Originally posted by KazetNagorra"And even if you were to keep current tax revenue flat, tax hikes for the rich could be used for tax breaks for the poor and middle class, and this would definitely create jobs."
I don't think Buffett is concerned with what the government is "able to get by" with (obviously the government could get by with far less than the current budget), but what works best for the US economy. And as Buffett rightly recognizes, having the rich pay a low nominal rate is bad for the economy. And even if you were to keep current tax revenue flat ...[text shortened]... be used for tax breaks for the poor and middle class, and this would definitely create jobs.
Whooooh. Almost half, all poor or lower middle class, pay no taxes (individual income taxes). A significant number get EITC which was increased by GWB. It is moral to transfer more money from one group to another? And finally, how does this move create jobs?
If you were looking for a job in the US, I dare say you would not be applying to one of those 47% who don't pay taxes. Whether seeking a job, or even starting a business, you'ld probably go where the money is, that is where people can afford a new product or service.
Originally posted by normbenignSay's law doesn't work, Norm.
"And even if you were to keep current tax revenue flat, tax hikes for the rich could be used for tax breaks for the poor and middle class, and this would definitely create jobs."
Whooooh. Almost half, all poor or lower middle class, pay no taxes (individual income taxes). A significant number get EITC which was increased by GWB. It is moral to trans ...[text shortened]... ld probably go where the money is, that is where people can afford a new product or service.
Moving income from those who will do nothing with it but gamble on things like credit default swaps to those who will purchase tangible items produced by the economy increases aggregate demand and creates jobs.
Originally posted by KazetNagorra"So tax policy (given some fixed revenue) has no impact on jobs created in the private sector? That's certainly an unorthodox position. And why should jobs not be relevant for determining tax policy?"
[b]I think Buffett is concerned with making money and having his name in the headlines increases his exposure for his fund. He'd be just as happy if his investment hurt the US as if it helped them.
That's perhaps a bit too cynical.
Raising tax on one group and cutting it on another is a distribution arguement -- but it certainly does not ...[text shortened]... ainly an unorthodox position. And why should jobs not be relevant for determining tax policy?
Raising taxes, that is taking money out of the productive economy is highly unlikely to create jobs. At best, if the tax is not too steep it will be a minor retardation.
Reducing taxes, may stimulate job creation for opposite reasons, money being put back into production. Again it is how much, and combined with other factors. Certainly, no matter what the taxation situation is, if business is nervous about the direction of the economy, and not confident about the decisions of the administration, they may wait to make aggressive decisions.
Originally posted by USArmyParatrooperLower capital gains tax rates have always produced more revenue. People stop trading when cap gain rates are too high.
On what basis are you claiming Buffett is lying about his personal opinion about what's best for the economy? I mean besides the fact that he disagrees with you.
You're so concerned about deficits but you're adamantly against taking the tax rates back to 1993 levels, even if it's just for the top earners, even though our current tax rate is the ...[text shortened]... reason why it shouldn't be done, other than the fact that it doesn't suit your ideology.
Andrew Jackson was the last President to pay off the national debt.
Originally posted by USArmyParatrooper"What stimulate the economy more than any single thing is people spending their money. The very wealthy spend very small percentage of their wealth, as compared to the poor and middle class."
WROOOOONG. And it's been prove WROOOONG over and over.
What stimulate the economy more than any single thing is people spending their money. The very wealthy spend very small percentage of their wealth, as compared to the poor and middle class.
As a country I would take the economic activity of 1000 people making $50,000 per year over 1 person making $50,000,000 per year any day of the week and twice on Sunday.
Consumer spending is important, however even the smaller percentage of their money that goes to consumer spending is a huge amount, just like the taxes they already pay. Ask Bill Clinton, who though taxing of luxury boats wouldn't harm the economy. Just about killed off New England ship yards, and didn't raise any money, but lots of workers lost their jobs.
Thing is that small tax breaks for the rich put lots of money into both sides of the economy, consumption and production.
I would take the results of a free economy any day, than that which planners attempt to promise will happen as a result of their brainstorms.
Originally posted by USArmyParatrooper"People spending money is what grows the economy."
I disagree with your characterization of the evils of investments, but economically speaking investing in equities creates a negligible amount of jobs.
People spending money is what grows the economy.
And what do they spend money on? They get money by producing, and product is what money buys.
Originally posted by wittywonka"Beyond what income threshold should we no longer consider an individual a "small"-business owner?"
So we should be cynical enough to assume that the super-rich are utterly selfish, but not cynical enough to assume that they are supremely interested in "creating" new jobs for others?
Also, you never answered my OP question. Beyond what income threshold should we no longer consider an individual a "small"-business owner?
