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View Full Version : Elections Warren Buffett telling it like it is.


jidar
10-31-2008, 11:22 AM
Some people keep trying to insinuate that Obama raising the taxes of the wealthy is class warfare. That it was socialist or wealth redistribution. That's pretty far from the truth actually.
I'm going to make this post just to give some voice to the other side of the argument, and I'll keep it brief so people actually read it.

The truth is that the previous tax cuts for the wealthy were the class warfare, those tax cuts were wealth redistribution. Loopholes are the new name of the accounting game. This situation has resulted in the middle class paying 30% or more of their income in taxes while the wealthy people in the tax brackets above them are paying much lower, and the more they have the less they pay. The richest Americans pay less than 18% of their income to taxes and that's probably a generous figure. They managed to get these loopholes and tax breaks by lobbying for it of course. That was the class warfare and it was being waged against the middle class.

Here is the wealthiest American Citizen, and perhaps the most respected investor on the planet talking about the tax situation.

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This man knows money folks, take what he says seriously.

If you want more information about what Warren Buffett has to say about the tax burdern there is a lot of it out there. He's pretty vocal.

I'll quote an article you can find here: http://freakonomics.blogs.nytimes.com/2008/05/01/taxes-warren-buffett-and-paying-my-fair-share/

And Buffett went a step further, putting his money where his mouth is. Last November he issued a challenge to his fellow billionaires:

I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists.

So far, no-one has taken him up on this bet.

So don't tell me Obamas tax plan is class warfare. Obamas tax plan is class defense, defense of the middle class who has been getting shelled to the point of shell shock.

Robo-Chachi
10-31-2008, 11:31 AM
Flat tax!

ChiefsCountry
10-31-2008, 11:32 AM
Flat tax!

Thats the best tax we could have.

J Diddy
10-31-2008, 11:32 AM
Warren buffet don't know nothing.

Mecca
10-31-2008, 11:32 AM
Yea I tend to disagree seeing as I'm not worth millions and won't be, so flat tax uh no.

HolyHandgernade
10-31-2008, 11:33 AM
Why do you and Warren hate America and real Americans?

-HH

Ultra Peanut
10-31-2008, 11:33 AM
He am have been a bamboozled!

Thats the best tax we could have.It's called sarcasm.

But yeah, let's shift the burden from the people who have an incomprehensibly large amount of resources to those who have very few. Yeah, that makes sense. That'll help the economy recover.

ziggysocki
10-31-2008, 01:17 PM
We need tiered flat percentages that go up the more you make once you get to the point of extreme excess. I don't see it as penalizing the success, when even if I take 70% of your income and you still have more money than 95% of all Americans. Buffet has more to lose than almost anyone by paying higher taxes, yet still chooses to tell the truth. Could it be there is some integrity left in the world?

Donger
10-31-2008, 01:19 PM
Buffett gets the vast portion of his income from capital gains, taxed at 15% What does Barack Hussein raising it to?

donkhater
10-31-2008, 01:24 PM
Personally, I think Buffet should be offended. Offended that his secratary is paying so much, not that he is paying so little.

People have to start re-thinking the role of government in their lives or the problems we are facing today are just going to snowball.

Shrink the size of the budget and government, and you weed out the special interests and the lobbiuists all looking for favors and handouts because the government won't have the money to help them----you will.

jidar
10-31-2008, 01:27 PM
Buffett gets the vast portion of his income from capital gains, taxed at 15% What does Barack Hussein raising it to?

Obamas plan includes raising Capital Gains tax to 20% for people making over $250k/year

Honestly capital gains should be the highest taxed type of income anyway.

donkhater
10-31-2008, 01:32 PM
Obamas plan includes raising Capital Gains tax to 20% for people making over $250k/year

Honestly capital gains should be the highest taxed type of income anyway.

