Short of sticking money in a mattress and sitting on it, all use of money creates jobs. If you, for example, taxed the wealthy a lot and the poor nothing at all, there might be an expanded amount of money spent on radio systems, casinos, and apartment building contractors. This necessitates the creation of jobs to meet the demand in these areas.
If you taxed the poor a lot and the wealthy not at all, there might be an expanded amount of money spent on yachts, private jets, and personal chefs. Again, this will necessitate the creation of jobs to meet the demand.
It’s impossible to spend money and not be paying for someone, somewhere, to be making a living. The only question is what work it is that the person is doing.
But that’s just a big circle. I pay you to make food. You pay me to give you the food that you just made. What we really want, is to enable you to make double the amount of food, in the same amount of time. Thus we invest in new technologies and new methodologies, because that’s what turns everything from a big unchanging loop, into a growing system, where each generation has better medicines, an abundance and variety of foods, a nicer living space, etc.
Investment money, more than any other use of money, goes towards advancing technologies. That’s the theory.
If by issue you mean, “is it numerically possible whereby someone can make a mil and not pay any federal tax”? Then yes. If by issue you mean, “does this happen most of the time?” The answer clearly is no.
The ‘Buffett rule’ really ought to be called the ‘Buffett exception’. And Obama knows this; he brought out this strawman for political reasons, not because it was going to raise any great amount of money to reduce the deficit.
You can’t post an opinion on a politician’s motives once sentence, then the next claim you’re only providing facts in the next.
Follow up question: Does anyone (including Obama) have an estimate for how much tax revenue the Buffett Rule addresses? Does it actually make a hypothetical dent in the deficit?
Obvious error is obvious. The amount that the government pays in social security benefits is related to the amount that one has paid into the system. So go ahead and eliminate the income limit; that’ll just mean that my social security checks get bigger. (Actually, don’t do that; get rid of the system entirely.)
If you had 41% on those above one million for all types of income, not just capital gains it would raise slightly less than 5% of the current deficit. That is for 2009 which is the most recent year we have data for. 2009 was a very good year for the stock market and in a normal year capital gains would raise much less, even if you discount dynamic effects. Here is a link that discusses how much would be raised under various rates.
Most (all?) proposals to eliminate the income limit also want to keep benefits relatively the same as they are now regardless of contributions, or at least means-test them. So you’d get much less extra income, if anything, from the extra you’d put in over the cap.
I was speaking of tax incidence rates not income tax rates. His tax rate on income is 17%. Tax incidence is too complicated a subject to cover with any depth in a post, but a thumbnail is that tax incidence is when a person has to alter consumption to pay the tax. Mr Buffet is famously cheap and consumes a couple hundred thousand dollars a year. He paid around 7 million dollars in taxes. His tax incidence rate is consumption divided by his taxes paid. Thus his incidence rate is somewhere around 1,000% to 2,000%.
Somewhat lost in all this is the fact that the majority of taxes paid by Buffett is corporate tax. He owns one third of Berkshire Hathaway which pays corporate taxes to the tune of 5.6 billion dollars a year in corporate taxes. Part of the president’s proposal for the Buffet law is the lowering of the corporate rate. So if the Buffet Law passes Buffet will probably end up paying hundreds of millions of dollars fewer taxes than he does currently.
This is what I don’t get: is he including state taxes into his figures? Unless I’m reading wiki wrong, no one pays more than 35% in federal taxes currently, so his office can’t have a 36% average. And even to get to 35% he’d have to be paying them more than $379,151 a year, each.
As I understand it, he’s referring to all taxes. Including sales taxes, which the Right likes to ignore completely except for when they’re praising them as the best sort of tax possible.
I suspect he’s including all taxes paid on income. (I.e. not sales tax, not property taxes, not automobile license fees or taxes on gasoline…). Whatever shows up on your income tax forms as tax paid to a government. This would include federal income tax, social security, state income taxes, and if they work in Manhattan, city income tax.
I know once I compared income tax rates (as above) between my Canadian tax rate and similar employees in the New York office many years ago. They paid about the same as me. I did not have to pay health insurance.
In Eisenhower’s time the upper tax rate was 90 percent. We had plenty of rich people. We also were able to finance building the interstate road system. Now we can not even afford to repair it.
Taxes for the rich have been dropping steadily since . We are practically broke.
The tax breaks for the rich are not just found by smart tax accountants, but they are installed by congressmen who put them in due to special interest pressure. They were deliberately passed to benefit special groups of people.
I asked for a cite, and you failed to provide one. Where are you getting his consumption figures from? Furthermore, while I don’t quite agree with this definition of tax incidence, let’s go with it. So, he has very low consumption. Why should I care? What exactly is the relevance to an issue of tax rate policy?
Edit: Come to think of it, you have yet to provide a cite for a single factual claim you’ve made in this thread. Why should any of us believe you?
Then is he doing it unevenly? Counting it for them, but not himself? If you take his 17.5% and subtract out payroll taxes, you only get 10% and I have trouble believing there are enough loopholes in our tax system to account for that being an accurate figure.
Payroll taxes don’t apply to unearned income, so his overall payroll tax rate relative to his total income will be lower because he has a lot of unearned income.
The Social Security portion of payroll taxes are capped (6.2.% up to around $100k). For the year he was talking about his payroll tax contribution is probably something well under 2% (the 1.45% for Medicare is not capped).
ETA: And yeah, that only accounts for his earned income (salaries, wages, and tips). For Buffett, payroll taxes are negligible.