Warren Buffett on Taxes

It's election season. Taxes are scheduled to rise sans intervention. Cue heated debates that involve few facts and lots of shouting.

Here, though, are some facts:


Source: Office of Management and Budget.

Tax receipts as a percentage of gross domestic product are extremely low on a historical basis. Most of this is because of the recession -- there's simply less income to tax. But here's another reason:


Source: Tax Policy Center.

Any rational debate on the fairness of raising top tax rates has to acknowledge that current rates are historically low to begin with. The focus shouldn't be on whether top rates go up or down; it should be on the raw level of rates. And right now, they're low. This is very likely why some wealthy corporate elites like Berkshire Hathaway's (NYSE: BRK-A  ) (NYSE: BRK-B  ) Warren Buffett, Bill Gates Sr. -- father of the Microsoft (Nasdaq: MSFT  ) co-founder -- and Netflix (Nasdaq: NFLX  ) CEO Reed Hastings have come out practically begging to have their taxes raised.

More specifically, here's Buffett yesterday:

We're going to have to get more [tax] money from somebody. The question is, do we get more money from the person that's going to serve me lunch today, or do we get it from me? I think we should get it from me. I have a lower tax rate, counting payroll taxes, than anybody in my office. And I don't have a tax shelter -- I just take the form and fill out the numbers. I think that's very wrong, and I think that if we're going to get money -- and we're going to need money; we are not taking in enough money at the federal government level ... it shouldn't be [from] the bottom 98%. It should be more from people at the top.

But is that the right thing to do with the economy in the dumps? Here's Buffett again:

If you get $100 billion more of taxes ... from people like me at the top, it means you borrow $100 billion less out of the economy. Somebody has to come up with that $100 billion ... you're taking the money from the economy either way. The only question is whether you take it by borrowing or by taxes. And I see no problem in taxing people at the very high levels significantly more than they're being taxed now. And I might very well cut taxes even further for the people at lower levels.

What do you think? Sound off in the comment section below.

Fool contributor Morgan Housel owns shares of Berkshire Hathaway and Microsoft. Berkshire Hathaway and Microsoft are Motley Fool Inside Value recommendations. Berkshire Hathaway and Netflix are Motley Fool Stock Advisor picks. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Berkshire Hathaway, and Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 06, 2010, at 4:18 PM, jimslag wrote:

    What is the incentive to do better and develop yourself if the only thing you have to look forward to is a higher percentage of taxes if you do well in life. The way the middle class is going now, I would do better by earning less and taking what the government gives out. I am a proud taxpayer but I believe I already pay to much and I am not even in the top tax bracket (yet!). By the way, I am still waiting on the IRS to send me some of MY money back, guess they are to broke to pay me back.

  • Report this Comment On October 06, 2010, at 4:19 PM, trav1m1m wrote:

    Let's not lose sight of Buffett's axiom here: "We're going to have to get more [tax] money from somebody". Is that a given? I think there are a lot more people who say that it would be a good idea to rein in government spending.

  • Report this Comment On October 06, 2010, at 4:28 PM, mrwizard555 wrote:

    once everybody acknowledges that taxes are a transfer of wealth from wealthy to those with less wealth, all debate goes away.

    quit trying to frame it in erms of reward and punishment.

  • Report this Comment On October 06, 2010, at 4:31 PM, aggie9711 wrote:

    I can think of a lot of things to before raising taxes

    kill tarp

    kill the stimulus

    cut the budget back to 2008 levels

    cut farm subsidies, electric car subsidies, etc etc

    cut unemployment benefits back to a reasonable level

    open federal lands and offshore to resource development and collect royalties.

    Mr Buffet seems more and more to me like another crony capitalist. I would urge him to go ahead and write a 45 billion dollar check to the treasury if he believes so strongly.

  • Report this Comment On October 06, 2010, at 4:36 PM, TMFHousel wrote:

    Not necessarily disagreeing that taxes disincentivize production or are wealth transfers. I just find it curious that so many (the tea party) waited until federal taxes were near historic lows before they started complaining about it. When Obama wants top marginal rates at 39%, he's a socialist. When Reagan had them at 50%, he was a capitalist hero.

  • Report this Comment On October 06, 2010, at 4:48 PM, bcoker2 wrote:

    Just raising taxes is definitely NOT the answer. There MUST be a concerted effort to also reduce the size and increase the efficiency of the federal government. There are many, many areas the federal government needs to simply get out of and thus save $$. A huge help would be to simply do away with the incredibly burdensome tax code and go to the Fair Tax - there are tons of built in benefits to such an approach.

  • Report this Comment On October 06, 2010, at 4:48 PM, notagamblerdc wrote:

    I love Buffet and my shares of Berkshire have done well over the years - but if he and his buddy Bill Gates are "practically begging" for higher tax rates on themselves, let them do us all a favor, stop whining and just write $50 billion checks to the treasury. What's stopping them? And leave the rest of us alone.

  • Report this Comment On October 06, 2010, at 4:48 PM, glake1 wrote:

    I agree wholeheartedly with Warren Buffet.

  • Report this Comment On October 06, 2010, at 4:51 PM, TMFHousel wrote:

    "stop whining and just write $50 billion checks to the treasury. What's stopping them?"

    Because $50 billion does absolutely nothing to a $3 trillion budget. If every billionaire was forced to, it'd make a difference.

  • Report this Comment On October 06, 2010, at 4:53 PM, toddsore wrote:

    It is perfectly acceptable for Warren Buffet, Bill Gates, Sr., and Reed Hastings to pay more taxes if they wish. But providing more tax revenue to a Congress completely devoid of restraint on the spending side is unconscionable, from my perspective. I would have virtually no resistance to higher tax rates (within reason) if I were confident that our government would use the revenue wisely. Discussion of tax rates and revenues absent discussion of spending restraint misses the mark by a wide margin.

  • Report this Comment On October 06, 2010, at 4:54 PM, kjjr wrote:

    While I respect Mr. Buffett's amazing business prowess, I am always confused by the concept that because one person thinks he isn't paying enough taxes, the solution is for all in his circle to pay more.

    I agree with the earlier post that there is nothing stopping Mr. Buffett and Mr. Gates from paying all the taxes they want. All they have to do is send the check.

    So far I have seen a lot of their money going to charity, which is terrific, but they could send it to the government just the same-if they think that is what needs to be done.

  • Report this Comment On October 06, 2010, at 4:56 PM, aggie9711 wrote:

    Morgan,

    I seem to remember ( though I was 7 at the time) that the Reagan tax cuts brought the top rate down to 28% in the end, not 50%.

    And it's not necessarily the taxes that make him a socialist. It's the GM takeover, $3+ trillion in debt in 2 years, Obamacare, etc etc etc etc......

  • Report this Comment On October 06, 2010, at 4:56 PM, t0bes wrote:

    Absolutely agree with Mr Buffet as well. I love the way he cuts through all the crap and speaks plain English! How could anyone disagree with him? It makes me want to buy some more BRK-B stock

  • Report this Comment On October 06, 2010, at 5:00 PM, AZBehr wrote:

    Why not acknowledge that every time taxes are lowered, revenues increase? Be true to history!

    Why not cut spending? Buffet is a smart guy, but does he really believe the answer is to continue feeding the beast? The fed could balance their budget easily just spending less.

    Does he realize how few people there are that can pay seven or eight figures in taxes without the slightest noticeable change in their lives? The bulk of "the rich" making more than 500k as a couple make just over that, not ten times. And their discretionary spending that keeps small businesses afloat is precisely what would stop if their taxes went up.

  • Report this Comment On October 06, 2010, at 5:00 PM, TMFHousel wrote:

    aggie9711,

    Top rates by year:

    1980-81: 70%

    1982-86: 50%

    1987-1989: 28%

    Half of Regan's term had 50% rates. Bush 1 really got the 28% boost.

  • Report this Comment On October 06, 2010, at 5:01 PM, markyaney wrote:

    who wants to pay taxes? not I, and especially not those who can afford lobbyists to help them evade taxes.

  • Report this Comment On October 06, 2010, at 5:01 PM, Wyeth027 wrote:

    The argument to extract more from the top 2% of income earners is specious at best. The problem is that our rates are generally high on an absolute basis, but not effective due to the many loopholes and techniques available to those with attorneys and CPA's skilled in the machinations of our fax code. A fair tax without subsidies or loopholes would produce more revenue and greatly lower the cost of tax preparation at the same time. Gates, Buffet and their ilk should be ignored. Paul Ryan's ideas are at least a basis for consideration and not the highly political ramblings of the super rich.

  • Report this Comment On October 06, 2010, at 5:02 PM, crabbydave wrote:

    There has to be rational discussion about what you want government to do, and then set taxes to support what you want it to do.

    Whether that means higher or lower taxes is neither here nor there. If you believe in smaller government then you need to mouth fewer slogans and define what you want the federal government to stop doing.

    The problem of the last decade or so is that people wanted lower taxes and more services. Bush the incompetent duly did so and has totally screwed up the government in the process.

    Now you have to make hard decisions, but most people wont, because when they realise they lose something personally they fight reduction in government spending. If you all really wanted lower government spending you would lobby your senators and congressmen to stop 'pork', that would reduce government spending by around 20% at a stroke. But any representative failing to fight for his or her state's share would be out at the next election, if they were not lynched first.

  • Report this Comment On October 06, 2010, at 5:03 PM, zymok wrote:

    Almost half of all wage earners in the U.S. pay no federal income tax. So I'd have to agree, tax rates are too low.

  • Report this Comment On October 06, 2010, at 5:03 PM, jomueller1 wrote:

    Yes, government spending is out of control and needs to be limited. The robbers in the senate and their cronies need to be put on a very short leash. Still, government has some need for taxes and I agree with Mr. Buffet that it is insane if his tax rate is lower than that of the guy who serves his lunch.

    May be a complete and honest comparison between various countries is needed, I think of Sweden Netherlands, New Zealand, and twenty others. When I say complete I mean all the taxes like the payroll taxes, sales tax (VAT), real estate (which is horrible in the US), taxes on services (which Florida does not charge), or internet orders (which go largely untaxed in the US). Then the benefits have to be counted like easy access to universities in many countries versus the outrageous price tag in the US. Also count the infrastructure like public transportation, access to arts and museums, access to parks, and so on.

    If US people would consider all this they may find that they pay less taxes but spend much more overall because of all those pesky fees. I prefer a high tax level country like Sweden or Germany at any time over the US.

  • Report this Comment On October 06, 2010, at 5:07 PM, nin4086 wrote:

    I hate graphs that don't begin with zero...the visual is so misleading.

    Yes, tax is wealth transfer. The trick is to do that in a way that does not take money away from the middle class. A very high tax rate on the very wealthy will not stifle entrepreneurs and innovation. There are enough people in the lower and middle classes with the drive and talent to continue that.

    Also worth mentioning in this context is Obama's campaign to collect money from corporations. That is not right, you should increase the tax on the income the executives and wealthy shareholders receive but not corporate earnings per se. That cost will just get passed on to consumers and lower our standard of living.