Honestly, captial gains taxes should have been the first thing to go once the credit crisis hit. Investers would've flooded the market to ease the brunt of writing off these bad assets companies hold. Sure, revenues would've gone down, and the deficit would've increased, but what do you think a trillion dollars in bailout money did to the deficit?

steelyeyed57
10-31-2008, 01:43 PM
Obamas plan includes raising Capital Gains tax to 20% for people making over $250k/year

Honestly capital gains should be the highest taxed type of income anyway.

People who say things like this do not understand how capital gains taxes put a stranglehold on the economy.
If you are going to sell something worth a lot of money, and you have to give a vast portion of the value over to the government, in addition to your income tax, don't you think that will make you think twice about selling it? Its these transactions NOT happening that make the economy shrink.

ziggysocki
10-31-2008, 01:49 PM
People who say things like this do not understand how capital gains taxes put a stranglehold on the economy.
If you are going to sell something worth a lot of money, and you have to give a vast portion of the value over to the government, in addition to your income tax, don't you think that will make you think twice about selling it? Its these transactions NOT happening that make the economy shrink.

So according to this they just hold on to it and make no money as opposed to less money? I'm no economist, but that sounds strange to me.

RJ
10-31-2008, 02:26 PM
Why do you and Warren hate America and real Americans?

-HH



This coming from HHG, a guy who lives in FakeAmerica.

whoman69
10-31-2008, 02:34 PM
This coming from HHG, a guy who lives in FakeAmerica.

Is that where joe the plumber is from? Oh, sorry that was imaginary America.

jidar
10-31-2008, 02:46 PM
People who say things like this do not understand how capital gains taxes put a stranglehold on the economy.
If you are going to sell something worth a lot of money, and you have to give a vast portion of the value over to the government, in addition to your income tax, don't you think that will make you think twice about selling it? Its these transactions NOT happening that make the economy shrink.

All taxes slow down economies, but I find it difficult to believe that capital gains are more important to the economy than say worker wages.

jidar
10-31-2008, 02:48 PM
So according to this they just hold on to it and make no money as opposed to less money? I'm no economist, but that sounds strange to me.

Yeah. I know the 30% the middle class are paying on income tax is why nobody in the middle class is working.

Oh wait.. no it would be because of all the corporations shutting down factories.

whatsmynameagain
10-31-2008, 02:56 PM
the repukelicans are not acknowledging buffet, WHY??? yeah socialist!

patteeu
10-31-2008, 02:57 PM
Obamas plan includes raising Capital Gains tax to 20% for people making over $250k/year

Honestly capital gains should be the highest taxed type of income anyway.

Are you sure about that? The last time I heard him talking about this subject he was talking about 25 to 28%.

I'd bet that within his first term he will attempt to raise capital gains tax rates above 20% for people with total incomes below $250K.

Chief Henry
10-31-2008, 03:06 PM
Buffett gets the vast portion of his income from capital gains, taxed at 15% What does Barack Hussein raising it to?

Most of the libs have no clue what a Capital Gain is. Thus they don't know what your talking about.

jidar
10-31-2008, 03:06 PM
Are you sure about that? The last time I heard him talking about this subject he was talking about 25 to 28%.

I'd bet that within his first term he will attempt to raise capital gains tax rates above 20% for people with total incomes below $250K.

The plan is up on his website.

http://www.barackobama.com/pdf/taxes/Factsheet_Tax_Plan_FINAL.pdf

From the section on Capital Gains:

Capital Gains: Families with incomes below $250,000 will continue to pay the capital gains rates
that they pay today. For those in the top two income tax brackets – likewise adjusted to affect only
families over $250,000 – Obama will create a new top capital gains rate of 20 percent. Obama’s 20%
rate is equal is the lowest rate that existed in the 1990s and the rate that President Bush proposed in
2001. It is almost a third lower than the rate that President Reagan signed into law in 1986.vii

jidar
10-31-2008, 03:07 PM
Most of the libs have no clue what a Capital Gain is. Thus they don't know what your talking about.