Why should there be such a threshold? If a guy owns a thousand small businesses and make a $100m is he no longer a small business owner? What is small, and if small becomes medium or large is that a bad thing? Nobody grows even a fully automated business without some employees.
Originally posted by DrKFAnd those tax increases still are paltry compared to the increases in spending just in the last three years.
Good article, but there's a subtle piece of misdirection in there.
Raising taxes in the way he suggests (20% tax raise for the Forbes 400) would raise an additional $18bn per annum.
Taxing the same Forbes 400 as little as 10% on their wealth would raise $140bn per annum.
So, thanks for your magnamity, WB - can we just go ahead and tax your wealth at 10%? Warren? Warren? Can you hear me?
Originally posted by normbenignTrue only in the short run as investors delay capital gains sales in advance of the effective date of reductions in the rate. Untrue in the long run:
Lower capital gains tax rates have always produced more revenue. People stop trading when cap gain rates are too high.
Andrew Jackson was the last President to pay off the national debt.
Cutting capital gains rates reduces revenues over the long run. That’s the conclusion of the federal government’s official revenue-estimating agencies, as well as outside experts and the Bush Administration’s own Treasury Department.
■The non-partisan Congressional Budget Office (CBO) and the Joint Committee on Taxation have estimated that extending the capital gains tax cut enacted in 2003 would cost $100 billion over the next decade. The Administration’s Office of Management and Budget included a similar estimate in the President’s budget.
■After reviewing numerous studies of how investors respond to capital gains tax cuts, CBO commented that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.”
■The Bush Administration Treasury Department examined the economic effects of extending the capital gains and dividend tax cuts. Even under the Treasury’s most optimistic scenario about the economic effects of these tax cuts, the tax cuts would not generate anywhere close to enough added economic growth to pay for themselves — and would thus lose money.
While a capital gains tax cut can lead investors to rush to “cash in” their capital gains when the lower rate first takes effect, it does not raise revenue over the long run.
■Especially when a capital gains cut is temporary, like the 2003 tax cut that Gibson cited, investors have a strong incentive to sell stocks and other assets in order to realize their capital gains before the capital gains tax rate increases. This can cause a short-term increase in capital gains tax revenues, as happened after the 2003 tax cut.
■Capital gains revenues also increased after 2003 because the stock market went up. But the stock market increase was not a result of the 2003 tax cut, as a study by Federal Reserve economists found. European stocks, which did not benefit from the U.S. capital gains tax cut, performed as well as stocks in the U.S. market in the period following the tax cut.
■To raise revenue over the long run, capital gains tax cuts would need to have extraordinary huge, positive effects on saving, investment, and economic growth that virtually no respected expert or institution believes they have. In fact, experts are not even sure that the long-term economic effects of these capital gains tax cuts are positive rather then negative.
One reason is that preferential tax rates for capital gains encourage tax sheltering, by creating incentives for taxpayers to take often-convoluted steps to reclassify ordinary income as capital gains. This is economically unproductive and wastes resources. The Urban-Brookings Tax Policy Center’s director Leonard Burman, one of the nation’s leading tax experts, has explained, “shelter investments are invariably lousy, unproductive ventures that would never exist but for tax benefits.” Burman has concluded that, “capital gains tax cuts are as likely to depress the economy as to stimulate it.”
http://www.cbpp.org/cms/?fa=view&id=1286
Originally posted by kbear1k"Bush's tax cuts put more than $1000 in he hands of most families, and it continues to do so.
Well said!! The mantra sited by the previous poster is so wrong and misguided. It is often used by folks who understand very little about economics to support their selfish views regarding money which they believed they earned entirely on their own merit - as if the world revolved around them and them alone. Warren Buffet was correct when he said that giving every family $1,000.00 would have done more to stimulate the economy that Bush Jr.'s tax cuts.
Originally posted by no1marauderStop being obtuse. Wages are not at risk. Of course some jobs have risks attached, but the paycheck is secure.
Wages aren't subject to risk? Tell that to police officers, firemen etc. etc. etc. A job is generally a lot more dangerous than opening up the envelope containing your brokerage statement.
When you have tax policy that encourages paper investment over productive work the results are predictable. You get $64 trillion deflected into mortgage backed securities and credit default swaps.
The issues you have with mortgage backed securities aren't tax issues, but of quasi governmental agencies operating as if they were private sector, and of government regulatory agencies that winked and nodded.
Try reading Reckless Endangerment.
Originally posted by Kunsoo"And yes, taxing all the rich at their pre-Bush levels would take a huge dent out of the deficit."
Yes. He's waiting for a tax change. And yes, taxing all the rich at their pre-Bush levels would take a huge dent out of the deficit.
You're dreaming. The dreamy estimate is $700B in ten years. The estimated deficit for those year is a thousand time that. And if the deficit were to look better, what would government do? Spend more.