  • Report this Comment On October 06, 2010, at 5:08 PM, edvale wrote:

    Unfortunately, I think Warren has for once, not done the math. The top few paying more tax won't make any serious difference to the total tax receipts. His view is merely one of politics or morality, not economics.

  • Report this Comment On October 06, 2010, at 5:08 PM, tomager wrote:

    With all due respect to Mr Buffett, if upping the rates on high earners was the solution California, NY, NJ & Michigan would be economic powerhouses. Alas they are drowning in red ink and demanding the rest of the country bail them out. It's not a revenue problem, it's a spending problem.

  • Report this Comment On October 06, 2010, at 5:09 PM, dgiwiseguy wrote:

    Is a voluntary payment to the IRS a valid charitable contribution?

    Thanks, Scott

  • Report this Comment On October 06, 2010, at 5:09 PM, TMFHousel wrote:

    "I hate graphs that don't begin with zero...the visual is so misleading."

    The axes are clearly marked, and I don't think it's misleading at all. It highlights the change, which is the point of the chart.

  • Report this Comment On October 06, 2010, at 5:10 PM, Dannysea wrote:

    Isn't it a great set-in-place barrier when I who has lots, blocks the up-and-coming with an unsurmountable barrier? It keeps me quite exclusive. Well, in America anyway. Then the big and wealthy of tomorrow will be by and large Chinese, Japanese, Mexican.

  • Report this Comment On October 06, 2010, at 5:10 PM, wessew wrote:

    First, taxes should only be raised to close the deficit after government spending is cut and rationalized. Second, the debate about appropriate tax levels and raising rates needs to be taken in context of the condition of the economy. Third, President Obama keeps talking about not wanting to allow millionaires and billionaires to pay ultra low taxes and then sets the threshold at $200/250M. If he is worred about the wealthy, set the threshold at $1M to coincide with his rhetoric. Finally, small business taxes should not be raised in this environment. They do most of the hiring.

  • Report this Comment On October 06, 2010, at 5:11 PM, danoren wrote:

    First, let's evaluate why Mr Buffet and Mr Gates pay so little taxes.

    Berkshire Hathaway pays Mr Buffet a very low (relatively) salary. He used to say he paid himself $100,000 per year. I do not know what Mr. Gates makes, but we can guess it is very little realative to his net worth. Both of these people make money by having their company stock appreciate. Appreciated stock does not cause taxable income if unsold.

    Further, both of these individuals have recently given away billions of dollars to charities. These are deductions which can be used to further lower their tax bills.

    We as a country cannot worry about the hypocrisy of the extremely wealthy. We must be concerned about the competitiveness of our nation, the productivity of our system, and the state of the economy. Our sub s business tax is very high relative to the world and we continue to be on an economic precipice. Raising rates on these businesses will cause more unemployment, and may very well decrease tax revenue.

    Envy is no tax policy.

  • Report this Comment On October 06, 2010, at 5:13 PM, atodde wrote:

    I like most people would like think that some day through hard work and perseverance I will make it and be one of those 2%.individuals. That reality is I might. A very be might, and it's not going to happen any time soon.

    I agree with Buffet.

  • Report this Comment On October 06, 2010, at 5:14 PM, TMFHousel wrote:

    I should note that Buffett did indeed mention the need for spending cuts in his talk, but it was as a mumbled side note and didn't fit with what i quoted him on.

    Thanks for the comments, everyone.

  • Report this Comment On October 06, 2010, at 5:15 PM, TMFHousel wrote:

    "First, let's evaluate why Mr Buffet and Mr Gates pay so little taxes. Berkshire Hathaway pays Mr Buffet a very low (relatively) salary. He used to say he paid himself $100,000 per year."

    He has a boatload of money outside of BRK (1% of $50 billion is a lot), and has mentioned in the past that his yearly income is roughly $50 million.

  • Report this Comment On October 06, 2010, at 5:16 PM, wjcost wrote:

    warren, you are generous and rich--thanks from the middle class for your idea of funding the govt.

  • Report this Comment On October 06, 2010, at 5:16 PM, dbman5 wrote:

    Yes, I would personally like to pay lower taxes just like everyone else. However....

    I haven't seen anyone else present this concept but it seems to me that Buffet and others might come out *way* ahead by paying a bit more in taxes. Think about it ... having them pay 4% more in taxes may reduce the deficit enough to improve the economy - even if just a little bit - and then the stock prices may well increase by more than 4%. Oh, but wait (said with tongue firmly ensconced in cheek), Buffett, Gates, and others in those tax brackets don't own any stocks so improved stock prices wouldn't help them at all.

    They are in it for the money and I've heard a number wealthy people say they wouldn't mind paying more in taxes. There must be a reason. If they think it would be OK to increase taxes, you better believe it will be good for their bottom line. Time to put taxes back where they were 10 years ago and the economy was doing well.

  • Report this Comment On October 06, 2010, at 5:17 PM, TMFDiogenes wrote:

    "Why not acknowledge that every time taxes are lowered, revenues increase? Be true to history!"

    Um, no.

    Bush tax cuts:

    http://modeledbehavior.files.wordpress.com/2010/07/image9.pn...

    Reagan tax cuts:

    http://krugman.blogs.nytimes.com/2010/07/15/carter-reagan-re...

    "Second, the revenue track under Reagan looks a lot like the track under Bush: a drop in revenues, then a resumption of growth, but no return to the previous trend.

    This is exactly what you would expect to see if supply-side economics were just plain wrong: revenues are permanently reduced relative to what they would otherwise have been."

  • Report this Comment On October 06, 2010, at 5:20 PM, aggie9711 wrote:

    Morgan,

    OK, so you make my point. Who pushed that legislation? Reagan. And what was happening in the early 80s when those rates were enacted (even if they didn't come into effect until the second half of the decade)? A recession! And what happened to tax revenues over that time? They rose! (see also the GW Bush sequel last decade) So now, we have a recession, high unemployment, and a deficit that dwarfs any proceeding it and what does the administration want to do? Raise taxes! Economic brilliance!

    And if they really wanted to maximize revenues, they would raise middle class taxes (projected at $3 trillion in revenue) as opposed to just the "rich" ($700 in revenue).

    I wish they Dems would just own up and admit that they are playing class politics to stay in power. I have more respect for the blatantly corrupt than the hypocrites.

  • Report this Comment On October 06, 2010, at 5:21 PM, bhart3644 wrote:

    It would appear that the "Wanna Economists" posting above can't read the charts presented and simply want a tax break. Clearly, the tax revenue is now at a very low percentage of GDP. Do any of you get that? The government can cut spending all you like but getting it from around 151/2 % to around 181/2% is a big cut, especially while 2 wars are happening and we are on the verge of a major recession. Next, Take a look at the second chart. It looks to me like we are about at an all time low for taxes in the last 50+ years.

    So, it looks to me like we want to keep about the same level of services but have the other guy pay for it.

    Remember that the top guys still get the tax break on the first $250K of income.

    Listen carefully to Buffet. He's one of the good guys. Ya think Jack Welch deserves a break on his entire retirement package?

  • Report this Comment On October 06, 2010, at 5:21 PM, LammieL wrote:

    Buffet, Gates and their followers should focus on changing the whole tax code - like a flat tax and they should make a case for corporate rates that are competitive with our overseas friends.

    If they don't know how absurd our tax system is, they are out of touch with reality.

  • Report this Comment On October 06, 2010, at 5:22 PM, efhouse wrote:

    Both sides of the equation are going to have to change. I'm a have (versus a have-not). My taxes are going to have to go up. I accept that, and am willing to pay more. But federal spending is going to have to be cut, and I think the tax increases are going to have to be more widespread. In 2005, the lower class (bottom 25%) made up to $25,000/yr, which is very hard to run a household on. The middle class (25th to 75th percentile) made $25,000 up to $80,000, and the upper class, was $80,000 and up. I believe the upper class can afford to fund social programs to assist the bottom quartile. But the middle class has to live within its means and support itself.

    On the federal level, we've had no spending discipline for at least 10 years. Congress is going to have to set itself spending limits and make hard decisions on what gets funded and what gets cut to stay within those limits. Many people have suggested setting the budget back to 2008 and freezing it until we get our fiscal house in order. Others have suggested freezing at 17/18/19% of GDP. Either is fine with me. But we need to pick a limit, and start making the hard choices to get there.

  • Report this Comment On October 06, 2010, at 5:25 PM, clydejazz wrote:

    I have to agree with Buffett, Munger, Gates, Hastings, and Ted Turner.

    Getting mad at Obama is like yelling at a cop who shows up at an accident. We should be mad at the drunk driver(s) who got us here.

    Numerous studies, including a comprehensive one by John McCain's own economic adviser have shown that the bailout not only saved millions of jobs, but prevented another Depression. The CBO says that "Obamacare" could save us a trillion dollars over 10 years.

    I liked the tax rates during the Clinton Administration just fine--we had a booming economy and a budget surplus. We've had 10 years of the Bush tax cuts already, and look where it's taken us. Economists on both the left and right of the political spectrum don't agree on much, but they do agree on one thing--cutting taxes does not increase tax revenue--just the opposite.

  • Report this Comment On October 06, 2010, at 5:26 PM, aggie9711 wrote:

    @TMFDiogenes

    I have to call BS on your graphs. A true accounting would start from the bottom of the 2000-2001 recession as the baseline. And again on Krugman's graphs. According to Krugman's graph I could project shortfalls for Carter's administration too (look at the huge dip in the 74-76 recession).

    Also, of note, both of those dips came from recessions started in Dem administrations (or darn close in the case of the 82 recession). Coincidence?

  • Report this Comment On October 06, 2010, at 5:27 PM, Dannysea wrote:

    clydejazz, you write as if the prez sets the spending. Time to read the constitution again.

  • Report this Comment On October 06, 2010, at 5:32 PM, KBOKSOFT wrote:

    In answer to the question "What's my incentive for working harder if the government is just take more of my money in taxes", is (insert drumroll):

    Because the more money you make, the more you get to keep.

    You will "take home" more money if you make $300k than if you make $250k. You will keep more money if you make $1 million than if you make $999,999.

    It doesn't matter if the top tax bracket is 20% or 30% or 70%. The more you make, the more you keep.

    The 'Bob the Plumber' story, about the small business owner who is somehow discouraged from growing his business because of federal taxes, is completely specious. In the past, when the top marginal rate was much higher than today, people still tried (hard) to make more money. If the psychology of 'Bob the Plumber' were true, everyone would simply quit their jobs and live off welfare -- that way NONE of "their" money would go to the government; everyone would get paid to do nothing.

    ... But then we wouldn't be able to buy our flatscreen TVs and corvettes and, more importantly, we couldn't dream of some day being rich enough to complain about the tax rates in the top bracket.

    We will work harder and "better" ourselves because we are greedy and want to be rich, and because tax rates (however high or low) don't make that impossible.