It's "you're".
But then what do I know about spelling, I'm in here making arguments that result in me being labeled as "liberal".

Carlota69
10-31-2008, 03:10 PM
Is that where joe the plumber is from? Oh, sorry that was imaginary America.

Watch what you say about Joe the Plumber. He's an American hero you know.

:rolleyes:

patteeu
10-31-2008, 03:36 PM
That was the class warfare and it was being waged against the middle class.

Wrong. Buffet's fun with percentages doesn't change the fact that there is still a transfer of income from the high earners to the lower earners taking place. To the extent that the higher earners are engaged in class warfare it's a defensive battle.

And then there's this (http://www.taxfoundation.org/blog/show/23856.html):

[A] new study on inequality by researchers at the Organization for Economic Cooperation and Development (OECD) in Paris reveals that when it comes to household taxes (income taxes and employee social security contributions) the U.S. "has the most progressive tax system and collects the largest share of taxes from the richest 10% of the population."

2bikemike
10-31-2008, 04:35 PM
I think Warren Buffet is a notroriously cheap bastard. Why is one of the richest men in the world keeping his secretary so poor. She should be rich as all get out. She has access to the best investment advice. She should have a very decent salary.

What gives Warren?

BIG_DADDY
10-31-2008, 04:39 PM
I think Warren Buffet is a notroriously cheap bastard. Why is one of the richest men in the world keeping his secretary so poor. She should be rich as all get out. She has access to the best investment advice. She should have a very decent salary.

What gives Warren?

He's an asshole.

jidar
10-31-2008, 04:49 PM
I think Warren Buffet is a notroriously cheap bastard. Why is one of the richest men in the world keeping his secretary so poor. She should be rich as all get out. She has access to the best investment advice. She should have a very decent salary.

What gives Warren?

I'm sure she does very well, but you don't get to be the richest man in american by doing dumb shit like paying seven figure salaries to secretaries.

BucEyedPea
10-31-2008, 04:52 PM
Not everyone respects Warren Buffet. He's a carpetbagger.

BIG_DADDY
10-31-2008, 04:55 PM
I'm sure she does very well, but you don't get to be the richest man in american by doing dumb shit like paying seven figure salaries to secretaries.

He's not the richest but if you look at 1 and 3 I'll bet their secretaries are majorly set for life.

2bikemike
10-31-2008, 04:56 PM
I'm sure she does very well, but you don't get to be the richest man in american by doing dumb shit like paying seven figure salaries to secretaries.

I bet she doesn't pay 30% in taxes either. I would bet her effective tax rate is down around 12-15% even if she is knocking down 6 figures.

jidar
10-31-2008, 04:57 PM
I bet she doesn't pay 30% in taxes either. I would bet her effective tax rate is down around 12-15% even if she is knocking down 6 figures.

What basis do you have to say something like that?

2bikemike
10-31-2008, 05:02 PM
What basis do you have to say something like that?

Because I know what my effective tax rate is in the 12 to 15% range, and its no hard to be in that range.

Calcountry
10-31-2008, 05:05 PM
and won't be.This is why you never will be.

patteeu
10-31-2008, 05:34 PM
I bet she doesn't pay 30% in taxes either. I would bet her effective tax rate is down around 12-15% even if she is knocking down 6 figures.

Buffet is including both income tax and payroll taxes to maximize the distorted picture he's painting.

2bikemike
10-31-2008, 05:37 PM
Buffet is including both income tax and payroll taxes to maximize the distorted picture he's painting.

I agree.

jidar
10-31-2008, 05:37 PM
Buffet is including both income tax and payroll taxes to maximize the distorted picture he's painting.

No he isn't.
Why would you say that?

patteeu
10-31-2008, 05:57 PM
No he isn't.
Why would you say that?

Because I've read what you posted on the subject. Are you denying that he's including payroll taxes in his analysis?

