What is Digg?301 Comments
- inactive, on 10/11/2007, -12/+161I'm all for it..until I become rich. Then ***** you poor people, I'm evading the IRS like all the rest of my yacht sailing cardigan wearing friends.
- JimyJOp, on 10/11/2007, -37/+140I know this is long - but it is a good analogy:
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with
The arrangement, until one day, the owner threw them a curve.
"Since you are all such good customers," he said,
"I'm going to reduce the cost of your daily beer by $20.
"Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected.
They would still drink for free. But what about the other six men - the
paying customers?
How could they divide the $20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33. But if they subtracted that from every body's share,
then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's
bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free.
But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20,"declared the sixth man.
He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar,
too. It's unfair that he got TEN times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back
when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine
sat down and had beers without him. But when it came time to pay the
bill, they discovered something important. They didn't have enough
money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how
our tax system works.
The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not
show up anymore.
In fact, they might start drinking overseas where the atmosphere is
somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia - cafzal, on 10/11/2007, -13/+116Isn't this guy great? A financial genius he made himself one of the richest people ever. He doesn't believe in kick-backs for the rich. He doesn't think his kids should be all spoiled and he thinks the economic playing-field should be more level. Anyways Buffett is a pretty cool guy.
- heythisismyname, on 10/11/2007, -14/+93Warren Buffet is pure class
- totorototoro, on 10/11/2007, -1/+63He also wants to repeal Proposition 13 here in California, which caps property tax rates for homeowners. I don't think thats gonna go over well.
- inactive, on 10/11/2007, -28/+68Two things: Rich people will find ways around the new taxes, thats why they are rich in the first place.
Also, if the government gets more money from the rich, you really think they'll give it back to poor people? They are not Robin Hood. They'll just find new and more creative ways to waste it or steal it. - airwalkery2k, on 10/11/2007, -1/+36Do any of you know Warren Buffett? He's worth billions, but he still lives in a relatively small home in Omaha, Nebraska and he drives himself, and he prefers to eat at a small-time steakhouse. He prefers not to spoil his children, at most giving them a small inheritance, which still comes out to a few million, but not his entire worth. He instead plans to donate most of his wealth to charity upon his death.
He simply doesn't expect to be treated special because he is rich. That is why he opposed tax cuts for the wealthy and still opposes what was done. - HMTKSteve, on 10/11/2007, -4/+38I read the article and see nothing in Buffett's words where he wants a tax hike. That was a line thrown in by the reporter and not Buffett.
The question Buffett is raising is why those who "work" for a living pay more in taxes than someone such as himself who lives off of the interest and makes more money then them.
The reason is that the US government taxes wages/earnings i.e. the accumulation of wealth. The US Government does not tax wealth itself. - surf314, on 10/11/2007, -2/+30I don't know your talking about the guy that gave a huge amount of money to charity, basically leaving none for his kids saying that they should make their own way in the world and that you shouldn't be rewarded based on who your parents are.
- Belayman, on 10/11/2007, -10/+35++ Excellent Post ++
Copy, paste, save for later.
Thanks! - Maarek, on 10/11/2007, -2/+26http://davidk.myweb.uga.edu/
I would guess that perhaps David R. Kamerschen, Ph.D. Professor of Economics, University of Georgia might have some qualms with the horse crap you just attributed to him. - bovox, on 10/11/2007, -3/+25The guy gave away BILLIONS of dollars--near his entire fortune--to charity. The only ulterior motive he could possibly have is that he truly believes that it will help humanity ... and that the best way to help humanity is to assist in helping the United States return to liberal democracy.
- Magnis, on 10/11/2007, -0/+19@Leomarth
You obviously don't know anything about Warren Buffett. He's not just some generic, super-rich person. Read/Watch a short Biography of the man and then come back and say that. BTW, this is the same man who recently donated $35 billion [Billion with a B] to charity. - Maarek, on 10/11/2007, -2/+18oh and also:
http://www.snopes.com/business/taxes/howtaxes.asp - LooseCannon1, on 10/11/2007, -6/+20@sockpuppets - "There is something morally wrong with someone sitting on millions of dollars who is unwilling to part with their fair share."
