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View Diary: The Difference between Democrats and Republicans -- The Buffett Rule (49 comments)

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  •  Hang them,as the British say, (4+ / 0-)

    from the neck until they are dead. Now I meant that metaphorically, of course. Nothing like a little hyperbole after Anglican Mass on Sunday. But really, there are many people who belong in prison who are still running international finance.

    Pope Francis: the Thumb of Christ in the eyes of the Pharisees.

    by commonmass on Sun Dec 29, 2013 at 11:28:00 AM PST

    •  I agree (6+ / 0-)

      with holding the bandits,

      to the full standard of the Law.


      There should be no 2-Tiered justice system,

      to go along with our 2-Tiered income system.

      •  Every country in the G8 has a lower tax rate (4+ / 0-)

        for long term capital gains than for earned income. Same is true for the G20. Many developing countries have a zero capital gains tax rate to attract investment capital to their economies.

        We really have no idea what would happen to investment in the US, by both domestic and foreign parties, if we eliminated the capital gains preference at our current income tax rates for earned income. The US has always had a difference, for decades the long term capital gains rate was half your earned income rate, except for a short period after the Tax Reform Act of 1986 when the top marginal earned income rate, and the long term capital gains rate, were both capped at 28%.

        The one thing we do know is that higher capital gains tax rates don't raise higher capital gains tax revenue for the Treasury. It seems counter intuitive, but at higher rates people with appreciated capital assets borrow against them rather than selling them and paying the tax.

        Even the Buffet rule is estimated by the CBO to raise only $5 billion a year, which isn't much when compared to the federal budget of $3 Trillion.

        "let's talk about that"

        by VClib on Sun Dec 29, 2013 at 12:04:18 PM PST

        [ Parent ]

        •  This is a terrible argument (4+ / 0-)
          The US has always had a difference
          "We've always done it this way, so we should always do it this way."

          I'm also not convinced that higher capital gains taxes would not result in higher tax revenues without some proof.

          jamess moreover I think is arguing basic fairness, not revenues.  If a garbage collector pays an effective rate of 20%, why shouldn't the CEO of the company, or someone who trades the company stock?

          OT: Program trading may be tweaked but those processes would not change too much if a transaction tax were in place.

          I do not demand tolerance, I demand equal rights. --Anna Grodzka

          by VeggiElaine on Sun Dec 29, 2013 at 01:55:42 PM PST

          [ Parent ]

          •  VeggiE - CEOs pay top rates (5+ / 0-)

            Buffet is an exception for two reasons. First, his salary is only $100,000 a year. The typical cash income of a CEO of a similar company would be $2+ million and therefore in the top marginal tax rate. His income is primarily from the sale of his founder's shares of Berkshire Hathaway which qualify for long term capital gains treatment. The typical CEO has non-qualified stock options or restricted stock, both of which can't qualify for long term capital gains treatment and are also taxed at the top marginal rate.

            With the few exceptions of founder/CEOs like Buffet all the senior executives in the Fortune 1000 pay top marginal income tax rates on all their corporate income. The only executives who have a significant portion of their income subject to long term capital gains rates are managers of investment partnerships such as hedge funds, private equity funds, and venture capital funds through the use of "carried interest". Because of the structural differences between partnerships and corporations, and a Tax Court decision forty years ago, partnership managers are able to take an ownership position in the appreciated assets they manage. When those assets are sold all partners are treated the same, including the managers, and all are eligible for long term capital gains treatment.

            My point wasn't only that we should keep a differential because we have always had one, but also the entire developed world has one.  In my view, this is an area where we don't want to be the only country without the investment incentive of lower long term capital gains rates.

            The revenues from long term capital gains are available somewhere in the IRS or Treasury website and I don't have the time to go search for them. What you will see is a spike in revenues the year before rates are scheduled to increase, and then a drop in the next several years as people borrow against their appreciated assets rather than selling them and paying the tax.

            "let's talk about that"

            by VClib on Sun Dec 29, 2013 at 02:17:50 PM PST

            [ Parent ]

            •  Agreed re CEO income (0+ / 0-)

              How much of that $2M goes into investments?  My guess is a higher % than the laborer.  & that passive income on "earnings" is taxed at a lower effective rate than the labor that earned the earnings.

              I do not demand tolerance, I demand equal rights. --Anna Grodzka

              by VeggiElaine on Sun Dec 29, 2013 at 02:22:59 PM PST

              [ Parent ]

              •  VeggiE - no doubt that CEOs (1+ / 0-)
                Recommended by:
                johnny wurster

                have a much bigger investment portfolios than the rest of us and those assets can qualify for lower tax rates. However, in an era of exploding executive compensation, particularly through the use of stock options, the executives annual effective tax rate is driven by their corporate earnings, not their investment income.