Mecca
10-31-2008, 06:00 PM
This is why you never will be.

That's better than being KC Johnnys boyfriend though huh, so still me>you

BucEyedPea
10-31-2008, 06:07 PM
That's better than being KC Johnnys boyfriend though huh, so still me>you

So a Milky Way trumps a bunny trader now?

BTW did you have a Milky Way today?

Mecca
10-31-2008, 06:08 PM
So a Milky Way trumps a bunny trader now?

BTW did you have a Milky Way today?

You must dream of me when you go to bed...

BucEyedPea
10-31-2008, 06:10 PM
You must dream of me when you go to bed...

No, but I do get reminded of you in the supermarket check-out line when I have to look at the candy rack.

Mecca
10-31-2008, 06:11 PM
No, but I do get reminded of you in the supermarket check-out line when I have to look at the candy rack.

Does that make you tingle?

BucEyedPea
10-31-2008, 06:12 PM
Does that make you tingle?

No. It makes me think of you as Willy Wonka.

Mecca
10-31-2008, 06:14 PM
No. It makes me think of you as Willy Wonka.

Just call me Willy Wanker and if you want a good time....:)

Mr Luzcious
10-31-2008, 06:28 PM
Thats the best tax we could have.

well, no, that would be no tax.

2bikemike
10-31-2008, 07:36 PM
No he isn't.
Why would you say that?

Have you ever sit down and calculated your federal effective tax rate? Not what they take out of your paycheck each payday.

KC Jones
10-31-2008, 08:51 PM
I for one am disturbed and disgusted that he's actually talking about putting the top brackets back to their 2002 rates. If you put this in historical perspective it's even more disturbing...

<table style="text-align:center" border = "1">
<tr>
<th colspan="5">Partial History of<br />
U.S. Federal Income Tax Rates<br />
Since 1913</th>
</tr>
<tr>
<th>Applicable<br />
Year</th>
<th>Income<br />
brackets</th>

<th>First<br />
bracket</th>
<th>Top<br />
bracket</th>
<th>Source</th>
</tr>
<tr>
<th>1913-1915</th>
<td>-</td>
<td>1%</td>

<td>7%</td>
<td>Census</td>
</tr>
<tr>
<th>1916</th>
<td>-</td>
<td>2%</td>
<td>15%</td>
<td>Census</td>
</tr>

<tr>
<th>1917</th>
<td>-</td>
<td>2%</td>
<td>67%</td>
<td>Census</td>
</tr>
<tr>
<th>1918</th>
<td>-</td>

<td>6%</td>
<td>73%</td>
<td>Census</td>
</tr>
<tr>
<th>1919-1920</th>
<td>-</td>
<td>4%</td>
<td>73%</td>
<td>Census</td>

</tr>
<tr>
<th>1921</th>
<td>-</td>
<td>4%</td>
<td>73%</td>
<td>Census</td>
</tr>
<tr>
<th>1922</th>
<td>-</td>

<td>4%</td>
<td>56%</td>
<td>Census</td>
</tr>
<tr>
<th>1923</th>
<td>-</td>
<td>3%</td>
<td>56%</td>
<td>Census</td>

</tr>
<tr>
<th>1924</th>
<td>-</td>
<td>1.5%</td>
<td>46%</td>
<td>Census</td>
</tr>
<tr>
<th>1925-1928</th>
<td>-</td>

<td>1.5%</td>
<td>25%</td>
<td>Census</td>
</tr>
<tr>
<th>1929</th>
<td>-</td>
<td>0.375%</td>
<td>24%</td>
<td>Census</td>

</tr>
<tr>
<th>1930-1931</th>
<td>-</td>
<td>1.125%</td>
<td>25%</td>
<td>Census</td>
</tr>
<tr>
<th>1932-1933</th>
<td>-</td>

