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Billionaire debunks "job creator" myth.
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Posted: 5/18/2012 11:33 AM
Billionaire debunks "job creator" myth.
And says we should tax the rich to subsidize investments for the poor and middle class.
Great speech - watch it.Some highlights: Since 1980 the share of income for the richest Americans has more than tripled while effective tax rates have declined by close to 50%.
If it were true that lower tax rates and more wealth for the wealthy would lead to more job creation, then today we would be drowning in jobs. And yet unemployment and under-employment is at record highs. Indeed. And, We've had it backward for the last 30 years. Rich businesspeople like me don't create jobs. Rather they are a consequence of an eco-systemic feedback loop animated by middle-class consumers, and when they thrive, businesses grow and hire, and owners profit. That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.
Socialist.
Last edited 5/18/2012 11:34 AM by VandyBruin
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Posted: 5/18/2012 12:56 PM
Re: Billionaire debunks "job creator" myth.
I don't believe the poverty rate in this country has changed in the last 50 years or so, despite the big government policies and billions, if not trillions, spent.
Despite the best of intentions to help the poor, most government programs are wasteful, don't work, distort incentives, and end up being money not well spent. There are too many unintended consequences, all negative in nature, that go along with most government programs.
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Posted: 5/18/2012 1:30 PM
Re: Billionaire debunks "job creator" myth.
I don't believe the poverty rate in this country has changed in the last 50 years or so, despite the big government policies and billions, if not trillions, spent.
Your "belief" is dead wrong -- as you could've discovered for yourself with something called Google. The poverty rate is about 50% less of what it was in 1962 -- and among the elderly, about 75% less.
But I know conservatives like to cling to their "beliefs" -- facts be damned.
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Posted: 5/18/2012 1:42 PM
Re: Billionaire debunks "job creator" myth.
http://www.economicsjunkie.com/us-poverty-rate-how -the-great-society-programs-reversed-its-decline/
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Posted: 5/18/2012 3:01 PM
Re: Billionaire debunks "job creator" myth.
But Bruin, you're missing the much bigger point which is our current tax code. "Raising taxes on the rich" is nothing more than a liberal rallying call. Even if they do increase tax rates on the rich, very little will change. Why? Because people with lots of money to spend will commit more money towards legal resources that will allow them to find loopholes in our tax code and avoid paying taxes.
Warren Buffet should not - by our tax laws - be paying a lesser tax rate than his secretary. If he is, that means that he is avoiding the tax rate that he is legally obligated to be paying. So, how will raising his tax rate - that he already doesn't pay - solve the problem. It is - like so many leftist solutions - designed to pull the heartstrings of middle class Americans and win their votes and allow the government to continue functioning while creating the illusion that they are doing something when they really aren't.
The ONLY solution is a total reform to our absurd tax code, which I have yet to hear President Obama or any leading democrat propose. Why? Because it takes away their ability to play to the foolish emotions of the American voter.
Finally, if leftist policies are so great for the economy, why has our current recovery been so slow - even virtually non-existent? Why is the poverty rate the highest it's been since 1993? Why is our debt out of control?
Bottom line is that the best way to put money into the economy is not to take it out in the first place, which is more or less what taxes do. Cut spending and leave money in people's pockets. It allows Americans to invest in businesses, which is what ultimately creates jobs.
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Posted: 5/18/2012 3:12 PM
Re: Billionaire debunks "job creator" myth.
Buffet's numbers are totally misleading. There is a double taxation of dividends. Those dollars are first taxed at the corporate rate of 35%. Then at the individual rate for the first year, I believe. If the individual holds the stock more than a year the tax rate drops to 15%. The real net tax is something like 46%.
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Posted: 5/18/2012 3:16 PM
Re: Billionaire debunks "job creator" myth.
I agree with Nik. I don't believe the government should be in the business of trying to regulate or control the macro economy. But if they do, they should stimulate (and run deficits) by lowering taxes.
People are better off when they spend money on things they want. Producers in the free market will then go to work to meet the demand.
When the government intervenes, first off government and bureaucracy are inherently wasteful and inefficient. Secondly, the money gets spend in areas based on political preference. Politicians are deciding how dollars are spend, typically to further their own political ambitions. This spending clearly does not serve the public compared to the benefits people obtain by spending their own money on things they actually want.