                "let's talk about that"

                by VClib on Sun Dec 29, 2013 at 02:29:09 PM PST

                [ Parent ]

                •  VCL, your 1st point is due to gaming the system (1+ / 0-)
                  Recommended by:
                  NoMoreLies

                  & this

                  the executives annual effective tax rate is driven by their corporate earnings, not their investment income.
                  is due to the low tax rate on capital gains!

                  If cap gains were taxes at rates of the same magnitude as income, if that CEO spends $500k of the $2M & invests $1M & pays say $500K in taxes, then "earns" 10% on the invested income, so $100,000, they pay $15,000 in cap gains taxes rather than say $35,000 as would be the case were it income.

                  In my opinion, the passive "earnings" should not receive preferential treatment for purposes of taxation; I think that this CEO has been given a great opportunity & the good luck to be a citizen here, in a safe place with laws that (ostensibly) make business transactions trustworthy.  That is worth a certain obligation on the CEOs part.  That's a small d opinion.

                  Here's a small l libertarian perspective: Exxon should pay every dollar of military spending it costs to protect their oil assets en route from the ME.

                  Personally, I think both are fair & thus worth consideration.

                  I do not demand tolerance, I demand equal rights. --Anna Grodzka

                  by VeggiElaine on Sun Dec 29, 2013 at 02:53:22 PM PST

                  [ Parent ]

                  •  VeggiE - I don't understand your comment (1+ / 0-)
                    Recommended by:
                    AlexDrew

                    The typical Fortune 500 CEO has taxable income of about $10 million a year, all taxed at the top marginal rate. They don't have a large enough investment portfolio, or enough realized capital gains in any one year, to make a big difference in their effective federal tax rate.

                    "let's talk about that"

                    by VClib on Sun Dec 29, 2013 at 04:02:44 PM PST

                    [ Parent ]

        •  People with more wealth (call it income, call it (4+ / 0-)

          ROI, call it assets, call it what you want) receive more benefit from government in our country than do persons with lesser wealth. Sure, I throw values on intangibles to get to that result, but that's not unreasonable. And those who receive the most need to pay up for every penny of benefit. To hold any other position is simply repugnant to me.

          This concept that we have a certain group out there amassing vast personal fortunes for the benefit of the rest of us is ridiculous.

          (Five billion dollars per year is around the amount that is to be saved by tinkering with military retirement benefits, and I have no idea why it would be reasonable to ask the one group to paym but not the other. And after we get that $5billion from the super wealthy, let's look for ways to get another trillion!)

          There can be no protection locally if we're content to ignore the fact that there are no controls globally.

          by oldpotsmuggler on Sun Dec 29, 2013 at 04:09:49 PM PST

          [ Parent ]

          •  Can't get a trilion (1+ / 0-)
            Recommended by:
            erush1345

            from the 1%. The "Buffet Rule" only gets you $4-5 billion a year as an example. That's a long way from $1 Trillion.

            "let's talk about that"

            by VClib on Sun Dec 29, 2013 at 07:00:02 PM PST

            [ Parent ]

            •  You limited it to that one proposal, not me. I'm (0+ / 0-)

              looking at increaseing, by some appropriate means, the income taxation of the top 5 or 10 per cent wealthiest persons/households to the tune of around an additional trillion dollars per year, letting them help make the investments that our society needs. It ain't like life here ain't been real good to them.

              There can be no protection locally if we're content to ignore the fact that there are no controls globally.

              by oldpotsmuggler on Sun Dec 29, 2013 at 07:34:24 PM PST

              [ Parent ]

              •  Does that group even earn (2+ / 0-)
                Recommended by:
                nextstep, erush1345

                $1 Trillion in annual income?

                "let's talk about that"

                by VClib on Sun Dec 29, 2013 at 10:05:16 PM PST

                [ Parent ]

                •  In a 17 trillion dollar economy, with record (0+ / 0-)

                  profits, and only the wealthiest doing well, I think that the math (and not after it gets massaged by their tax attorneys and high priced accountants, taking advantage of every conceivable loophole, and then some) says that this society can afford more prosperity for everyone than we currently have, at least so long as those at the top are made to carry their fair share of the weight. If that means fewer corporate jets, no, or nearly so, billion dollar personal fortunes, and the wealthy having to live merely wealthy, instead of mega wealthy lifestyles, then so be it.