  • Report this Comment On October 06, 2010, at 5:38 PM, cheesepare wrote:

    Now that Bill Gates and Warren Buffett have run out of ideas how to create wealth, they're incessantly clamoring to redistribute it. It's getting tiresome.

    Cut spending first and then talk about a modest tax increase. Otherwise we can be sure the money will be wasted.

  • Report this Comment On October 06, 2010, at 5:40 PM, maccdw wrote:

    W's high-end tax rate cuts started 9 years ago (2001) and have been 100% in place for 7 years (2003). In addition, W mailed out $150 Billion as "stimulus checks" to taxpayers in 2008. In W's 8 years in office, US nartional debt increased by 27% to more than $10 Trillion. This was the largest increase in US debt under ANY sitting President. Despite W having his way for 8 years, we still sunk into recession.

    All of this, of course, is now Obama's fault.

  • Report this Comment On October 06, 2010, at 5:42 PM, aggie9711 wrote:

    @KBOKSOFT

    No, but they make it harder to achieve. The taxes on Bob the Plumber's profits take the cash he could use to buy another truck and hire another plumber on staff, buy a piece of equipment, buy a bigger inventory of toilets, etc.

    Just because a small business profits $250K doesn't mean the owner takes that all home. Profits = more investments in the business.

  • Report this Comment On October 06, 2010, at 5:44 PM, TMFHousel wrote:

    "In W's 8 years in office, US nartional debt increased by 27% to more than $10 Trillion."

    Worse, actually. From $5.7 trillion to $10.6 trillion, or about 86%.

  • Report this Comment On October 06, 2010, at 5:49 PM, satrekker wrote:

    @aggie9711 in regards to your comment "cut unemployment benefits back to a reasonable level"

    Have you ever tried to live on unemployment benefits? Do you happen to know how much unemployment benefits are? The max amount one can be eligible for is $356.00 per week. I'd say there are a heck of a lot of people who consider unemployment benefits to be paltry compared to what their earnings were prior to losing their jobs.

    Increasing taxes isn't the be all, end all of our nation's fiscal problems. Our elected officials should pay particular attention to out of control government spending, corruption, waste and far too many poorly run entitlement programs as well as looking at tax rates.

  • Report this Comment On October 06, 2010, at 5:52 PM, aggie9711 wrote:

    And what was the budget deficit int he last fiscal year of full republican control (2007)? $167 billion. Which, coincidentally, was about the same as July's (or June's, can't remember exactly) budget deficit this year ($165 billion)

    How come I never hear an Fool writers talk about cutting spending? It always seems like the Fed government is a voracious monster, and we just need to debate how best to feed it, not how to put it on a diet.

    @satrekker

    I was referring to cutting the benefits period from the 2.5 years it is now (at which point it seems more like welfare), to something reasonable, like a year or less, not cutting the payment amounts.

  • Report this Comment On October 06, 2010, at 5:52 PM, KBOKSOFT wrote:

    @aggie9711

    I own a small business. When I buy hardware or hire an employee, that is a business expense. I don't pay taxes on it.

    Lets' say I bill $100,000 in a year and buy $5000 worth of equipment for my business. I made $95,000 and pay taxes on that. It's the same as if I worked for somebody who paid me a $95,000 salary.

    I literally take home my profits and don't pay taxes on my expenses. I am in no way discouraged from reinvesting in my business.

    In fact, it's the other way around. At the end of the year, I am ENCOURAGED to buy stuff for my business because that reduces my taxable profits.

    Maybe Bob the Plumber needs to hire a better accountant (an expense, which incidentally, he will not be taxed...)

  • Report this Comment On October 06, 2010, at 5:54 PM, mikenewsong wrote:

    It's plain common sense that tax cuts for the wealthy tend overall NOT to be spent; whereas tax cuts for people with less money go for more everyday expenses. When the top few percent of the people in our country make more than 25% of the wealth, something is seriously wrong and it has even been argued by prominent economists that it is this very inequity that is one of the root causes of our financial woes.

    I also believe that Obama kept us out of a Depression; unfortunately his response was also too tepid to lift us up out of the recession, as Paul Krugman has argued. We need to invest in a major way in infrastructure and future technologies (such as solar power, high speed rail, nanotechnology, etc.), like China is doing. We need to make financing available for startup businesses employing these technologies, for inventors, for people coming up with creative solutions. The one area our country has always had a lead in is creativity; let's promote it!

  • Report this Comment On October 06, 2010, at 5:56 PM, HappyJen100 wrote:

    Just a couple of comments:

    Line Item vetos

    Tax 1031 Exchanges

    I've never been able to spend my way out of debt

    Middle class needs to be redefined

    Do away with AMT

  • Report this Comment On October 06, 2010, at 5:59 PM, logiclibrary wrote:

    I keep hearing guys like Warren Buffett and Bill Gates pleading for the government to increase their taxes. If they both feel so strongly about this please explain what is preventing them from simply donating a few hundred million to the government?

    I also wonder if Mr Buffett and Mr Gates are in favor of leaving marginal income tax rates where they are at currently, while raising the cap gains rates? Bill Gates, Buffett, Larry Ellison... could care less what the marginal income tax rate is. I wonder if they will support taxing their cap gains at a much higher rate?

  • Report this Comment On October 06, 2010, at 6:00 PM, TMFHousel wrote:

    "And what was the budget deficit int he last fiscal year of full republican control (2007)? $167 billion. Which, coincidentally, was about the same as July's (or June's, can't remember exactly) budget deficit this year ($165 billion)"

    True, but over half of the deficit increase came from drops in tax revenue due to the recession (and tax cuts from the stimulus package).

    http://www.fool.com/investing/general/2010/02/09/sick-of-the...

    "How come I never hear an Fool writers talk about cutting spending?"

    http://www.fool.com/investing/general/2010/02/17/how-the-gov...

  • Report this Comment On October 06, 2010, at 6:01 PM, PALH wrote:

    I hope you fiscal geniuses who love your low taxes will think twice next time before letting your tax-cutting president start two trillion-dollar wars on borrowed money.

  • Report this Comment On October 06, 2010, at 6:04 PM, cthompso801 wrote:

    I agree with a lot of what Warren says. He is not stupid, or he wouldn't be worth billions of dollars.

    But, I think you have to put things in context, and wonder why he is asking the government to tax rich people more? He said he has a lower tax bracket than anyone in his office. Is this fair, and

    why does this situation exist?

    Because of our arcane tax laws, loopholes, charitable foundations that shield the rich from taxes, all perpetuated by the 95% of our government that is run by lawyers. Poor people don't have a chance!

    I wonder if Warren or Bill Gates Sr asked to pay more taxes as they were accumulating their wealth, or they now feel guilty and are buying their way into heaven?

    Someone should write a book about their motivations when they were younger as compared to their motivations today!

    I doubt taxing them 5% more would crimp their lifestyle very much.

    I also agree with others, that taxing more will make matters worse. We need to throw out the jerks in Congress who keep spending when there is less tax money coming in because of the recession. Let them take a 20% pay cut, or go on

    the unemployed roles, to see how it feels to be in

    private industry.

    Our country is going down a rathole, and will die like the Roman Empire if we don't change our

    spendthrift ways!

    I hesitated to post this, but I think the USA has to go back to the vision of our founding fathers,

  • Report this Comment On October 06, 2010, at 6:05 PM, TMFHousel wrote:

    "He said he has a lower tax bracket than anyone in his office. Is this fair, and why does this situation exist? Because of our arcane tax laws, loopholes, charitable foundations that shield the rich from taxes, all perpetuated by the 95% of our government that is run by lawyers. Poor people don't have a chance!"

    I think the main reason is that taxes on dividends and capital gains top at 15%, where as marginal income tops at 35%.

  • Report this Comment On October 06, 2010, at 6:06 PM, johnkjl wrote:

    Any senior executive knows that to execute a turnaround you need to control your burn rate by evaluating and killing a significant number of investments; continue to invest in promising new sources of revenue; protect and grow your base of revenue; reduce debt and seek out and deploy any operating expense reductions.

    Now apply that reasoning to the tax code and you have a pretty clear approach: rack and stack the investments and kill 50% of them (even entitlement programs if you can't make a strong case for them); invest where the returns are promising (energy, education, exports); raise taxes on individuals across the board with the wealthy paying a disproportionate higher share; pay down debt and chase with abandon any ways to do more with less.

    It will take some time but it will work.

  • Report this Comment On October 06, 2010, at 6:07 PM, dutchmanii wrote:

    Well Mr. Buffet plays into the wrong lead.

    What about the percent of GDP that the budget is.

    This is where we need to work as well as the tax structure.

    The tax structure should be set up like H.R. 25 "Fair Tax". That way even the hookers, pimps, drug dealers and people doing work under the table and yes that would include Mr. Buffet, as right now he writes off as a business expense any meeting expenses and such and then has the audacity to sit back and say well all he does is a little math problem and winds up paying less than most people in his office......

    Sure as the current tax structure is now he does.

    But what makes you think a corporation pays tax? People pay the tax because the corp tax is passed onto the people from the corp via increased prices of goods and services.

    What is needed is for people to really go a gut check and see if they want the corp box seat at the football, baseball, or race track to be part of their burden to the bottom line instead of an HONEST tax such as "The Fair Tax" where even an illegal allien will be taxed when he purchases even food.

    This is a set up for a lot of people to think the rich aren't taxed enough...... hahahaha

    What it really is, the elite have manipulated the current laws with words and phrases that require you to snowed while being told "I'm for the working man", or "the rich pay too little taxes", or some other lie and in the mean time side step the issue and place the burden on all the rest of us.

    Wake up and think... Oh yes, really do give the H.R. 25 "Fair Tax" a read..... it will take all of us to get that done because it would mean there would be no "Pork" to be controlled from any elected official, but they would have to do their job for real as it was intended and represent you.

  • Report this Comment On October 06, 2010, at 6:10 PM, KBOKSOFT wrote:

    Want to see America's super-wealthy get scared? How about a bill to get rid of income tax, and tax net worth instead?

    Forget salaries, bonuses, dividends, capital gains...

    Uncle Sam just wants a small fraction of Bill Gates' Microsoft stock... or BRK-A... or the Yankees...

    Talk about a disincentive to getting rich!

    I wonder how Buffett would feel about that?

    I wonder how the guy who's upside down on his house and owes zero in taxes because he has a negative net worth would feel about it?

  • Report this Comment On October 06, 2010, at 6:11 PM, irish77777777 wrote:

    I totally agree with Warren Buffet. It's time we stepped up to the plate as a country and took some responsibility for the spending of the Bush years and beyond. If we have a war, we have to raise the money to do it. We didn't and now the American people are paying the piper and it's wrong. Raise taxes, stop whining about government spending, which is always going to have some pork, and use the money to put people back to work in jobs that will improve our outdated infrastructure. We would all benefit.