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Posted: 5/18/2012 3:18 PM
Re: Billionaire debunks "job creator" myth.
I also believe it is a myth the rich aren't paying any federal taxes. Sure they can deduct state and local taxes, as well as charitable contributions. Most loopholes at best serve to lower their tax bill. But I guarantee you there aren't many people using loopholes to escape federal taxes. In addition, the AMT hits a lot of people (and it needs to be revised because it wasn't indexed for inflation and now hits too many middle class people).
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Posted: 5/19/2012 4:50 AM
Re: Billionaire debunks "job creator" myth.
doreking wrote: I also believe it is a myth the rich aren't paying any federal taxes. Sure they can deduct state and local taxes, as well as charitable contributions. Most loopholes at best serve to lower their tax bill. But I guarantee you there aren't many people using loopholes to escape federal taxes. In addition, the AMT hits a lot of people (and it needs to be revised because it wasn't indexed for inflation and now hits too many middle class people). You got your myth wrong. It's half of large corporations, not 'the rich', that pay zero taxes. Moreover, vunik (I think it was) is incorrect when he says that Buffett "shouldn't be paying a lower tax rate than his secretary". He should be, according to our tax laws, because his income is primarily in the form of capital gains, not salary, & is therefore taxed at the 15% capital gains rate. They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
Last edited 5/19/2012 12:14 PM by vebiltdervan
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Posted: 5/19/2012 7:04 AM
Re: Billionaire debunks "job creator" myth.
vunik wrote: But Bruin, you're missing the much bigger point which is our current tax code. "Raising taxes on the rich" is nothing more than a liberal rallying call. Even if they do increase tax rates on the rich, very little will change. Why? Because people with lots of money to spend will commit more money towards legal resources that will allow them to find loopholes in our tax code and avoid paying taxes.
The ONLY solution is a total reform to our absurd tax code, which I have yet to hear President Obama or any leading democrat propose. Why? Because it takes away their ability to play to the foolish emotions of the American voter.
I'm sorry, but it is equally true that "raising taxes won't change anything" is a conservative rallying call to oppose tax increases they don't want. Let's just be logical about it for a minute -- if raising taxes wouldn't actually make people pay more money, then why is the GOP (and other rich people) so adamantly and vociferously opposed to it? It's not all ideological ... they don't want taxes to be raised because they don't want to pay more money. You are right that the tax code needs to be reformed, and loopholes eliminated. But let's not pretend this is a democrat only problem. Like so many other things in Washington these days, anything the Dems propose, the GOP opposes on principle, and mostly vice versa too. Remember a year or so ago Obama campaigned to try to eliminate the carried interest loophole on hedge fund managers? The GOP called it a "tax increase" and deemed it unacceptable. |
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Posted: 5/19/2012 7:53 AM
Re: Billionaire debunks "job creator" myth.
vunik wrote: ..."Raising taxes on the rich" is nothing more than a liberal rallying call...
And I'd like to add one additional point to the reply comments to vunik's post, & that is that contrary to popular opinion, the recent calls to "raise taxes on the rich" is not a permanent or even long-standing plank in the liberal platform. It's a specific call to roll back a portion of the relatively recently-enacted Bush tax cuts, in the specific face of A) the enormous run-up in national debt of the last decade, & B) the 'Great Recession' that began in late 2006-early 2007. It's a call to return to certain levels of taxation that prevailed a mere 11 years ago, which was hardly a time when the rich were being utterly soaked in order to socialistically transfer their wealth en masse to the poor. They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 5/19/2012 8:54 AM
Re: Billionaire debunks "job creator" myth.
mathknapp wrote:
vunik wrote: But Bruin, you're missing the much bigger point which is our current tax code. "Raising taxes on the rich" is nothing more than a liberal rallying call. Even if they do increase tax rates on the rich, very little will change. Why? Because people with lots of money to spend will commit more money towards legal resources that will allow them to find loopholes in our tax code and avoid paying taxes.