                  And, yeah, I remember Ronnie saying "Oh I would have made alot more movies than I did if it wasn't for the 90% top income tax rate". And my response is, as yours should be, "Thank god for that 90% tax rate".

                  There can be no protection locally if we're content to ignore the fact that there are no controls globally.

                  by oldpotsmuggler on Mon Dec 30, 2013 at 07:02:10 PM PST

                  [ Parent ]

                  •  In a $17 Trillion economy it's highly unlikely (0+ / 0-)

                    that the top 1%, 5% or 10% collectively earn $1 Trillion a year. If I wasn't so lazy I could go to the IRS website and find out. The US collects over $2 Trillion in annual taxes now, so that would be a very big, 50%, actual increase.

                    "let's talk about that"

                    by VClib on Mon Dec 30, 2013 at 10:31:22 PM PST

                    [ Parent ]

                    •  And would approximate our level of spending, so (0+ / 0-)

                      the resources obviously are there. The top 10% right now, as has been widely reported lately, have 80% of the national net worth, and our national net worth, as I understand it, is back over $60 trillion, and probably 70 trillion with what the stock market has done lately.

                      There can be no protection locally if we're content to ignore the fact that there are no controls globally.

                      by oldpotsmuggler on Tue Dec 31, 2013 at 10:35:39 AM PST

                      [ Parent ]

                      •  But we are talking about taxing income (0+ / 0-)

                        The only federal wealth tax we have in the US is the estate tax. It would take a Constitutional Amendment for the federal government to tax wealth on an annual basis.

                        "let's talk about that"

                        by VClib on Tue Dec 31, 2013 at 10:45:11 AM PST

                        [ Parent ]

                        •  I'm talking about taxing people. I had tax law in (0+ / 0-)

                          law school, and, believe me, we can do taxation without a Constitutional Amendment (parenthetically, I'm in favor of a 100% estate tax. Recycle all productive assets every generation. Wealth can and should be "use it or lose it" because this whole idea of dead people maniulating the rest of us from the grave is simply not working.)

                          Taking money from one pocket and putting it into another simply does not automatically make a society any poorer.

                          There can be no protection locally if we're content to ignore the fact that there are no controls globally.

                          by oldpotsmuggler on Tue Dec 31, 2013 at 01:47:13 PM PST

                          [ Parent ]

                          •  Beyond the income tax, which required the 16th (0+ / 0-)

                            Amendment, and the estate tax, and the ACA tax, specifically what else did you have in mind?

                            "let's talk about that"

                            by VClib on Tue Dec 31, 2013 at 01:51:03 PM PST

                            [ Parent ]

                          •  Taking alot of money from those who have to much, (0+ / 0-)

                            and doing it in any way feasible, is not an overly complicated concept.

                            How do you suggest that we do it?

                            There can be no protection locally if we're content to ignore the fact that there are no controls globally.

                            by oldpotsmuggler on Tue Dec 31, 2013 at 05:34:09 PM PST

                            [ Parent ]

                          •  You can't just "take" income and wealth (0+ / 0-)

                            You can raise the income and estate taxes at the federal level but I don't think you can do much more without a Constitutional Amendment. There is also the issue that the majority of voters in the US don't believe that the US government should actively redistribute income on a large scale. I think your biggest challenge is developing a consensus that the federal government should even attempt large scale income redistribution.

                            "let's talk about that"

                            by VClib on Tue Dec 31, 2013 at 07:52:31 PM PST

                            [ Parent ]

                          •  The funny thing about you, I've noticed, is that (0+ / 0-)

                            you insist on asserting that extracting "windfall profits" from the mega-wealthy bandit class is "redistribution of income on a large scale". And I've been cognizant of the enormity of the task of creating needed change for perhaps longer than you've even been alive. But, simply put, so much wealth has accumulated at the top of the pyramid that it is now causing the entire planetary enonomy to malfunction.

                            This anomaly is now impeding the beneficial development of humanity, and your belief that the majority approve (or would, if ever even given the right to express their preference) is, at best, naievete.

                            There can be no protection locally if we're content to ignore the fact that there are no controls globally.

                            by oldpotsmuggler on Tue Dec 31, 2013 at 08:21:56 PM PST

                            [ Parent ]

                          •  Unlikely longer than I have been alive (0+ / 0-)

                            If you look at my DKOS profile you will see that I am a boomer.

                            "let's talk about that"

                            by VClib on Wed Jan 01, 2014 at 09:30:06 AM PST

                            [ Parent ]

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