Posts Tagged ‘The rich guy’

Buying you things with your own money

Monday, May 14th, 2012 by Joe Kristan

Supporters of the “Buffett Rule” aren’t being honest about U.S. Budget problems.  No matter how much you tax the rich, the rich just don’t have the money to pay for all the spending the politicians are doing.  Here is what an honest Buffett Rule fan would say:

Every nation in the world with the kind of welfare state we want for America pays for it by taxing a large majority of its citizens far more heavily than we do. To pretend we can do otherwise is to invite our countrymen to indulge a fantasy rather than call on them to make a serious commitment. Building the welfare state we need means most Americans are going to have to pay significantly higher taxes. No one likes such taxes, of course, but the reality is that they’ll fund an array of government programs that leave all of us better off than we will be with the rudimentary welfare state we’re forced to live with if we insist on a much lower tax burden.

Warren will never say anything of the sort, but that doesn’t change the math: either we spend less or everybody gets taxed more.  The rich guy isn’t buying.

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The rich guy didn’t pick up the tab in London

Friday, March 23rd, 2012 by Joe Kristan

So maybe soaking the rich isn’t the infinite source of money that some folks seem to imagine.  The Tax Policy Blog reports that the U.K. is repealing the 50% rate that it had imposed on incomes over £150,000 (about $95,000).  They quote a report from Global Tax News:

He explained that “an astonishing GBP16bn of income was deliberately shifted into the previous tax year – at a cost to the taxpayer of GBP1bn, something that the previous government’s figures made no allowance for. Self-assessment receipts this year are below forecast by some GBP3.6bn, while other tax receipts have held up. The increase from 40p to 50p raised just a third of the GBP3bn we were told it would raise.” Ultimately, Osborne insisted, “no Chancellor can justify a tax rate that damages our economy and raises next to nothing. It is as simple as that.”

Yes, taxes do affect behavior, even income taxes.  It’s odd how the same folks who want to raise drinks and cigarettes to get people to change their eating and smoking habits think that high income taxes don’t affect behavior.

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Of course the “Buffett Rule” is futile. It’s a distraction, not a solution.

Thursday, March 22nd, 2012 by Joe Kristan

The Administration has spent so much time pushing a “Buffett Rule” to increase taxes on “millionaires and billionaires,” you’d think that it would actually close the $1 trillion+ budget deficit.  Think again.  The Congressional Joint Committee on Taxation projects that it would raise $46.7 billion — not in one year, but cumulatively over 10 years. (Via the TaxProf).

BuffetRule Chart

The talk of raising taxes on “the rich” isn’t serious.  They simply don’t have enough money to pay the bills, and the U.S. tax system is already highly progressive.  If spending doesn’t come down, only a broad-based tax increase, like a VAT, will cover the tab.  But the politicians don’t want to admit this, so they point fingers at the “1%” so we won’t notice how fast they are spending our money.

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Doing the math

Monday, February 27th, 2012 by Joe Kristan

Congressional Budget Office head Douglas Elmendorf :

By the end of the coming decade, unless we cut federal spending apart from Social Security and the major health care programs below the unusually low share of GDP it is already projected to reach, stabilizing federal debt relative to GDP will require us to cut spending on Social Security and federal health care programs by about one-quarter, raise taxes by about one-sixth, or do some combination of those approaches

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And the Rich Guy isn’t buying
Via the TaxProf.

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Make mine a double, put it on the rich guy’s tab

Tuesday, February 21st, 2012 by Joe Kristan

Via the TaxProf, “Heritage Foundation: Chart of the Week — Nearly Half of All Americans Don

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Nope. Still doomed.

Monday, February 20th, 2012 by Joe Kristan

Congress just passed a bill to continue the 2 percentage-point reduction in employee Social Security tax through the end of the year. Meanwhile, the President and many pundits are obsessed with increasing taxes on “the rich,” even though they won’t and can’t come close to paying for our incontinent government, especially entitlements like Social Security. The center-left Tax Policy Center has a new paper out that makes the point diplomatically:

While the changes enacted in the Budget Control Act have moved projected deficits in the right direction, these deficit reductions still exist only on paper, with the lack of action since the Act’s passage leading one to question whether they will be sustained. Even if they are, the federal budget outlook is still unsustainable, primarily because of a rise in entitlement spending that is not accompanied by an increase in revenues. Under even the most optimistic scenario, the necessary adjustments must be several times the size of those adopted under the recent legislation.

In other words, the rich guy isn’t buying this round. You are.

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Just put it on the tab

Wednesday, February 15th, 2012 by Joe Kristan

It looks like Congress has come up with a miraculous solution to financing the 2 percentage-point reduction in the employee FICA tax for the rest of the year: spend money they don’t have. Howard Gleckman of TaxVox reports:

On Monday, the House Republican leadership announced it would support a 10-month extension without offsetting spending cuts. Problem solved. Just put another $100 billion on the tab.
This wouldn

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‘Buffett Rule’ rates are already here

Friday, February 10th, 2012 by Joe Kristan

The Tax Policy Center, a non-partisan think tank on the center-left, has issued a wonderful little paper that cuts through much nonsense on the progressivity of federal taxes.
The Obama administration is embracing a “Buffett rule” tax, a sort of alternative alternative minimum tax of 30% on AGI over $1 million, so that everybody will pay as high a rate as Warren Buffett’s secretary allegedly does. Of course this ignores the tax that is paid on corporate income before it is distributed or realized as capital gains. The Tax Policy Center has looked at real rates on cash income when all federal taxes — payroll, corporate, income and estate taxes — are accounted for. On that basis, the “Buffett Rule” rates are already in place:

Source: Tax Policy Center. Full chart available here.
Not only are Buffett Rule rates in place, but the federal tax burden is already extremely progressivemore so than in Europe, where the tax system is much more dependent on regressive consumption taxes like value-added taxes.
Of course the demagogues will still promise more free federal cheese, paid for by the rich guy. Just remember, the rich guy has already gotten his bill; when taxes go up to pay for our incontinent government, they’ll go up for you, too.

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