The ONLY solution is a total reform to our absurd tax code, which I have yet to hear President Obama or any leading democrat propose. Why? Because it takes away their ability to play to the foolish emotions of the American voter.
I'm sorry, but it is equally true that "raising taxes won't change anything" is a conservative rallying call to oppose tax increases they don't want. Let's just be logical about it for a minute -- if raising taxes wouldn't actually make people pay more money, then why is the GOP (and other rich people) so adamantly and vociferously opposed to it? It's not all ideological ... they don't want taxes to be raised because they don't want to pay more money.
You are right that the tax code needs to be reformed, and loopholes eliminated. But let's not pretend this is a democrat only problem. Like so many other things in Washington these days, anything the Dems propose, the GOP opposes on principle, and mostly vice versa too. Remember a year or so ago Obama campaigned to try to eliminate the carried interest loophole on hedge fund managers? The GOP called it a "tax increase" and deemed it unacceptable. You don't think it possible that they might be opposed to it because it won't work? I don't know many statistics on it, but I believe that when even the Secretary of Treasury is cheating on his taxes and finding ways NOT to pay the full amount, it goes without saying that raising tax rates isn't necessarily the issue. A tax rate increase is not going to be fully effective until the tax code is simpler and actually forces people to pay their taxes. Raising taxes without tax code reform is like throwing a band-aid on a mortal wound, it's not going to solve the problem. I am opposed to raising taxes not only because it won't really work, but also because the government spends too much money. Like I said in a previous post, the way to a healthy economy is to not take money out of the economy. When the government wastes our money, that's what they do...take it out of the economy. In response to dervan, "tax the rich" has been Obama's rallying call since 2008. Instead of taking blame for an absurd deficit, a (likely to be deemed) unconstitutional healthcare law, a failing economy, and so on, he claims "taxing the rich" will solve the problem. To think that all we need to do is raise taxes on those making over $250,000/year will magically make all of our problems disappear is absurd. It's nothing more than trying to make people vote with their emotions, not their brains. And just to be perfectly clear, the GOP is just as guilty of this as the democrats. Every politician does this, unfortunately. And, if Obama is so intent upon raising taxes on the "rich" (depending on where you live, a family making $250,000 is not necessarily rich), why didn't he do so his first two years in office, when he had a liberal Congress and Senate? Come to think of it, Obama has absolutely no reason to be complaining about a lack of Republican support, when he had two years to do whatever he wanted without needing ANY Republican support. But he didn't. And the blame falls squarely on his own shoulders.
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Posted: 5/19/2012 8:58 AM
Re: Billionaire debunks "job creator" myth.
Does anyone care to respond to the fact that dividends are double taxed, so the effective rate is more like 46% rather than 15%? Further, based on what I know about Buffett I would think most of is income is from dividends, rather than capital gains.
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Posted: 5/19/2012 9:52 AM
Re: Billionaire debunks "job creator" myth.
vunik wrote:
You don't think it possible that they might be opposed to it because it won't work? I don't know many statistics on it, but I believe that when even the Secretary of Treasury is cheating on his taxes and finding ways NOT to pay the full amount, it goes without saying that raising tax rates isn't necessarily the issue. A tax rate increase is not going to be fully effective until the tax code is simpler and actually forces people to pay their taxes. Raising taxes without tax code reform is like throwing a band-aid on a mortal wound, it's not going to solve the problem.
And I'm not saying you are entirely wrong here. Yes, rich people avoid taxes, and work hard to do so. And yes, I agree we need tax code reform. And, yes, I agree that raising rates without tax code reform is a band-aid ... but I'd rather a band-aid than wait to bleed out. If raising taxes doesn't do anything, then why did we lower taxes? That wouldn't have accomplished anything either by the same logic. It simply doesn't compute.
And, if Obama is so intent upon raising taxes on the "rich" (depending on where you live, a family making $250,000 is not necessarily rich), why didn't he do so his first two years in office, when he had a liberal Congress and Senate? Come to think of it, Obama has absolutely no reason to be complaining about a lack of Republican support, when he had two years to do whatever he wanted without needing ANY Republican support. But he didn't. And the blame falls squarely on his own shoulders.