What would you consider "their fair share"?
According to figures from the IRS, the top 1% earn 19% of all the income in this country and pay 36% of the taxes. The top 50% of all earners pay 96.9% of all the income taxes in this country.
They are paying they're fair share. Unfortunately, so many of you are ignorant of that fact. - Error601, on 10/11/2007, -4/+18I've worked for a number of poor people because they put every cent they had into the business. They had the potential to become rich though.
- 8bit_Hero, on 10/11/2007, -2/+16because he's been giving it to people that can actually use it: http://money.cnn.com/2006/06/25/magazines/fortune/charity1.fortune/
pwn'd bitch! - PopcornDave, on 10/11/2007, -1/+14About the time grandma and grandpa get kicked out of the home they bought 50 years ago, and have lived in all that time, for not being able to pay taxes at the current market rates there's going to be a huge hue and cry about that. That's why it passed in the first place back in the 70's.
- Beakerz, on 10/11/2007, -4/+17I'm all for the Fair Tax system (NOT the Flat tax).
Under our current system people who make an enormous amount of money (approximately $800,000+) are taxed at a rate of 45% (from both state and fed). Yes, they do have a very large amount of expendable money but that is still no reason to take away nearly 1/2 of their money no matter what they make. Also there is no way that current 44,000 page IRS tax code can be an efficient solution.
There is no way that I can explain the way Fair Tax works here except that its......fair. So, go to http://www.fairtax.org if you are curious.
-Beak - kukyona, on 10/11/2007, -2/+15If the tax system we have now was implemented as a means of treating the poor fairly, why did it go from only the very rich being taxed to everyone being taxed?
The tax system we have now isn't designed to make things fair, its designed to get the government the most amount of money possible while not pissing off the general public. Its very easy to use the demagoguery of envy to pick on a minority group of rich people. - kukyona, on 10/11/2007, -6/+19Escaping taxes is not how the rich became rich. You don't make money by not having it taken from you.
Unless you mean to say that our tax code is such a high burden that those who can escape its grip will become very wealthy. If that were true, then its a very good sign that we are taxing to much already. - d0tnetdude, on 10/11/2007, -24/+36Let's not forget ... rich people provide the jobs ... when is the last time you worked for a poor person?
As much as I despise taxes, if you just had to have one, I'd rather see a national sales tax, something that would be fair across the board. - ccagney, on 10/11/2007, -3/+14Maybe everyone should just pay less and our government should get smaller and stop ***** around in everyone's lives?
- Error601, on 10/11/2007, -5/+16How about capitalize a new business? Consumerist like yourself tend to think money is for buying stutf which is why you'll never be wealthy. You get wealthy by investing in new ventures.
- inchrnt, on 10/11/2007, -1/+12This is a terrible analogy.
First, it doesn't represent how much money each individual has in their pocket already. If you want to make this a guide for our tax system, then you need to add that guy #10 has 10 billion dollars in his pocket, guy #9 has 1 million, guy #8 has 10k, guy #7 has 5k, etc.
Second, this analogy doesn't represent Buffet's point which is that he, 3rd richest man in the WORLD, is paying just 17% where some of his employees are paying almost 40%!!!
What percent do you pay? I bet it is a lot more than 17%.
I will never understand is why so many poor and middle class people try to defend the tax benefits of the uber rich. Is it because you have some delusion that you will be that rich someday? Guess what ... it will never happen. - kukyona, on 10/11/2007, -3/+14Perhaps we should do away with income taxes completely and only tax businesses and have a national sales tax.
A sales tax would still tax the rich more simply because they consume more. This would be a good idea, I think, because it would encourage the poor to save money (which will in turn help then escape being poor), as well as curb the general consumption that we currently see.