  • Report this Comment On October 06, 2010, at 6:16 PM, Overstock wrote:

    Thank you Mr. Buffet for bringing a sane voice to the party. Hopefully someone in the press will actually provide some air-time for that perspective. As for the much of the other comments here....

    Greed, greed, everywhere. No one from the soon-to-be tea-mobster crowd said a thing about deficits when Bush II spit our surplus into the wind for two wars and a consumption-driven tax break that benefited the wealthy more than anyone....the outrage of the last 2 years is highly selective and hypocritical.

    The idea that someone who is running a successful business is going to pack up and go home because their tax rate went from 35% - 39% is preposterous, unless it is the same weenies and wimps who are manufacturing outrage over government spending but still collecting their unemployment checks, farm subsidies, etc. Besides - how may of you are actually paying the published rate when the year nets out? No one I assume...put some of the energy from the bizarre defense of the two-percenters' tax hike into running your business and the country will get back to work a lot faster...

  • Report this Comment On October 06, 2010, at 6:18 PM, libertarianlib wrote:

    I am nothing but disgusted by all of the whiners about raising taxes, whom I am sure most of which sanctioned the OFF budget and/or unpaid for expenditures for the lost decade of the '00's, pissed away for unnecessary wars, irrational defense spending, and tax cuts that produced nothing but a decline in the average annual income of the US middle class. Stop you whining, and explain to me how a huge fraction of the American people managed to get rich when the marginal income tax rates were well north of 50%

  • Report this Comment On October 06, 2010, at 6:19 PM, Taurcer wrote:

    I agree whole heartedly with Mr. Buffett's comments. I don't like paying taxes any more than the next person, but I shutter to think of the type of country we would have if the government stopped collecting them. No support for our armed forces or police services, no public education, no roads or other public works projects like dams and water projects, no support for the extremely poor or ill or the old. I could go on, but I think this illustrates the type of "dog eat dog" country we would have if the government deciced to stop working. Maybe there are some people who wouldn't mind this, but I think over time the US would be reduced to a third world country where the "haves" are perpetually in fear of the "have nots". Just think of Brazil or Mexico where kidmapping for ransom is a cottage industry. No, I'd rather keep the government in place and unfortunately, this means taxes. I read a few comments about taxation being a disincentive to work. This is a crazy statement. The tax would have to be 100% for it to be a disincentive. And I don't think people decide to work or not work based on their tax rate. Most people want to work and do it for reasons that have nothing to do with taxes. I say, roll back the tax rate on the top 2% to the pre-Bush tax rate, hold government spending at current levels unless offset by some other revenue generator (read taxes) and start to pay down the national debt. Then when we are in positive territory again look into reducing the tax rates. As I said before, I don't like paying taxes anymore than the next person, but given the alternative it is a necessary evil.

  • Report this Comment On October 06, 2010, at 6:30 PM, dbman5 wrote:

    @logiclibrary - "I keep hearing guys like Warren Buffett and Bill Gates pleading for the government to increase their taxes. If they both feel so strongly about this please explain what is preventing them from simply donating a few hundred million to the government?"

    Because they don't want to be the only ones. Remember, it's not about "feeling good" it's about helping their bottom line. If just one person pays, it won't make much difference to the overall situation an the result will hurt their bottom line. But if everyone pays then it can make a noticeable difference thus, as I mentioned previously, possibly improving things enough for an increase in the stock market to more than make up for the extra few % paid in taxes. (Note that "noticeable" isn't necessarily "huge".)

    As one of my bosses said many years ago, "I'd love to pay a million bucks in taxes. Just think how much I'd be making if that was the case!" The real issue isn't "How much am I paying in taxes" it's "What's my bottom line when all is said and done." I believe that Buffett and others are starting to believe that their bottom line will be better if they (as in "ALL people with high incomes") pay a bit more in taxes.

  • Report this Comment On October 06, 2010, at 6:36 PM, Slewdog wrote:

    Mr Wizzard wrote: "once everybody acknowledges that taxes are a transfer of wealth from wealthy to those with less wealth, all debate goes away"

    What you mean is the transfer of wealth to politicians to use as they see fit, honorably or more often, not.

  • Report this Comment On October 06, 2010, at 6:40 PM, militauro wrote:

    Buffet for president!

    I am (obviously) sided with those who think the top 2% should have to pay more. This is not, as someone above hinted at, to say that this is the price of getting rich. The impact to the lifestyle that taxes bring to the top 2% will hardly go noticed. I don't see the rich struggling to keep up with their lifestyle with this tax increase. Flip that around to the middle class and this tax rate hike has a huge impact on their lifestyle.

    One very last thing is that I agree 100% with a commenter above, @ toddsore, great comment sir. This tax talk is almost irrelevant with this incompetent congress. To me it feels like taxing the rich is a part time solution and it's almost inevitable congress will come back asking for more money within a few years. Congress looks like a teenager that can't get enough from charging their credit card.

  • Report this Comment On October 06, 2010, at 6:41 PM, richmacmf wrote:

    I believe that we do not have a revenue problem, we have a spending problem. Reduce spending. Stop the entitlements. Stop funding the Iman's trip to middle east to appease Muslim nations. Stop the expansion of government and reduce the size of government.

    Personally I pay enough taxes at 40% Fed and State. Reduce government size. Capitalism works and Socialism does not.

  • Report this Comment On October 06, 2010, at 6:45 PM, starbucks4ever wrote:

    Buffett is right.

  • Report this Comment On October 06, 2010, at 6:45 PM, pjhayes wrote:

    While I have a huge respect for Warren, I believe there is a vast difference between having him contribute more to the wellbeing of the country and having me do same. Money given to the government in increased taxes will become money poorly spent. See last week's article in the Wall Street Journal on the financial state of the US Postal Service for a perfect example.

  • Report this Comment On October 06, 2010, at 6:48 PM, Roth100 wrote:

    Warren Buffet makes so much sense! I hope that voters will listen to him because this is what needs to be done. ASAP!

  • Report this Comment On October 06, 2010, at 6:50 PM, thebigm50 wrote:

    If Mssrs. Buffett & Gates want to pay more taxes annually, they should, instead, persistently lobby Congress to utilize the billionaires' business acumen to begin taking a business approach to running the government as a business. Retaining the current tax rates, cutting spending, yet spending wisely, will result in increasing the GDP, thus continuing to lower the tax rate as a percentage of GDP, signifying an efficient economy. Once they've got the economy rolling again, the billionaires might consider taking the the money they believe they should pay in taxes and expand their considerable charitable activities.

  • Report this Comment On October 06, 2010, at 6:51 PM, lctycoon wrote:

    "In answer to the question "What's my incentive for working harder if the government is just take more of my money in taxes", is (insert drumroll):

    Because the more money you make, the more you get to keep."

    Spoken like someone on a salary. Those of us that have the ability to control our income won't work excessively hard for that extra $10,000 if the government is going to take most of it.

    "When the top few percent of the people in our country make more than 25% of the wealth, something is seriously wrong and it has even been argued by prominent economists that it is this very inequity that is one of the root causes of our financial woes."

    Aside from that being complete BS... the concentration of wealth makes no difference to the economy. If all those people were to leave the country, then the wealth disparity would be less, but nobody would be better off. According to the IRS, the top 1% earns ~18% of all income in the country (let's be generous and say 22% because they made a lot more this year than the other classes) but they pay more than 40% of all income taxes. The wealthy are already paying their fair share.

    I'm not opposed to the tax hikes, but I want to see them on everybody and to be certain that the government will use the money appropriately.

    "The max amount one can be eligible for is $356.00 per week. I'd say there are a heck of a lot of people who consider unemployment benefits to be paltry compared to what their earnings were prior to losing their jobs."

    That's too much. Cut the number down to less than minimum wage. I'm thinking no more than $200 per week. And no more than 3 months on it. There's plenty of jobs out there... I see help wanted signs on every store or restaurant that I go to.

  • Report this Comment On October 06, 2010, at 6:51 PM, Bonefish100 wrote:

    The idea of more taxes is nonsense. Take into account all the other state and local taxes, fees, etc., and we still work half the year for one government entity or another. Income taxes are only one form of tax...there are HUNDREDS of other taxes at various levels. Not to mention the "rulemakers" at all levels who sit in agencies around our land, choking our freedom. Remember all of this on November 2nd.

  • Report this Comment On October 06, 2010, at 6:52 PM, twobeerjohn wrote:

    It's time for Buffet to go.

  • Report this Comment On October 06, 2010, at 6:54 PM, libertarianlib wrote:

    I am not sure if I should roll over laughing or break down crying with pity for people like "richmacmf" who pine for the capitalist world of the late 1800's. If he'd just stop and think about it, the capitalism/socialism dichotomy is not now nor has it been for nearly a century an either/or proposition but a both/and implementation of the best of both to move civilization forward. "Forward into the past" does not work.

  • Report this Comment On October 06, 2010, at 6:55 PM, Mstinterestinman wrote:

    We raise taxes for the top 5% by 10% and cut government spending by 20% there the deficit goes away all we gotta do now is a hear a little griping cause someone doesnt get a new bently eh I'll be lucky to end up a millioniare when I retire doesnt bother me.

  • Report this Comment On October 06, 2010, at 6:56 PM, fatdiesel wrote:

    Would anyone care to comment on the effect of tax rates when it comes to the net present value of a company's projects and you can't borrow a bunch of money to lower your cost of capital?

  • Report this Comment On October 06, 2010, at 7:00 PM, Mstinterestinman wrote:

    Taxing the wealthy more is not socialism its called smart business we increase revenue and cut costs too bad the lobbyists will never let it happen.

  • Report this Comment On October 06, 2010, at 7:02 PM, TMFMMTInvestor wrote:

    Pretty much everyone commenting is off-base in some way because they fail to understand how our monetary system has actually operated from 1971 on, including the function of levying taxes, and how it still operates. Read this "MMT 101" overview first: http://pragcap.com/mmt-101

    This is especially true of the aforesaid quote from Warren Buffett that Morgan used to support his point: "If you get $100 billion more of taxes ... from people like me at the top, it means you borrow $100 billion less out of the economy. Somebody has to come up with that $100 billion ... you're taking the money from the economy either way. The only question is whether you take it by borrowing or by taxes."

    The gov't is not revenue-constrained (like the Eurozone countries, a US state, or a household), China is not our banker, and the US gov't does not need to "borrow money" or "take money out of the economy" in order to fund anything.

    While I am somewhat sympathetic to conservatives, Tea Partyers, and fiscal hawks when it comes to principles of political philosophy (the gov't is inefficient and does and requires lots of things that it shouldn't, or at least not at the levels it does), for the most part they are completely off-base on the economics of our monetary system. Of course, the same is true of moderates, liberals, progressives, communists, etc. What one thinks should be the case politically is not always the same as what's best for the country economically.