Part of the reason he didn't do this is his plan to raise taxes was to allow the Bush tax cuts to expire ... that didn't happen until he lacked support of the house. Also, one of the things I like most about Obama ideologically (though it is sometimes a weakness for him politically) is that he is very careful, measured, and considered. He rushes in to nothing. He makes decisions only after exploring issues and being sure of what he wants. This is good, but it also makes him slow to act, and I think a lot of the early criticisms about him "doing nothing" early in his presidency were a result of his careful planning. This definitely backfired on him. Alas. |
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Posted: 5/19/2012 10:16 AM
Re: Billionaire debunks "job creator" myth.
vebiltdervan wrote: doreking wrote: I also believe it is a myth the rich aren't paying any federal taxes. Sure they can deduct state and local taxes, as well as charitable contributions. Most loopholes at best serve to lower their tax bill. But I guarantee you there aren't many people using loopholes to escape federal taxes. In addition, the AMT hits a lot of people (and it needs to be revised because it wasn't indexed for inflation and now hits too many middle class people). You got your myth wrong. It's half of large corporations, not 'the rich', that pay zero taxes.
Moreover, vunik (I think it was) is incorrect when he says that Buffett "shouldn't be paying a lower tax rate than his secretary. He should be, according to our tax laws, because his income is primarily in the form of capital gains, not salary, & is therefore taxed at the 15% capital gains rate. Nearly half of households pay no income tax. You can look it up. This is a tremendous moral hazard. I know a fair amount about taxes, I don't believe corporations are not paying taxes. Our corporate tax, however, is an income tax, so businesses that aren't making money don't pay. There have been a lot of losses, especially in finance, in this economy. I do agree we need to throw out the tax code and have something simpler, more like a flat tax. We should never have special deductions or credits. Businesses, however, will always deduct business expenses and cost, and therefore businesses taxes won't be as simple as for individuals. However, the corporate tax rate is too high, and any special deductions should be eliminated and replaced with lower marginal rates. Maybe 15 or 20%.
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Posted: 5/19/2012 1:24 PM
Re: Billionaire debunks "job creator" myth.
doreking wrote:
vebiltdervan wrote: You got your myth wrong. It's half of large corporations, not 'the rich', that pay zero taxes... Nearly half of households pay no income tax. You can look it up. This is a tremendous moral hazard...
Wow, these goalposts are jumping all over the place! First you state, as if it were something factual, that liberals claim that half of all "the rich" pay no taxes. When I advance the idea that you may be confusing some other, real claim with this claim that I've only heard you -- as distinct from any liberals -- make, you reply that half of all households pay no income tax. That's true, but it has zero bearing on "the rich", which is where you started. For what it's worth, a sizeable percentage of those households that pay no income tax STILL pay taxes at a higher rate than millionaires & billionaires, thanks to the non-progressive payroll taxes that they do pay. So if low taxes are a moral hazard to the poor, are they not logically an even greater moral hazard to the extremely wealthy who pay even less, percentage-wise? doreking wrote:...I know a fair amount about taxes, I don't believe corporations are not paying taxes...
Don't take my word for it. Take Reuters: 30 profitable members of the Fortune 500 paid zero taxes in 2008-2010. Including GE, PG&E Corp, Computer Sciences Corp, Boeing Co and NiSource. The average actual tax rate paid by the 280 members of the Fortune 500 studied for those years was 18.5%.
And no, I'm not claiming that 30 is half of 500 or 280. I'm not claiming that 50% of all corporations pay no taxes. But I have heard that claim advanced, however falsely, by some on the left who have trouble with numbers. So I thought you might have confused half-tax myths.
Moreover, for what it's worth, there's a movement among a substantial percentage of progressives (including me) in favor of dispensing with corporate taxes altogether. Not as high percentage-wise as among libertarians, but the point is that not every liberal paints all corporations black, or wishes them ill. I'm sorry if that complicates your nice simplified weltanschauung (worldview). Gotterdammerung!