<td>4%</td>
<td>63%</td>
<td>Census</td>
</tr>
<tr>
<th>1934-1935</th>
<td>-</td>
<td>4%</td>
<td>63%</td>
<td>Census</td>

</tr>
<tr>
<th>1936-1939</th>
<td>-</td>
<td>4%</td>
<td>79%</td>
<td>Census</td>
</tr>
<tr>
<th>1940</th>
<td>-</td>

<td>4.4%</td>
<td>81.1%</td>
<td>Census</td>
</tr>
<tr>
<th>1941</th>
<td>-</td>
<td>10%</td>
<td>81%</td>
<td>Census</td>

</tr>
<tr>
<th>1942-1943</th>
<td>-</td>
<td>19%</td>
<td>88%</td>
<td>Census</td>
</tr>
<tr>
<th>1944-1945</th>
<td>-</td>

<td>23%</td>
<td>94%</td>
<td>Census</td>
</tr>
<tr>
<th>1946-1947</th>
<td>-</td>
<td>19%</td>
<td>86.45%</td>
<td>Census</td>

</tr>
<tr>
<th>1948-1949</th>
<td>-</td>
<td>16.6%</td>
<td>82.13%</td>
<td>Census</td>
</tr>
<tr>
<th>1950</th>
<td>-</td>

<td>17.4%</td>
<td>84.36%</td>
<td>Census</td>
</tr>
<tr>
<th>1951</th>
<td>-</td>
<td>20.4%</td>
<td>91%</td>
<td>Census</td>

</tr>
<tr>
<th>1952-1953</th>
<td>-</td>
<td>22.2%</td>
<td>92%</td>
<td>Census</td>
</tr>
<tr>
<th>1954-1963</th>
<td>-</td>

<td>20%</td>
<td>91%</td>
<td>Census</td>
</tr>
<tr>
<th>1964</th>
<td>-</td>
<td>16%</td>
<td>77%</td>
<td>Census</td>

</tr>
<tr>
<th>1965-1967</th>
<td>-</td>
<td>14%</td>
<td>70%</td>
<td>Census</td>
</tr>
<tr>
<th>1968</th>
<td>-</td>

<td>14%</td>
<td>75.25%</td>
<td>Census</td>
</tr>
<tr>
<th>1969</th>
<td>-</td>
<td>14%</td>
<td>77%</td>
<td>Census</td>

</tr>
<tr>
<th>1970</th>
<td>-</td>
<td>14%</td>
<td>71.75%</td>
<td>Census</td>
</tr>
<tr>
<th>1971-1981</th>
<td>15 brackets</td>

<td>14%</td>
<td>70%</td>
<td>IRS</td>
</tr>
<tr>
<th>1982-1986</th>
<td>12 brackets</td>
<td>12%</td>
<td>50%</td>
<td>IRS</td>

</tr>
<tr>
<th>1987</th>
<td>5 brackets</td>
<td>11%</td>
<td>38.5%</td>
<td>IRS</td>
</tr>
<tr>
<th>1988-1990</th>
<td>3 brackets</td>

<td>15%</td>
<td>33%</td>
<td>IRS</td>
</tr>
<tr>
<th>1991-1992</th>
<td>3 brackets</td>
<td>15%</td>
<td>31%</td>
<td>IRS</td>

</tr>
<tr>
<th>1993-2000</th>
<td>5 brackets</td>
<td>15%</td>
<td>39.6%</td>
<td>IRS</td>
</tr>
<tr>
<th>2001</th>
<td>5 brackets</td>

<td>15%</td>
<td>39.1%</td>
<td>IRS</td>
</tr>
<tr>
<th>2002</th>
<td>6 brackets</td>
<td>10%</td>
<td>38.6%</td>
<td>IRS</td>

</tr>
<tr>
<th>2003-2008</th>
<td>6 brackets</td>
<td>10%</td>
<td>35%</td>
<td>IRS</td>
</tr>
</table>

Mr. Kotter
10-31-2008, 11:18 PM
I for one am disturbed and disgusted that he's actually talking about putting the top brackets back to their 2002 rates. If you put this in historical perspective it's even more disturbing...