Then again, taxes wouldn't be such an issue if the government wasn't wasting all our money. - NoHandle, on 10/11/2007, -10/+21I see what you did there. You equated 1% of the population to paying 59% of the taxes. Very sneaky!
It's too bad that as "little" as the peons do pay in taxes, it is still far more than 50%. What you should do next is an analogy between one group making 80% of the money, but only being 1% of the population and then paying less than 50% of the taxes. Then have the other group squabbling over that last 20%, but also paying the majority of the taxes. Then determine what happens when the bigger poor group kills the richer unnecessary group and takes over their jobs. - GabrielS, on 10/11/2007, -0/+10They're going to give it back to him. The government cannot legally withhold your own tax return.
You can overpay your taxes, but the G men are going to give you back the amount you overpaid.
If you want to give more money to the government you can donate to any number of quasi government agencies. - bhouglan, on 10/11/2007, -7/+16"Isn't this guy great? A financial genius he made himself one of the richest people ever. He doesn't believe in kick-backs for the rich. He doesn't think his kids should be all spoiled and he thinks the economic playing-field should be more level. Anyways Buffett is a pretty cool guy."
Umm.. are we talking about the same Buffett.
What most people don't understand is that most of Warren "The Savior to the underclass" Buffet's money is only taxed at the Capital Gains rate of 15%, because his money really isn't considered "Income". This what most people don't understand about people like Buffet, Kennedy, Soroas, and other "old money" or money made mostly from investments. They love to rail upon the new money that make their money from incomes because then they won't threaten every barrier the old money has placed on entrance to "club elite" and threaten their power. - skrowl, on 10/11/2007, -1/+10Punish the successful more! It's not enough that the top 50% of wage earners pay 98% of the tax bill! All of our poor people (below the US avg income) should pay $0!
To each, according to their needs, from each, according to their means, comrades! - IronDonut, on 10/11/2007, -2/+11And using the same logic from the other perspective worker labor produce wealth. How did we ever get to the point where people forget that it's the workers labor that builds the bosses' capital? Capital without labor produces nothing.... Somehow we've gotten so dumb in this country that the people that labor value the bosses's capital input higher than their labor input and their are willing to invest everything they have, their time and receive only a paycheck. No equity.
- Leomarth, on 10/11/2007, -3/+12Morally wrong? If I earn something, where is the "moral wrong" in wanting to keep it? There are no positive moral obligations my friend. I'll tell you what's morally wrong - envy. That is, seeing someone else with money, and then saying you want it. And how do you get it? You petition a person in government to take it away from the person you are envious of. That's morally wrong.
- jvardrake, on 10/11/2007, -2/+1045%, huh? I'm not sure if that is the average for extremely wealthy people, but if you read the article you will find that Buffet, who says he reported $46 million in income last year, claims to have paid only 17.7%.
- inactive, on 10/11/2007, -1/+9I vote for the concubine.
- wildfire, on 10/11/2007, -24/+32On the flipside, wealthy individuals and corporations could cut jobs to offset the tax hikes.
- XFact0r, on 10/11/2007, -1/+9JimyJOp -
Dugg down for inaccurately portraying the tax breakdowns in the US tax system and because of Maarek's link. NoHandle makes a good point also.
But to really understand why I knew it was total fake to begin with, look at the signature:
David R. Kamerschen, "Ph.D"
Professor of Economics
University of Georgia
ANY "research" that comes from UGA is not real.
GT represent! - 8bit_Hero, on 10/11/2007, -3/+11"If he's pushing for this, it also means he's going to get something out of it."
yea like all the kickbacks him and gates get from donating billions in philanthropy /s - inactive, on 10/11/2007, -5/+12The problem with your scenario is that you assume they all derive the same benefit, to wit, the beer. In our real world the wealthiest person would have a greater stake in the security and stability of the various systems supported by tax dollars. So in your example the wealthiest person would have to have some multiple of the number of beers that the others have. Of course that gets a little messy and screws up your cute story.