    Neither keeping the "Bush tax cuts" in place nor letting them expire for the "top 2%" will do much at all to fix our economic problems. On balance, keeping the current tax levels is better (in part because it would get us past this stupid debate and on to more important matters) but what would actually help are meaningful additional tax cuts (like a flat tax) for individuals and corporations COMBINED with targeted additional fiscal stimulus to increase production, and substantial debt restructuring.

    This is a balance sheet recession, and nothing is being done right now to address that. We need to increase savings and investment, ramp up production (Munger was partly right), and restructure debt to lower the debt overhang on households (who are still ~$100,000 underwater on average). Tax revenues to the government are not a priority right now--they will come with actual economic growth. Right now, we should be focused on not falling into a decade-long deflationary trap, which is the path we're on.

    Unfortunately, none of this is politically feasible, and Bernanke, Summers, Geithner are either ignorant or crooks. They have saved the banks and, yes, restored liquidity to the credit markets, but scr*wed the private sector after that. QE2 is a complete joke and will not induce aggregate demand.

    Buffett's a fabulous, shrewd, cunning, ingenious investor, but that doesn't mean that everything else he says should be taken as Gospel truth.

    Okay, rant over. ;-)

  • Report this Comment On October 06, 2010, at 7:04 PM, NeedaClue7 wrote:

    "First, let's evaluate why Mr Buffet and Mr Gates pay so little taxes."

    Two reasons I can think of:

    1. Social Security - For Mr Buffett, social security withholding is capped at around $4-5k per year, so if he makes, say, $10 million his effective tax rate is 0.05%, while a lower income individual with earnings below the cap has a 6.2% effective tax rate from social security. Unfortunately, Mr. Buffett obviously buys into the notion that social security withholding is a "tax", which is a tenent of the liberal philosophy.

    2. Dividends - Making an educated guess, I'm going to assume that a significant part of Mr. Buffett's income is in the form of dividends (obviously not from BRKA, but likely from other equity investments). Dividends are taxed at a lower 15% tax rate, but should not be taxed at all because they are simply distributions to the owners of a business of income that has already been taxed.

    So any of the likely reasons why Mr. Buffett says he doesn't pay enough taxes reflect a liberal philosophy, the "right" or "wrong" of which can be vigorously debated.

  • Report this Comment On October 06, 2010, at 7:08 PM, Mstinterestinman wrote:

    I can think of a lot of things to before raising taxes

    kill tarp

    kill the stimulus

    cut the budget back to 2008 levels

    cut farm subsidies, electric car subsidies, etc etc

    cut unemployment benefits back to a reasonable level

    open federal lands and offshore to resource development and collect royalties.

    Mr Buffet seems more and more to me like another crony capitalist. I would urge him to go ahead and write a 45 billion dollar check to the treasury if he believes so strongly.

    Yes because if you can't find work with high unemployment why shouldnt we give you less?

    Also even with those cuts we need more revenue to pay off debt and get rid of the deficit so wheres that coming from? I'm all ears if its not from a tax increase on the top earners ;)

  • Report this Comment On October 06, 2010, at 7:09 PM, ynor wrote:

    Here's a crazy thought: lets cut spending. there's almost 10% unemployment, another 7% have given up looking for work and even more people who are lucky enough to have stay employed but have gotten pay cuts. This is all while government employees and union members have been spared the vast majority of the devastation of this economy. In all fairness (cuz I know how Democrats love fairness), the government should respond in kind and cut it's expenses by reducing the pay and benefit packages of government employees (and enable the private sector to do the same to their unions). No one gets laid off, and the whole of society chips in.

  • Report this Comment On October 06, 2010, at 7:10 PM, Kiffit wrote:

    Buffet is sufficiently smart to realize that 'the tragedy of the commons' affects even the rich. No amount of private affluence can make up for wrecked public infrastructure and a dysfunctional society. Who wants to live in affluent prisons (gated communities) because the 'outside world' has become too dangerous for anyone who looks vaguely upmarket?

  • Report this Comment On October 06, 2010, at 7:10 PM, Mstinterestinman wrote:

    Also Above I agree that shareholders should not be taxed on dividends hey we all finally agree on something..lol

  • Report this Comment On October 06, 2010, at 7:12 PM, hvancura1 wrote:

    I hear over and over that taxes are a way to redistribute wealth from the rich to the poor when in fact it is the other way around. The wealthy do not create wealth they are simply good at finding ways to funnel money collected from the masses either by creating a market for their products or by feeding at the trough of the US treasury. I never met a capitalist that didn't like to milk a big fat government contract, only those that don't like to pay the taxes that feed them.

  • Report this Comment On October 06, 2010, at 7:13 PM, Mstinterestinman wrote:

    Buffet is sufficiently smart to realize that 'the tragedy of the commons' affects even the rich. No amount of private affluence can make up for wrecked public infrastructure and a dysfunctional society. Who wants to live in affluent prisons (gated communities) because the 'outside world' has become too dangerous for anyone who looks vaguely upmarket?

    Your right in a sense as much as I want to trim out wasteful spending our countries infastructure is a mess For almost 30 years we have been patching things that need to be replaced everywhere.

  • Report this Comment On October 06, 2010, at 7:14 PM, Kannon wrote:

    I think Buffet is saying that his share is disproportionate. Moreover that he has plenty of money - how much do you really need? The top % of this country make over a million a year and will not invest and create more jobs, they'll save/invest it. We live with other people, why do someof you tolerate such disparity and still claim to be Americans?

    Further have the gall to blame huge deficits on Obama when he inherited 2/3's of it and spent the rest to fix the fraud of CDO's? Anf further TARP is over and may well MAKE money for the treasury?!

  • Report this Comment On October 06, 2010, at 7:15 PM, enideckert wrote:

    Mr. Buffet is right. The wealthy will never be able to spend all the money they are accumulating, and many of them pay only 15% income tax because of the way their pay is structured. The obvious greed is nauseating. The envious, slightly less wealthy, are worried that they won't get to keep all the money they hope to earn. In the meantime I saved for part of my retirement by investing in collectables, and guess what-they were taxed at 28%. I certainly don't think that's fair.

    We should remember what happens to a democracy when the middle class shrivels up. Tell the Republicans to cut back spending. They started the spending spree.

  • Report this Comment On October 06, 2010, at 7:17 PM, stumarg wrote:

    I love when BILLIONAIRES lump themselves in with the top two percent. I make very good money but I live in NJ with the highest property taxes, car insurance, health insurance, etc....It's so easy for a billionaire to pay more taxes but the guy making 250-350k working his tail off to make a better life for his family working in a state with high expenses to start with hurts.We are people that are Lumped in the two percent category that can't afford more taxes.

  • Report this Comment On October 06, 2010, at 7:18 PM, lctycoon wrote:

    "Also even with those cuts we need more revenue to pay off debt and get rid of the deficit so wheres that coming from? I'm all ears if its not from a tax increase on the top earners ;)"

    $700 billion over ten years will make absolutely no difference. $3 trillion over ten years (raising taxes on everybody) might help, but not without spending cuts. I'm thinking major things:

    1. Means test on Social Security. You don't need it, you don't get it.

    2. Means test on Medicare. You don't need it, you don't get it.

    3. Remove all military bases outside the USA.

    4. Cut all Federal and State pension payouts and salaries by 20%.

    5. Increase eligibility age of Medicare and Social Security to 70.

  • Report this Comment On October 06, 2010, at 7:30 PM, NonnoDoug wrote:

    Even though, or maybe because, I own Berkshire

    I would like Mr. Buffett to stop trying to get government to tax me more. I am already taxed too highly, at all levels. If he wants to pay more, he can write a check to the US Treasury, a gift for his good fortune. in fact, he can pay my taxes, too. Thanks, Warren!

  • Report this Comment On October 06, 2010, at 7:38 PM, adrianunderwater wrote:

    The problem is not whether taxes are too low or too high. The problem is what is done with taxes.

    In addition to the US, among other places, I have lived in France (very high taxes) and I have lived in Singapore (very low taxes). But unsurprisingly, I have spent roughly the same amount for the same services in all countries. In France kids education, healthcare, to name just those are largely free, in Singapore I paid for those at market prices. Give or take a few percent, my household expenditure was equivalent as was my income.

    As a general rule, there are 3 uses for taxes; funding government's current expenditure, funding the country's capital expenditure, and wealth redistribution. And depending on where your ideas are, you will want to allocate different amounts to those different parts.

    And to come back to my first paragraph, the problem is nobody really knows where taxes go. How much of it goes into each of those 3 broad categories. So... obviously, no one will be happy! And everyone will want taxes to go up or down, and the government to reduce current expenditure, slash funding of projects or the cost of safety nets, or conversely increase infrastructure spending or help more in social programs... Such a muddle!

    So before increasing or decreasing taxes, maybe a clear financial statement from the government, that we all can understand, would be due, then maybe, taxes could be partitioned, for example, personal income taxes only for wealth redistribution, corporate taxes only for current expenditure and royalties from resources, eventual sales tax, etc for capital investment.. Deciding who pays what then becomes a lot simpler.

    In other words, make the tax situation clear, transparent and accountable. But most important easy to understand!

  • Report this Comment On October 06, 2010, at 7:59 PM, xetn wrote:

    Buffet is an idiot. If he thinks his taxes should be higher, he can just pay higher taxes. We don't need a raise in tax rates when the economy is floundering.

    His argument "If you get $100 billion more of taxes ... from people like me at the top, it means you borrow $100 billion less out of the economy. Somebody has to come up with that $100 billion ... you're taking the money from the economy either way." is plain stupid. What we need is for government to spend much less and tax much less. It is the spending that is wrong!

    Do not ever forget that all taxes are a theft from the productive and a transfer to the non-productive. SOCIALISM!

    No wonder businesses are not expanding in many areas and unemployment is stuck at high rates. Nobody can determine what the idiots in Washington will do next. And with idiots like Buffet, you can kiss you wealth goodbye. It is too bad he did not inherit his father's libertarian ideals.

  • Report this Comment On October 06, 2010, at 8:06 PM, dogbot wrote:

    The key point in all of this is that the rallying cry has been that lower taxes equal higher employment. Unfortunately this is not true or we would be around 1-2% unemployment right now.

    My second point is that people say that higher tax rates will kill incentive. Silicon Valley was started with marginal tax rates of 70% maybe they forgot that they have no incentive. If I could figure out how to make a million or two I'm going to do it if the tax rate is 28% or 32%.

    Finally I find it interesting that no one mentioned the wars we are engaged in and the drag on the economy they present. According to Bush and his accounting tricks these were free but ask any Soviet what happens when you pump your treasures into Afghanistan. They must love Charlie Wilsons war for the irony.

  • Report this Comment On October 06, 2010, at 8:10 PM, TMFHousel wrote:

    Lots of great comments in here. Thanks for the debate, everyone.

  • Report this Comment On October 06, 2010, at 8:15 PM, KBOKSOFT wrote:

    My comment, "...the more money you make, the more you get to keep" may be "[s]poken like someone on a salary", but it was spoken BY someone who IS a small business owner.