I'm a Reagan-Democrat; a big Reagan fan.....I'd love to see Ronnie's 1987-1989 rates, again.

Even Reagan had a more realistic idea of what is "fair," than the "silver-spoon" Bush boys have.

:)

Logical
10-31-2008, 11:46 PM
He's not the richest but if you look at 1 and 3 I'll bet their secretaries are majorly set for life.What, he is the richest man in the world not just the US. Don't believe me check out Forbes

http://www.forbes.com/2008/03/05/richest-people-billionaires-billionaires08-cx_lk_0305billie_land.html

patteeu
11-01-2008, 08:30 AM
I for one am disturbed and disgusted that he's actually talking about putting the top brackets back to their 2002 rates. If you put this in historical perspective it's even more disturbing...



I get the sarcasm, but if you want an apples to apples comparison you'd have to account for all the crazy tax shelters that were eliminated as a part of the Reagan era package that brought the top tax rates way down. A 71% marginal rate in 1970 with tax shelters in place would be a much lower effective tax rate than a 71% marginal rate under the current code. I couldn't begin to tell you how 1970's 71% rate compares to Obama's proposed return to a 39% top rate. I just know that your comparison is meaningless.

BigChiefFan
11-01-2008, 08:31 AM
Wow, It's good to see some common sense out of these fat cats.

KC Jones
11-01-2008, 08:57 AM
I get the sarcasm, but if you want an apples to apples comparison you'd have to account for all the crazy tax shelters that were eliminated as a part of the Reagan era package that brought the top tax rates way down. A 71% marginal rate in 1970 with tax shelters in place would be a much lower effective tax rate than a 71% marginal rate under the current code. I couldn't begin to tell you how 1970's 71% rate compares to Obama's proposed return to a 39% top rate. I just know that your comparison is meaningless.

But then you'd have to compare that to the lack of any tax shelters during the 20's, 30's and so on. Ultimately what you end up with is that we have a ridiculous budget on both the spending and revenue side and nearly all time lowest top tax rates.

banyon
11-01-2008, 09:01 AM
I get the sarcasm, but if you want an apples to apples comparison you'd have to account for all the crazy tax shelters that were eliminated as a part of the Reagan era package that brought the top tax rates way down. A 71% marginal rate in 1970 with tax shelters in place would be a much lower effective tax rate than a 71% marginal rate under the current code. I couldn't begin to tell you how 1970's 71% rate compares to Obama's proposed return to a 39% top rate. I just know that your comparison is meaningless.

I'm not familiar with this. Which tax shelters did Reagan eliminate? That seems like an oddity given his other economic policies.

patteeu
11-01-2008, 10:06 AM
I'm not familiar with this. Which tax shelters did Reagan eliminate? That seems like an oddity given his other economic policies.

Reagan's goal was to flatten the tax rate structure and broaden it's base not to give fat cats special deals. The compromise of the 1986 Tax Reform was a dramatic flattening of the tax structure along with eliminations of many of the devices that those fat cats used to avoid the previously high top marginal rates.

In addition to putting caps on some deductions (e.g. IRA contributions, home mortgage deductions), and eliminating the deductibility of certain types of consumer loan interest, the Reagan era ended the days of rich people avoiding taxes by investing passively (http://cwx.prenhall.com/bookbind/pubbooks/dye4/medialib/docs/tax1986.htm) in such things as Chinchilla Farms which were designed to generate big paper losses:

The investment tax credit for purchase of depreciable assets was eliminated. Both short term depreciation schedules and the use of accelerated depreciation were eliminated, setting new cost recovery periods of 27.5 years for residential rental property and 31.5 years for nonresidential property. This, along with new passive loss limitation rules, caused a sharp decline in the use of tax shelters by the wealth. (The passive loss limitation rule disallowed losses from activities in which the taxpayer did not materially participate as a current deduction against all sources of income except for other passive activities. )