- bemenaker, on 10/11/2007, -1/+8Halleys the problem as Warren Buffet is pointing out, that the wealthy are currently paying less than the middle class.
- c5kirk, on 10/11/2007, -2/+9Only problem with that is that the top 1% of income earners do not make 80% of the money (based on AGI)... they make 19% of the money yet pay 36.9% of the taxes. The top 25% (AGI over $60,041) make 66.1% of the money yet pay 84.9% of the taxes. Tax rates range from 2.9% for the bottom half of the income earners to 23.49% for the top 1% of income earners. So whether you look at it by total $ amount paid based on earnings or rate paid based on earnings, the top earners are paying much more than their "fair" share. Really provides an incentive to increase your income eh? That's why real wealth is not built by having a large income (which is taxable) but by having a large portfolio of unrealized (not taxable) gains through smart investing (can you say muni bonds).
- Jagdwulfe, on 10/11/2007, -5/+11Of course not because it speaks the truth and you don't want to hear that. You'd rather live in your class jealousy lifestyle.
- Gastrodamus, on 10/11/2007, -2/+8For every person like you, there's a guy on welfare saying, "There is something morally wrong with someone making $30,000 who is unwilling to part with their fair share. What's an extra thousand in taxes going to buy you, a nicer Saturn? A few more video games? Give it to me."
It's all relative. Buffet & Co. seem ridiculously rich to you. You seem ridiculously rich to someone else. You say the rich should pay up. The poor say you should pay up. - davdav, on 10/11/2007, -3/+9Obviously you know nothing of Warren Buffet.
- Urusai, on 10/11/2007, -4/+10The government fines you for paying too much in taxes. Oh, the irony.
- johnhummel, on 10/11/2007, -0/+6I would agree, save that this national sales tax should be for items X in value and up (so if a poor person wants to buy a car, they aren't screwed versus a rich person who decides to buy an expensive car), or exclude certain items, such as food (this way, poor people can eat).
Now, there is the issue of rich people who would buy things out of country just to keep from paying this national sales tax, but these are probably the same ***** who only get paid $1 a year then claim almost no taxes on their stock bonuses or some such. - brstilson, on 10/11/2007, -8/+14percentages have a different impact on the rich than on the poor. Say I make $15,000 a year. 15% taxes would mean that I pay $2,250 a year, making my true income $12,750 per year. I have absolutely no expendable income at this point. However, if I made $1,500,000 per year, then a 15% tax would be $225,000, making my true income $1,275,000 per year. My taxes do not impact my life as much because I still have quite a bit of disposable income. I would have no trouble paying for necessities whereas a poorer person would.
- TubaTechno, on 10/11/2007, -0/+6Then the person who invented something and made lots of money, should be forced by the government into supporting you for the rest of your life because you're obviously dumb and can't do anything.
- Urusai, on 10/11/2007, -7/+13You mean, Bush is rich because he worked hard, not because of Daddy Bush? Paris Hilton is rich because she provides valuable services? You are a moron.
- Ricky8765, on 10/11/2007, -0/+5That's a very remote "sort of"
Many wealthy people became wealthy by NOT giving in to consumerism. They don't buy huge houses, expensive cars or big yachts, and so their wealth really isn't taxed, just their income. - beaverlakenc, on 10/11/2007, -7/+12Dumb analogy using a luxury item such as beer
- In our society there will always be a 10th man (think about it . . there are always citizens better off then others)
- http://www.irs.gov/formspubs/article/0,,id=133517,00.html - our highest tax rate is 35%, so the 10th never would pay more then $35 presently, so the example is slanted just a weee bit starting off with the "rich" paying 60%
- Play that analogy with something like a basic item such as food/shelter/education and see if your morals agree with it -
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