I will also reply (briefly), to your proposal that the wealthy are paying a "double tax" when they pay capital gains taxes. There's nothing unique about accrued stock values with respect to the taxes paid by the corporation in question. All you have to do is to purchase a Bic pen, and you have helped to pay Bic's corporate taxes. I daresay that purchasers of Bic pens & razors pay far more of Bic's taxes than do Bic's shareholders. But it would be completely silly to claim, upon buying a Bic pen, that you have therefore paid 35% corporate taxes on it, on top of whatever sales tax you actually did pay. You paid your tiny, incremental share of Bic's corporate tax bill, somewhere around 10 to the negative log avogadro's number percent.
vunik wrote:...In response to dervan, "tax the rich" has been Obama's rallying call since 2008. Instead of taking blame for an absurd deficit...a failing economy, and so on, he claims "taxing the rich" will solve the problem...A minor semantic quibble here in part, perhaps: I was (& am) considering 2008 to be "recent", much younger than a longterm or permanent plank of the liberal platform. In fact, 2008 was by almost all accounts more recent even than 2001-2002, which is when the Bush tax cuts were enacted & took effect. Ergo, it fits rather easily within my point, viz. that the call to raise taxes on the wealthy is merely a movement to restore rates to their pre-2002 level. Now, if you actually trouble to seek out Obama's words, I think you'll find a dearth of claims there that raising taxes on the wealthy will "solve our problems"; rather you'll find the perfectly legitimate argument that slashing them contributed to our problems, & therefore that raising them back will not only CONTRIBUTE towards a solution, but can also be viewed as more equitable. You can (& obviously do) disagree with that latter idea, but you cannot deny (without weaving a sophist or specious argument) that it would be a contribution toward lowering the deficit, just as its slashing was a contribution toward exploding it skywards (underground-wards?). As for the current deficit being "absurd", the most absurd deficit the US ever truly ran up was the one to pay for WWII. And yet oddly, that worked out OK economically, did it not? Commonsense, when it comes to economics, is overrated. Herbert Hoover showed wonderful commonsense. The European Union right now is showing very fine commonsense. They are commonsensing themselves right into oblivion. And maybe us with them. They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 5/19/2012 2:13 PM
Re: Billionaire debunks "job creator" myth.
Corporations don't pay taxes. People do. It probably would make more economic sense to not tax corporations at all and instead tax money when distributed to shareholders.
Your point does have some validity regarding pens. From a financial standpoint, when people invest their money is going to work and deserves return or compensation, otherwise we'd have no capital investment. So a company must factor in taxes and regulations and pass those costs onto consumers in order to generate a reasonable return on capital. Otherwise why bother investing and pooling capital to create corporations.
I also believe taxes should be neutral and not distort economic choices. So I have a problem with punishment of investing, with dividend and capital gain taxation, yet we subsidize all kinds of debt, including but not limited to the mortgage deduction.
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Posted: 5/19/2012 2:19 PM
Re: Billionaire debunks "job creator" myth.
The moral hazard related to the near 50% who pay no taxes means they have no incentive whatsoever to contain or vote to contain government spending, as they receive benefits yet pay nothing.
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Posted: 5/19/2012 2:41 PM
Re: Billionaire debunks "job creator" myth.
doreking wrote: The moral hazard related to the near 50% who pay no taxes means they have no incentive whatsoever to contain or vote to contain government spending, as they receive benefits yet pay nothing. Oh, no you don't! You can't claim that they "pay nothing". The very large majority of those who pay zero US INCOME TAX are working & therefore paying payroll taxes to the US gov't. They're also paying other forms of tax: state, city, local, whatever, just not to the feds. Like I said, a considerable number of these folks (I have no idea what percentage) actually are paying a higher percentage of their income to the feds (in the form of payroll taxes taken from their paychecks) than do wealthy individuals who pay primarily capital gains tax rates. So I stand by my 'moral hazard' objection on behalf of lots of these folks. There are many more who are paying taxes to the feds -- just not income tax money, 'cause they don't make enough income -- than there are who are not working, & just like living on the dole. They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 5/19/2012 3:26 PM
Re: Billionaire debunks "job creator" myth.
I think you're wrong. Social security and medicare are different than income taxes. Also, the way manner in which taxes are withheld, people never see those dollars and fail to understand and appreciate how much they pay in taxes. They don't write the checks, and then get a refund at the end of the year.
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