Jeffrey Birnbaum and Allan Murray wrote a good book called The Showdown at Gucci Gultch (http://www.amazon.com/Showdown-Gucci-Gulch-Alan-Murray/dp/0394758110) about the 1986 Tax Reform that described the way both parties in Washington came together and denied the high powered special interest lobbyists of the day who fought tooth and nail to preserve the system of tax loopholes that had become a part of the tax code.

http://ecx.images-amazon.com/images/I/71ET0SEAACL._SL500_BO2,204,203,200_AA219_PIsitb-sticker-dp-arrow,TopRight,-24,-23_SH20_OU01_.gif

And a word to the wise: The higher marginal tax rates go, the stronger the pressure there will be from moneyed interests who want to generate new loopholes in the tax code. Every loophole will make economic sense when viewed from one perspective or another and there won't be any money funding lobbyists to argue the other side. If the top marginal tax rate is 28%, the most a tax shelter can be worth is 28 cents on the dollar. If the rate were to be pushed to 70% (pre-Reagan), the incentive becomes 70 cents on the dollar. IOW, the higher tax rates go, the more intense (and effective) special interest tax lobbying will get.

patteeu
11-01-2008, 10:16 AM
But then you'd have to compare that to the lack of any tax shelters during the 20's, 30's and so on. Ultimately what you end up with is that we have a ridiculous budget on both the spending and revenue side and nearly all time lowest top tax rates.

Then we agree that your list of top marginal rates was less of an argument than meets the eye. I'm not sure why you continue the malarky with your reference to "nearly all time lowest top tax rates" at the end.

There are a lot of good things for the country that come out of low top marginal tax rates. And low top rates certainly don't correlate with low revenue.

BigChiefFan
11-01-2008, 10:30 AM
I think I'll defer to Warren Buffett when it comes to money.

banyon
11-01-2008, 10:38 AM
Reagan's goal was to flatten the tax rate structure and broaden it's base not to give fat cats special deals. The compromise of the 1986 Tax Reform was a dramatic flattening of the tax structure along with eliminations of many of the devices that those fat cats used to avoid the previously high top marginal rates.

In addition to putting caps on some deductions (e.g. IRA contributions, home mortgage deductions), and eliminating the deductibility of certain types of consumer loan interest, the Reagan era ended the days of rich people avoiding taxes by investing passively (http://cwx.prenhall.com/bookbind/pubbooks/dye4/medialib/docs/tax1986.htm) in such things as Chinchilla Farms which were designed to generate big paper losses:



Jeffrey Birnbaum and Allan Murray wrote a good book called The Showdown at Gucci Gultch (http://www.amazon.com/Showdown-Gucci-Gulch-Alan-Murray/dp/0394758110) about the 1986 Tax Reform that described the way both parties in Washington came together and denied the high powered special interest lobbyists of the day who fought tooth and nail to preserve the system of tax loopholes that had become a part of the tax code.

http://ecx.images-amazon.com/images/I/71ET0SEAACL._SL500_BO2,204,203,200_AA219_PIsitb-sticker-dp-arrow,TopRight,-24,-23_SH20_OU01_.gif

And a word to the wise: The higher marginal tax rates go, the stronger the pressure there will be from moneyed interests who want to generate new loopholes in the tax code. Every loophole will make economic sense when viewed from one perspective or another and there won't be any money funding lobbyists to argue the other side. If the top marginal tax rate is 28%, the most a tax shelter can be worth is 28 cents on the dollar. If the rate were to be pushed to 70% (pre-Reagan), the incentive becomes 70 cents on the dollar. IOW, the higher tax rates go, the more intense (and effective) special interest tax lobbying will get.

Interesting stuff. I'd like to look at the revenue results too. I'll look them up in a bit.