    I don't even pay myself a regular salary. Month by month, by taxable income is equivalent to my corporation's profits.

    I started working for myself when I was 14. Since then, I've stopped working out of exhaustion, out of principle, and just because I decided other things are more important. But I've never stopped working (or cut back) because of tax brackets.

    I've also never known any other entrepreneur who would give up and go home out of despair, disillusionment, or spite about the government taking its cut. That would be a pretty lame reason to give up.

    Now, that doesn't mean we (small business owners) don't whine about paying taxes; it doesn't mean we wish we paid less in taxes; and it doesn't mean we won't occasionally make empty threats about what we would do (or not do) if the government raises our taxes. Whining about taxes is just as American as telling everyone who will listen that this is the greatest country on earth.

    The truth is: I am "Bob the Plumber", and I'll work hard to make more money next year than this year, and more money the year after that, and so on. I'll pay more and more and more taxes, and that's OK. Bring it on. I'll still reinvest in my business; I'll still work smarter; I'll still compete better; I'll eat the lunch of anyone who gives up in the face of increased taxes -- or anything else for that matter.

    You don't want to work harder because you have to pay a higher tax rate? Cool. Give me your customers' phone numbers. I'll pick up your slack.

  • Report this Comment On October 06, 2010, at 8:20 PM, TMFHousel wrote:

    "You don't want to work harder because you have to pay a higher tax rate? Cool. Give me your customers' phone numbers. I'll pick up your slack."

    Brilliant comment!

  • Report this Comment On October 06, 2010, at 8:28 PM, sfojoe wrote:

    I'll tell you what, Warren: If you feel so undertaxed I suggest you and your buddy Bill Gates just write whopping checks to the government until you feel good about the amount you are paying. Your position is an easy one to support when you have accumulated wealth beyond the reach of almost everyone else. No matter how much tax rates rise, we will continue to run deficits because politicians are programmed to buy votes using other people's money. I believe in starving government at every level by freezing all taxes at current rates and forcing them to make the tough decisions, just like the rest of us and our families. I'm really fed up with rich peopel telling me what I should do with my money--the operative words are "my money'--It's mine, I earned it, it does not belong to the government.

  • Report this Comment On October 06, 2010, at 8:36 PM, sankarm wrote:

    I have a very simple request. All the people who want to cut spending can you come up with a list of cuts that you would make and get it passed through the congress and senate?

  • Report this Comment On October 06, 2010, at 8:38 PM, tdiaczok wrote:

    Lots of interesting discussion of tax increases vs spending cuts but until this discussion looks at the SCOPE of the US budget deficit and future deficits and what will need to be done to manage the sheer enormity of the gap this discussion is just re arranging deckchairs on the Titanic. Morgan can you do an article on the scope of the problem and offer some possible solution scenarios ? I think if this is done there will be absolute horror at the near impossibility of the budget problem and how the only way out will be to inflate away the debt.

  • Report this Comment On October 06, 2010, at 8:50 PM, Thaeger wrote:

    -It's not just about wealth redistribution, but also about altering people's behaviors. For instance, significantly raising taxes on dividends, etc, encourages companies to reinvest their profit into infrastructure and growth, rather than simply try to wring every last drop of profit out of their companies.

    -Trade velocity. The economy is better--that is, there's a bigger pie for everyone to have a piece of--if the taxes favor distributing money to people who'll actually spend it and keep the economy moving, vice just accumulating the bulk of the nation's wealth in a handful of massive overseas accounts, or injecting it into the stock market and driving prices up without a corresponding increase in actual value, which of course causes a large crash when people realize that prices are grossly inflated.

    To add to that, our nation's economy was stronger in the 40s, 50s, and 60s than in any time before or since. What were the taxes around then? They were in the 90% + range. It wasn't until Reagan dropped the marginal tax rate down to 50% that we started having the boom/bust cycles again.

    ----

    tl;dr the issue is more complicated than "taking from the rich to give to the poor." We're talking about the economy, not individuals, and everyone benefits from a strong economy, just as everyone suffers from a weak one.

    http://the-wawg-blog.org/wp-content/uploads/2009/10/tax_rate...

  • Report this Comment On October 06, 2010, at 9:19 PM, Howard1ii wrote:

    What bothers me most about the entire discussion is the mindset of "let's get the rich guy." This is class warfare pure and simple and Obama is the cheerleader.

  • Report this Comment On October 06, 2010, at 9:23 PM, hearshey wrote:

    As usual, Mr. Buffett is just being practical. He knows the government will get its share of his wealth eventually, either alive via income tax or after he dies via the estate tax. I wonder whether he's structuring all the donations he's planning to make to get the maximum tax benefit.

  • Report this Comment On October 06, 2010, at 9:35 PM, Chgallos wrote:

    I googled the budget: http://www.yorkgrassroots.org/0images/2008pie_budget.gif

    I see at least one big target for spending cuts.

  • Report this Comment On October 06, 2010, at 9:43 PM, bbell46356 wrote:

    Mr Buffett can beg for higher taxes on the rich because he won't pay them no matter how high the rate goes.

    His statement that he pays less than anyone in his office is proof enough.

    Super rich who claim to be for the poor people are hypocrites and liars.

    They can lobby for loopholes and accountants and lawyers that regular people can't afford.

    The current tax code is welfare for accountants and lawyers.

    The actual poor people don't pay income taxes - they get an earned income tax credit. The real middle class will bear the brunt of any tax rate increase and we know it.

    Thanks Mr Buffett, but I don't need you telling me how much tax I should pay.

  • Report this Comment On October 06, 2010, at 9:48 PM, pepin03 wrote:

    Until I can trust my Gov. why would I pay more taxes. I do believe Buffet is right but there must be strings attached to raising our taxes.

    We must have a balanced budget. ( no more printing)

    Must cut spending by 35% in 4 years. This sounds like a lot but we are winding down a couple of wars.

  • Report this Comment On October 06, 2010, at 9:53 PM, NoOracleHere wrote:

    The key to a healthy economy is flow. We have to get the economy flowing again - that's money and productivity. This idea that we're healthy when we're holding onto what we have is exactly what's wrong with the economy and why the stimulus has stalled. Instead of bailing out the jobless and struggling, we bailed out the banks. The banks have returned the favor by holding on and not loaning the money out, continuing to foreclose mortgages, and frankly being a pain in the backside. Ultimately, taxes need to increase. That's plain when you look at the deficits. Bush cut taxes when a cut wasn't needed. I think it's a matter of timing. If the economy was flowing, you wouldn't hear so much of the resistance you hear today. But now when the money isn't flowing, and deflation is the overriding fear, perhaps the increase is not needed. Wait about 9 months when inflation becomes the problem, and interest rates are climbing, and then the debt will become especially burdensome. Then the preferred way to fund the government - taxes, not debt - will not be quite as objectionable. I come from a background that stressed the importance of "paying your bills". The government of the people - that's us - needs to pay its bills. I prefer taxation over money printing that we've forced ourselves to accept.

  • Report this Comment On October 06, 2010, at 9:59 PM, lennysims wrote:

    I just read through a bunch of these and it seems to me that 90% of you must be in the top 2%--WOW, way to go fools. My guess is that maybe 1% of you are--just doing some quick math in my head and that seems pretty reasonable. So not sure why so many of you actually have something so silly to say.

  • Report this Comment On October 06, 2010, at 10:12 PM, jdmcccullough wrote:

    Well of course Warren would say that since he made billions off of the Gov anyway! I think if he's has an interest in paying the gov, then he should do so. As for the rest of us, I say lets tell the Gov to reign in spending, get rid of subsidies, especially to foreign entities, drop some branches of gov whose programs no longer benefit those they were created to benefit? and lets find some representatives who have some creative ideas and don't want to make a career out of politics!

  • Report this Comment On October 06, 2010, at 10:14 PM, radman99 wrote:

    Keeping taxes at the current low level will only lead to an increase in the Federal Debt and the associated unsustainable increase in interest payments on the debt. For those people who would like to cut federal government spending, including those in the Tea Party I would like to know exactly what they plan on cutting. Most of federal spending goes for defense, social security, medicare and the interest on the federal debt.

  • Report this Comment On October 06, 2010, at 10:29 PM, Edfinn1 wrote:

    Taxes are historically low. The deficit is historically high. This isn't rocket science. I would see higher taxes if the "Bush Tax cuts" on those earning above $250,000 are allowed to expire, but it wont make me stop working. The idea that entrepreneurs will lose their incetive to work if the marginal tax rate goes back to 39% from 36% seems just ludicrous. Most of the 20th century saw marginal tax rates higher than that, without massive retirements of the wealthy. This country has been good to those of us able enough and supported enough to make good money. I, for one, appreciate the military, the national parks, the police, schools, roads, environmental protections, safe food and drugs, antitrust enforcement, and even <gasp> welfare, unemployment compensation, and, medical care for the indigent. We would all have a much more difficult time making our six figure salaries or profits or keeping the good things we buy with them without a government that provides a support to us, if only to provide food stamps to the hungry so they dont steal our big screen tv's. There simply isnt enough spending to cut to deal with the deficit. If we pay for the military, entitlements and interest on existing debt, taxes will need to be raised. I stand proudly with Warren Buffet to help the country by paying my share. How is it that the most fortunate of us feel an entitlement to not pay for the very systems and support that allow us to thrive. A culture of entitlement seems to infest the top brackets more than the lower ones. I am lucky enough to make good money and thankful enough to this country to be proud to pay my share. 39% in marginal income taxes is a small price to pay for the benefits we all share. The "greatest generation" saw paying their share and buying bonds to boot as their patriotic duty, It is sad our patriotic duty under the "Bush Tax Cuts" became going to the mall and spending on chinese imports so China could buy our paper. What has become of responsibility, paying our own way and sacrifice for the common good. I stand with Buffet and Gates, ready to pay my share and support the nation.

  • Report this Comment On October 06, 2010, at 10:33 PM, bluemoth wrote:

    @Edfinn1

    Thank you. Well said.

  • Report this Comment On October 06, 2010, at 11:29 PM, billmichael wrote:

    We should cut spending before we even think about taxes and then, after deciding what to do about taxes, we should cut spending again. I mean deep cuts, like no more cadillac retirement plans for government workers.

  • Report this Comment On October 06, 2010, at 11:33 PM, rhpowell4 wrote:

    My wife and I have both done very well in our 15+ year careers in IT, and we fall into the top 2% of earners, and will most definitely be significantly impacted by the additional taxes on the horizon. We pay a lot of tax, and fairly recently I felt like it was a crime that my tax rate was over 50% in many cases when you take into account all the taxes we pay: real estate, sales, federal, state, local, Social Security, Medicare, etc. . But, then I saw a news report about strife in an African country where rebels were kidnapping, rapping, and turning women into sex slaves, and then another about an Asia Pacific country where mobs were roaming the streets chopping people up with machettes. Those people don't pay any taxes in many cases. After thinking about it some, I have decided that, as horribly as I feel my tax money is being spent, we have at least been able to provide a secure environment where I do not yet worry about mobs breaking into my house to chop me up and kidnap my wife and daughters to become sex slaves. If my taxes provide me that assurance, they are well worth it, and I am prepared to suck up the pain and pay more. Of course, more fiscal responsibility and accountability would be wonderful, but at least we have suceeded better than most in providing relative national security so far.

