It could work! [Warren Buffett deficit proposal]

Really? Your “argument” is that the tiny fraction of the population that makes more than 5 mil has fully 50% of the income of a huge swath of the middle class? That’s an argument against taxing the rich?

I’m betting that along with 2x the income, the middle classers also have about 1,000x the basic living expenses, because there are so many more of them.

Take 10% of their income in extra taxes, and these people are HURTING. They’re now wondering if they can keep their home, their car, keep buying the clothes they need, paying their electric bill, etc. Take 20% from the $5M crowd, are they HURTING? Are they scared that their kids won’t get to go to college, or that they’ll fall into a financial death spiral if their car breaks down? I’m guessing not. I’m supposing they’ll have to deal with the horror of not being able to pay cash for their new chalet in Gstaad.

The rich are richer than they have been in a long time, and are taxed at a lower rate than they have been in a long time.

I think you missed the point of my post. This isn’t a “Democrat vs. Republican” thing-I was just trying to give a silly example of a “simple solution” to a problem that involves a large group voluntarily working against their own best interests.

Soapbox (or bully pulpit) meets :smack:

But this is probably true everywhere. The bottom half have little wealth. I’ll bet there are countries where the the richest guy has more wealth than the bottom half. Someone like Moore will always be able to say “The top [some obscenely small number] Americans have more wealth than the bottom [some obscenely large number] people in the US.”

This whole argument is stupid. The vast majority of people in this country have little wealth, and return almost all of their income to the economy. The tiny percentage of people who control more of the wealth in this country than ever before in history are not doing that because they have no reason to as a result of their successful purchase of the US government.

Sure, but the point is that it’s gotten worse over the last 20-30 years. The same percentage of wealth is concentrated into fewer and fewer hands with the passing years.

Put another way, compare the amount of wealth held by the top 1% of the population vs the bottom 40% of the population. That’s more fair than 400 people vs 150 million or whatever. Now compare the percentage of wealth held by that top 1% vs the bottom 40% in 1960 vs 2010.

Also, compare those numbers for different countries. The top 1% in most western European countries will still have a lot of money, but, as a percentage, will be lower than the US. In fact, the inequality in the distribution in the US is comparable to those of poor Latin American and African nations. It’s a little shocking when you compare those stats across countries.

Sounds like a good start to me.

I am so sick of hearing that you guys should raise taxes OR cut spending. The reality is that both need to be done in order to reduce the deficit.

We don’t need to reduce the deficit. We need to increase the size of the economy so that the deficit is a smaller percentage of the total economy. Reducing the deficit is pointless.

I choose to assume Buffet was being facetious, becasue the thought of someone with his wealth and influence seriously believing this dopey idea is scary, like finding out Bill Gates is a birther, or something.

If you watch the video, you can see that Buffet laughs at the end of his proposal. He was clearly joking, but making a point at the same time.

Wealth numbers are very difficult to obtain - they’re all done via various proxies (as opposed to income numbers that governments, to one degree or another depending on tax compliance, can generate). The distribution of wealth in a country is pure guessing in most regions of the world.

From Wealth, Income, and Power

         Total Net Worth 
      Top 1%  Next 19%  Bottom 80 % 
1983  33.8%    47.5%       18.7% 
1989  37.4%    46.2%       16.5% 
1992  37.2%    46.6%       16.2% 
1995  38.5%    45.4%       16.1% 
1998  38.1%    45.3%       16.6% 
2001  33.4%    51.0%       15.6% 
2004  34.3%    50.3%       15.3% 
2007  34.6%    50.5%       15.0% 

From one of the gazillion bodies established by the EU Commission (DSSW and LWS are wealth studies done in Europe)

