of conflict the aggression will be against the individual that exploits them, then their corporate entities, then the rich as a class. They must and inevitably destroy and rip asunder that which enslaves them, ties their wealth to production and smash that machinery to pieces, set factories ablaze, destroy by force the current model vanquished past modes during the lecherous currency, and return to a guild of protected worker. A) Ayers B) Jones C) Mao D) Commentary on London's Riots E) Marx F) Obama G) Geitner H) Nepaloatono I) Sebalious J) all of the above | ||
| Fahren |
It might help to see the entire text that Buffett wrote as an op-ed piece for the NY Times, from which the OP culled a few quotes: http://www.nytimes.com/2011/08/15/opinion/stop-cod dling-the-super-rich.html?_r=1 | ||
| Reindog |
Wall St. Journal opinion piece from AUGUST 17, 2011 Warren Buffett's Tax Dodge The billionaire volunteers the middle class for a tax increase. Barney Kilgore, the man who made the Wall Street Journal into a national publication, was once asked why so many rich people favored higher taxes. That's easy, he replied. They already have their money. That insight is worth recalling amid the latest political duet from President Obama and Warren Buffett demanding higher taxes on "millionaires and billionaires." Mr. Buffett is repeating his now familiar argument this week, coinciding with Mr. Obama's Midwestern road trip on the economy. Since the media are treating Mr. Buffett as a tax oracle, let's take a closer look at some of the billionaire's intellectual tax dodges. • The double tax oversight. The Berkshire Hathaway magnate makes much of the fact that he paid only 17.4% of his income in taxes, which he considers unfair when salaried workers often pay more. But Mr. Buffett makes most of his income from his investments, in particular from dividends and capital gains that are taxed at a rate of 15%. What he doesn't say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%. This onerous tax on capital is a U.S. competitive disadvantage in the global economy, which is why Congress agreed in 2003 to cut the rates on dividends and capital gains. Even as the rest of the world is cutting tax rates on corporate income, Mr. Buffett wants to raise U.S. rates in a way that would make America less attractive for investment. Under a sensible tax reform, the feds would impose either a corporate tax or a dividend and capital gains tax, but not both. • The middle-class bait-and-switch. Like Mr. Obama, Mr. Buffett speaks about raising taxes only on the rich. But somehow he ignores that the President's tax increase starts at $200,000 for individuals and $250,000 for couples. Mr. Obama ought to call them "thousandaires," but that probably doesn't poll as well. The President needs to levy his tax increase at such a lower income level because that's where the money is. In 2009, 237,000 taxpayers reported income above $1 million and they paid $178 billion in taxes. A mere 8,274 filers reported income above $10 million, and they paid only $54 billion in taxes. But 3.92 million reported income above $200,000 in 2009, and they paid $434 billion in taxes. To put it another way, roughly 90% of the tax filers who would pay more under Mr. Obama's plan aren't millionaires, and 99.99% aren't billionaires. Mr. Buffett says it's only "fair" to raise his taxes, but he's lending his credibility to raising taxes on millions of middle-class earners for whom a few extra thousand dollars in after-tax income is a big deal. Unlike Mr. Buffett, those middle-class earners aren't rich and may earn $250,000 for only a few years of their working lives. How is that fair? • The charity loophole. For billionaires like Mr. Buffett, the single most important deduction in the tax code is for charitable giving. Middle-class earners can't give nearly as much money away to reduce their overall tax burden. Yet we don't hear Mr. Buffett calling for the elimination of that deduction in the name of fairness. Mr. Buffett has also already sheltered the bulk of his fortune from federal taxes by putting them into a foundation that will give the money away. That's an act of generosity, but if the government's purposes are so vital, why doesn't he simply give the money to the IRS? Rebecca Quick of CNBC put that question to Mr. Buffett in 2007. His answer: "Well, that's a choice and it's an option . . . If I had to give it to a single individual, or make some young Buffett a multibillionaire, or give it to the government, I'd absolutely give it to the government. I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government." Mr. Buffett is no doubt right about the relative efficiency of private donors, but should billionaire philanthropists get such a large tax preference? Another case of fairness? Mr. Buffett is one of the great stock-pickers of his time, and we don't begrudge him a single dollar of his wealth. We only wish that, having already made himself rich, he weren't so intent on making it harder for others to become rich too. If he's worried about being undertaxed, we'd suggest he simply write a big check to Uncle Sam and go back to his day job of picking investments. | ||
| Blake |
I'm confused, is the man for or against forcing folks to hand over more of their income to the gov't? From the above answer, it sounds like he's against it. So then, it seems that he's most in favor of forcing others to hand over more of the fruits of their efforts and ideas to the government, which seems pretty despicable to me. |