  • Report this Comment On October 06, 2010, at 11:52 PM, Acorn17 wrote:

    I completely agree with WB. It is insane and in my view immoral for the wealthiest to pay lower tax rates than those who are lower middle class. (The poorest are exempt anyway). This could easily be remedied and upping the cap gains and dividends tax is a good way to do it along with the income tax. Of course doing it in a graduated way would be really helpful to not disincentivize the mid class folks from investing in stocks and taking dividends.

    As long as we have a situation where those most in the position to influence the political system (ie those with the most money) are not having to effectively directly pay for decisions made -- to almost everyone the national debt is just funny money which while having real consequences isn't usually directly felt -- there will be no incentive to reign in spending or change policy. The poor feel the effects of bad economic policy much more as they are those who are in the worst shape with a job loss.

    Raising taxes to rates that are a fraction of what was being levied in the first half of the 20th century would create a more painful incentive to change the way we do things (we'd feel like we actually have to pay for it and the reality is that we NEED to pay for decisions made by the government). We cannot continue on this road forever without major consequences.

  • Report this Comment On October 07, 2010, at 12:02 AM, 1996cc wrote:

    The problem isn't lack of tax revenue, it is overspending and excess government! You don't buy everything you want and then tell your boss what your paycheck should be, you get your paycheck, then spend less than whatever it is.

  • Report this Comment On October 07, 2010, at 12:22 AM, BearCity wrote:

    Why is it that so many think it's the end of the world if a guy who makes $300k has to pay an extra $3k in taxes (that's 1%), and because of that $3k won't be able to "buy a new truck and hire another plumber" (I'd like to know where he buys his trucks), while at the same time you call for cutting wages and pensions on "overpaid government and union workers", who mostly make about $50-75k? Please explain why $3k is so much more important to that guy than me. I'd like a new truck and plumber, too, now that I know they're so cheap....

  • Report this Comment On October 07, 2010, at 12:42 AM, zymok wrote:

    Morgan,

    You were right. Few facts. Much shouting.

  • Report this Comment On October 07, 2010, at 12:45 AM, grh76 wrote:

    Two thoughts from someone in the top tax bracket: 1) After reaching some level of income in the several to tens of millions, it becomes difficult to spend more for consumption (as opposed to investing), so the idea that raising taxes at the top hurts the economy by reducing economic activity begins to lose traction. Investing in job creation as a business expense should still be tax deductible, and how many Lear jets and mansions does one really need? 2) Marginal tax rates have been as high as 90% - certainaly a disincentive to work harder and longer hours. But when one considers " Life, liberty, and the pursuit of happiness" , one could argue that after some point, a disincentive to work less might yield a little more happiness. I am on Buffett's side with this one - tax me.

  • Report this Comment On October 07, 2010, at 1:14 AM, mtracy9 wrote:

    Republicans are always saying that we need to cut spending before raising taxes. They always seem to forget that someone is going to have to pay for the trillion dollar wars that Bush started.

  • Report this Comment On October 07, 2010, at 1:15 AM, mtracy9 wrote:

    The American economy never did so well as it did after

    President Clinton raised the top marginal income tax rate

    for those making more that $250,000/yr. from 33% to

    39%. It even produced record budget surpluses.

  • Report this Comment On October 07, 2010, at 1:55 AM, Kakabeka wrote:

    Bunch of right wing typically misinformed repigs

    in this thread. Obviously Faux News illiterate hillbillies...

    Extending tax cuts for the top 2% would be criminal.

    /They OBVIOUSLY never read the article

    p.s. 2 Millionaires ARE NOT being taxed fairly.

  • Report this Comment On October 07, 2010, at 1:59 AM, kiynien wrote:

    I am curious how much those that call for higher taxes donated to the Treasury last year making up the difference between what was required to pay and what those individuals think is fair. By the lack of a press release/news conference announcing such guessing that amount was $0.00.

  • Report this Comment On October 07, 2010, at 2:37 AM, GetMeTheBigKnife wrote:

    I appreciate what this country has provided for me - the opportunity to be prosperous and live a happy life . . . that is my attitude, and I am happy to pay my taxes.

    I have given up ranting and complaining about taxes - it drained the life and joy out of my financial success. Give it up and enjoy your life!

  • Report this Comment On October 07, 2010, at 2:54 AM, bdrex wrote:

    Really, to about 99% of you? Really? Not one of you is a billionaire. Not one of you is even a millionaire. Your understanding of the global economy will NEVER reach even a fraction of what Warren Buffet has achieved. One of the most ignorant postings, “I would do better by earning less and taking what the government gives out “. Really? You’d be better off with less than $40,000 per year on a “government” plan than a millionaire taxed at 75% would be with $250,000? My public school, tax dollar funded education tells me $250,000 is much, much better than $40,000. I would be VERY, VERY happy with $250,000 – AFTER TAXES. Wake up or stay asleep, your choice. But if you insist on remaining dormant (that means sleeping), then stop voting. Stay out of politics. Stay out of giving advice. Do what you think is best. Just stop trying to infect others with your stupidity. As if I would trust what any of you think about the economy over what Warren Buffett’s opinion is. And for those of you who fall prey to these misguided people, pity on you. You will be the reason your net worth evaporates every 10-20 years. But not the millionaire’s. In fact, more of them become billionaires each new cycle, at the same time your net worth is practically erased.

  • Report this Comment On October 07, 2010, at 3:18 AM, exdividendday wrote:

    Here is Warren Buffett's latest statement on CNBC as of September 23, 2010.

    http://long-term-investments.blogspot.com/2010/09/warren-buf...

  • Report this Comment On October 07, 2010, at 6:39 AM, devoish wrote:

    Morgan, that taxes need to be returned to pre-Reagan levels has been obvious to anyone who looks. Thanks for getting a few more to look.

  • Report this Comment On October 07, 2010, at 7:33 AM, afamiii wrote:

    Why doesn't he leave his fortune to the treasury rather than the Bill Gates Foundation.

    The problem with taxing the rich (more than you tax everyone else) is that it incentivises the lazy (oops I apologise I mean't to say less financialy productive) and the looters (I make no apology I mean't to say politicians,) to take money from those who know how to make it and spend it on themselves and other people who don't make it. Creating over time a culture where it is more rewarding to loot and be lazy than it is to strive, to think and to work.

    This is the difference between China pre 1977 and China today, or between old America and old Europe, or between most of Africa and much of Asia.

    It is the road to ruin, missery and ultimately social anarchy.

  • Report this Comment On October 07, 2010, at 7:54 AM, jfrankh57 wrote:

    You start with a premise that the government is entitled to tax and spend as much as it likes. Let's have a rationaledebate over th issue. Taxes SHOULD be minimally invasive to start with. People SHOULD be able to enjoy the fruits of their labor. Yet, in times of emergency, the power to raise money for the common good should not be denied to the government. HOWEVER, the folks who RULE need to be reined in as well. When you take money from somebody who works hard for it, give it to some poor Joe who "dropped out of school because it was boring, life needed to be smoked or drank away, or TV/Play Station/computer was too exhausting and who needed to go to school anyway" type person, well, you have to winder. When a government will give money away as a goodwill gesture in hopes that other peoples will like you??? I think this government has gone too far for too long and needs to be reined in.

    How about this for an experiment: The only time I see there might need to be a confiscatory government is at the end of life when estates are handed down from one generation to another. If a wealthy person distributes his/her own wealth to others then leave them alone. Cap the amount, reasonably, to heirs. At today's level of income/wealth, anybody who inherits $10Million would conceivably be rich for life. Start at a reasonable amount such as this and index it to inflation. When the remainder is taxed at a high rate, other will be inclined to use the great bulk of their wealth before they die to further their pet causes. Wealth can't be concentrated beyond a single generation, each generation has a chance to achieve financial prosperity. MOST importantly, don't tax this way and keep the resultant money in the economy...destroy it and the remainder will be the stronger.

  • Report this Comment On October 07, 2010, at 8:27 AM, duficity wrote:

    IMHO the problem is not that the tax rate is too high or too low, its that not enough people are paying their fair share of taxes at all. Too many of our "small businesses" expense so much from their income that they end up with little or no profit from which to pay taxes. Paying for your car, fuel, mortgage, food, clothes, utilities and other personal expenses are not proper business expenses and are not deductable. The average wage earner doesnt get those deductions and pays his full tax bill. Between those small businesses and people working under the table, we lose incredible amounts of tax revenue.

    Don't kid yourself, there is a huge underground economy out there that is off the books and not paying taxes. Grab those guys and watch the deficits go away.

  • Report this Comment On October 07, 2010, at 10:28 AM, money4eds wrote:

    Taxes should go to programs defined in our constitution. All entitlement programs need to go. This is America and you need to have personal accountability.

    A person can spend more wisely than government.

  • Report this Comment On October 07, 2010, at 10:40 AM, jabez1 wrote:

    Too bad Buffett doesn't apply the same logic to running a country as he does to running a company.

  • Report this Comment On October 07, 2010, at 10:52 AM, Teaweed wrote:

    Write a check Mr. Buffet. The IRS does not limit your contribution, they only tell you the minimum.

  • Report this Comment On October 07, 2010, at 11:25 AM, ndsufool wrote:

    There is a lot that ought to be fixed but congress keeps passing the buck because of screamers on the left or right. Does anyone like their tax dollars going to a welfare recipient that spends 10% of her food stamps on Doritos, Snickers and Pepsi? But if you own stock in Pepsi, then you'd be loathe for the earnings hit if the USDA cuts sugar snacks from food stamp program. Congress has known for years that Social Security is unsustainable, but the left won't cut benefits, and the right won't raise taxes. If we want energy security, drill baby drill, but raise the gas tax since the highway trust fund is no longer sustainable, and driving a Hummer is plain stupid. Phase out the interest and real estate tax deduction on housing. Close the internet sales tax loophole.

    Buffett would be an idiot to donate money to the Government. But it is not idiotic to advocate for a change in current policy. If you are going to be truly reasonable, you will recognize there is a lot congress could cut and reform on the spending side, but that taxes ought to go back up too. I'm one of those who currently pay no income taxes and am lower-middle, but I've seen the tax return of a family of four earning over $100,000, owning over $1M in investment property (some of that he was still paying debt service on) and not only paying no tax, but getting refundable credits. Nice guy. Hard worker. But that tells me the tax code needs to be reformed, rates raised, loopholes closed, whatever so there is common sense and he pays his fair share just as I do (the year I reviewed his info, I was single and paying income tax, so it really burned my britches).