              DSSW                 LWS	
	     top 10%  top 1%   top 10%  top 1%
DK            76.4     28.8		
FI            42.3               45.0    13.0
FR            61.0     21.3		
DE            44.4               54.0    14.0
IE            42.3     10.4		
IT            48.5     17.2      42.0    11.0
NO            50.5			
ES            41.9     18.3		
SE            58.6               58.0    18.0
Switzerland   71.3     34.8		
UK            56.0     23.0      45.0    10.0
Australia     45.0			
Canada        53.0               53.0    15.0
Japan         39.3			
South Korea   43.1     14.0		
New Zealand   51.7			
USA           69.8     32.7      71.0    33.0

Unless you believe Africa has a boat load more wealthy people than most would believe, no way is the USA comparable (not sure why you would lump Latin America in there - individual countries maybe, and there are certainly countries in Africa that have a somewhat healthy middle class). And none of these studies try to factor in the nature of the bottom 20%, investment vehicles the middle class uses, cultural proclivity for savings, or a host of other things that affect the wealth of the middle class.

So, you have numbers showing that there is more income inequality in the US than every EU nation, save Switzerland. I’m trying (and failing) to see your point.

Again, take the top N% and compare to the bottom M%. Or look at the Gini coefficient. There surely aren’t tons of millionaires in these countries, but the few rich people have vastly more wealth than everybody else in those countries.

Are you missing my point?

It’s not that the US has a lot of wealthy people but that the wealth is concentrated in such a small percentage of the population. The US is remarkable for having a greater concentration of wealth in fewer hands than most developed nations. It exists in those other nations (as your charts show) but the US leans towards the unequal side of it. Developing nations (including those in Africa and Latin America) show as much or greater wealth inequality.

The point of comparing African/Latin American countries to the US is that they are mismanaged, corrupt governments that kowtow to the wealthy ruling class, ensuring poverty stricken lower classes. The fact that the United States has an income distribution (Gini coefficient, like the one in your link) comparable to these horribly run countries should give us pause. Sort this list by the CIA Gini, and you’ll note the only industrialized nations with a higher index are Singapore and Hong Kong.

We have much more wealth overall, but we’re not working to put that money in the hands of the lower classes, who kind of need it, like every other first world nation manages to do.

My post addressed wealth, not income, and I didn’t use any Gini coefficients.

If you want to compare Gini coefficients (following your links) then we’re right up there with other despotic regimes such as Sweden, Brazil and Switzerland.

You’re unlikely to find reliable measures of the distribution of wealth within third world countries. But using the world Gini-index and examining the Gini-index data for the developed world (and considering how little wealth there is in the undeveloped world), it’s easy to surmise that wealth distribution in the undeveloped world is really skewed. To assert that the undeveloped world is the appropriate comparison for the USA’s wealth distribution is, IMO, hyperbolic.

FWIW, a very similar law to what Buffett proposes has been passed in Brazil (albeit at the State, not Federal level).

I’m pretty sure you’re misreading this, both of our links have Ginis for Sweden at 23 (lowest in the world), and Switzerland at 33.7, with the US at 45. Brazil is horrible in terms of income disparity, it’s a major problem there, and they’re only as far above us as we are above Switzerland.

This is the point, wealth distribution in the undeveloped world is REALLY skewed, yet ours is MORE skewed than:
Burkina Faso
Ivory Coast

I think the only European country with a higher Gini than the US is Bosnia Herzegovina. Yay.


I guess if you think that the data I posted shows some great disparity in wealth distribution then I can see how you missed my point.

Unless you use a really large M% the comparison will be some comical number. The bottom M% have little (and if you took the very bottom, they’re likely to have negative wealth). Poor people are poor.

The USA does have a lot of wealthy people. It also has very high upward income mobility.

I showed data that illustrated that the distribution of wealth in the USA is, at least IMO, comparable to European countries. You assert the proper comparison is developing nations found in Africa and Latin America. I can understand your disagreement with my comparison but you’re going to have to provide some data that your comparison might be the more appropriate one.

Once again, my post and data was about wealth. You’re citing data about income. They’re not the same thing. Maybe this will help.

The Gini-index for wealth is here.

My data is not the same as a Gini-index. A Gini-index is not a percentage and I listed only percentages in my data.