    So if you want to lower rates, lower them, but close loopholes and end ridiculous policies like encouraging home ownership. That will just lead to a collapse in housing some day....

  • Report this Comment On October 07, 2010, at 11:28 AM, johnwitt59 wrote:

    I dont believe for a second that WB can "have the lowest tax rate in my office" even with payroll The numbers and rates make that impossible. Also why do people think that people earning over 250,000 are rich? If you want to riase taxes on these mutli million or billiionaires then put a top rate on income over 2Million and then they can go after the really rich! I dont agree with it at all and would believe a flat tax is the best and fairest but dont lump in successful people making 250,000 a year with 2 incomes as rich

  • Report this Comment On October 07, 2010, at 11:31 AM, TMFHousel wrote:

    "I dont believe for a second that WB can 'have the lowest tax rate in my office' even with payroll The numbers and rates make that impossible."

    Care to elaborate?

  • Report this Comment On October 07, 2010, at 11:36 AM, Sonofleopold wrote:

    “Giving money and power to government is like giving whiskey and car keys to a teenage boy.” (P. J. O’Rourke)

  • Report this Comment On October 07, 2010, at 11:40 AM, breaktrack wrote:

    Ya know, I own BRK and admire Buffet but I think he is foolish in wanting to give his money to the government. Why not try cutting spending Warren and stop all the freebies to the non producers?

  • Report this Comment On October 07, 2010, at 11:51 AM, ndsufool wrote:

    Also, for those who advocate cutting spending to bare bones and that government should be starved...keep in mind a lot of state/local government goes towards basic services and infrastructure like roads, police, and schools. Let the have-nots work themselves up the ladder. But ask yourself how many have-nots children have loser parents? Without governmental funding of basic services, the true poor have almost zero chance, and little incentive, of making something of themselves. True that the incentive is there, but they can't see it because they don't know any different. So some live off welfare, some drug themselves through life, some rob and steal to support whatever lifestyle they have. Your taxes fund your lifeSTYLE. Which includes the lives of others your taxes help support.

  • Report this Comment On October 07, 2010, at 11:56 AM, mdk0611 wrote:

    1. I wish Buffett would stop using that deceptive tax analogy that includes FICA taxes. FICA taxes (except Medicaid) are capped in the same way Social Security benefits are capped. Buffett isn't going to be getting any Social Security based on his capital gains.

    2. Buffett has also been quoted that the economy would be hurt if cap gains and dividend taxes were raised too high. He considered a 20% cap gains tax to be acceptable, but worried about anything 285 or above. Currently the divident rate is headed to 39.6% and eventually 43.4%. So why isn't the risk that Buffett points being discussed?

    3. I wish people making 200/250k would stop being equated with billionaires. Just because Buffett and Bill Gates would barely notice this tax increase doesn't mean someone with .01% of their net worth wouldn't.

  • Report this Comment On October 07, 2010, at 12:15 PM, brizzlekizzle wrote:

    Why is this an issue? As long as we have greater fundamental problems, the tax rate here is a number totally separate from a real tax rate.

  • Report this Comment On October 07, 2010, at 12:47 PM, bobthebear wrote:

    You folks are generally the most selfish, inconsiderate and thoughtless persons on the face of the earth. How can you be so narrow minded about a government that has protected you and the Constitution for all these hundreds of years. Pay your share and be glad that you have a job that pays enough so that you must pay some tax. The effective tax rate in 2007, a good year, was about 17.5% for the top 5% of earners. Is it too much to ask for a little bigger contribution from them? Give me a break.

    www.theoldphilosopher.com

  • Report this Comment On October 07, 2010, at 1:07 PM, ejazz2095 wrote:

    Tax cuts don't cost money, government programs do! Oh, and Buffett is retarded.

  • Report this Comment On October 07, 2010, at 1:11 PM, hardy wrote:

    1. Taking money from those who have earned and giving to those who have not is, in the long term, destructive to society. Make the half who are paying no taxes today pay at least pay a token 5-10%. This will help get them on the side of smaller, more restrained government.

    2. Strongly agree with the above comment about someone earning $250k being equated to Buffet/Gates. The definition of rich should be "has more liquid capital than 25x their spending so they don't have to work if they don't want to". So make the higher tax bracket apply to 25x the median family income, which would be $50k x 25 = $1.25M.

    3. Quit growing the government. It's too big. Restrict the federal government size to 15% of GDP. At that point, I barely care how they get their money, it's too small to matter all that much. According to the graph above, that just means "live within your means" at today's tax rates.

  • Report this Comment On October 07, 2010, at 1:16 PM, jabez1 wrote:

    We, the ones you refer to as selfish and inconsiderate, are just the type of people who founded this government and are part of the government that you refer to as though it was some seperate entity that pre-existed and graciously brought us in under its all powerful, benevolent wings to save us from ourselves.

    And yes it is too much to ask big earners to pay more for the privilege of living in this country than you or anybody else does.

  • Report this Comment On October 07, 2010, at 1:32 PM, CPACAPitalist wrote:

    I find it interesting on how many people are missing the fact that it is Bill Gates Senior who is discussed in this article, not Bill Gates of Microsoft fame. Not that Bill Gates Jr. feels any differently, I don't know, but the fact that so many people missed that is driving me bonkers - lol.

  • Report this Comment On October 07, 2010, at 1:36 PM, JerryMandering wrote:

    Housel wants Washington to have even MORE money? What for, Housel?....what good has it done? Have we won the War on Poverty yet?...huh? Has SS and the like been managed right? What about those REALLY responsible for the housing crisis? Are you blind as to how these people have handled our tax money year after year. Kooky, is all I can say. I'm beginning to wonder about this fool.com thing....kinda turning into Salon or Huffington Post

  • Report this Comment On October 07, 2010, at 1:37 PM, Hendo44 wrote:

    It would be interesting to see how Mr. Buffet and Mr. Gates would react if the people running their companies were as incompetent and inefficient as our federal government. My bet is they would all be fired and new management would be hired.

  • Report this Comment On October 07, 2010, at 1:48 PM, dancinglight wrote:

    Eliminate over time the entitlement programs, stop the off-the-books spending, adopt pay-as-you-go and the tax issues will dissolve for all of us. The Feds never ever balance their budget. Most of Congress and all of the White House occupants are economically ignorant and have little common sense. Until we demand better leadership and vote for it, we will have to endure the tax burden of whatever unthinking idiots are in office.

  • Report this Comment On October 07, 2010, at 3:01 PM, carjjc wrote:

    I appreciate the post and I like Warren's comments and his stile. My opinion is that an increase in tax rate for the highest incomes is a plus to the economy. But I dont know this. The other point is others dont know that they make more money when taxes or tax rates are lowered.

    I also think there are things our country could have spent less on.

    The Bush tax cuts.

    For sure the estate tax elimination should go away.

    The Iran and Afg... wars

    I think if we want to have a smaller debt we need to make choices to spend less.

    The TARP was needed as has only cost $300B to date and is likely to only cons $30 to save you and my lifestyle. This did not save the rich it saved us.

  • Report this Comment On October 07, 2010, at 4:04 PM, bobert1963 wrote:

    I know this is an investment site so I'm sure there are a few more "top 5%" wage earners here than the average yahoo finance article but there seems to be alot of people here crying about the mere mention of taxes being raised that wouldn't be affected in the least and would probably benefit. I barely make the top 30% so I know I wouldn't be affected. Why is it that when it comes to politics people routinely vote against their own interest?

  • Report this Comment On October 07, 2010, at 4:42 PM, 32susan wrote:

    to late

    obamba? a one term president

  • Report this Comment On October 07, 2010, at 5:10 PM, mdrwolfe wrote:

    For the umpteenth time WB has thrown us a curve ball regarding taxes. The worlds greatest long term investor has for many years now set up his own financial picture so he accrues, both on a relative and absolute basis, very little ordinary income, and therfore pays very little ordinary income taxes at the (higher) marginal income tax rates that he favors increasing. WB has almost all his income from dividends, capital gains and even then, these sums are imbedded in complex trusts and foundations that minimize the taxation.

    Who is he to tell us what we should be willing to pay, when for the past 40 or 50 years, he has not paid his 'fair share'.

  • Report this Comment On October 07, 2010, at 6:03 PM, MisterRogers wrote:

    What would happen if instead of raising taxes, we simply allowed the U.S. government to default on their loans? They would not be the first country to do so. The deficit would be erased overnight. The credit rating of the U.S. government would be ruined, which would largely prevent them from borrowing more in the future. China would be upset, but we could work out a diplomatic solution before they launched a military invasion.

    I just don't see why the American taxpayer has to bail out a reckless government that does little to serve the people. I am willing to pay taxes up to a point. I even moved from a state with low taxes to a state (and city) with extremely high taxes because dollar for dollar, the services were way better. However, I have worked on Federally funded projects, and I have seen the waste and corruption firsthand. You just can't imagine how bad it is. I live a life of responsibility and frugality. Should I expect less from my government?

    I support helping the poor, sick, elderly, and disabled, but most government welfare keeps people trapped in poverty rather than helping them escape it, and the cost of the welfare bureaucracy diminishes the money that actually reaches the people who need it.

    Admittedly, a couple percent increase in the upper brackets will not affect most of us directly, but the principle bothers me. We should have a simple tax code, not the complex monster that we have today, which arbitrarily incentivizes certain behaviors. Furthermore, I am deeply troubled by the government deciding who is "rich" by setting arbitrary brackets. As one commenter noted, making $250k in a state like NJ does not make you rich at all. We know the government is going to devalue the dollar to pay for its mess. Why raise taxes at the same time?

  • Report this Comment On October 07, 2010, at 7:13 PM, AnthemFool wrote:

    I think Buffet and the article make some excellent points, but what this country really needs is a "grand compromise" between the two parties on spending and taxes. Rationalize the size of the federal government, i.e. eliminate a lot of unnecessary spending, and increase revenues by raising taxes on the upper income brackets. A lot of detailed work will have to go into that compromise, but if we the voters can make it clear that we want both parties to commit to working out the details, then the country will be put on new path to prosperity. Unless both parties understand that the voters won't tolerate this constant bickering, it will never happen.

  • Report this Comment On October 07, 2010, at 7:34 PM, nin4086 wrote:

    @dbman5

    That would be an awesome positive cycle: more tax --> more growth -> even more tax --> cycle continues

    It will benefit everyone not just the wealthy.

  • Report this Comment On October 07, 2010, at 11:51 PM, doramek wrote:

    What spending do we want to cut?

    Interest on the debt? Can't be assured of doing that without reducing debt or making interest rate rises illegal.

    Social security for an aging population? I want mine do you want to have yours cut?

    Medicare for an aging population? I want mine do you want to have yours cut?

    Defense? How we gonna be safe without keeping the wars off our shores? Reinstate the draft?

    Close the parks? Quit inspecting food products? All drugs to be legal? We could disband FDA!

    No more road building or improvement? Ooops to late we already did that. Cut the Weather Service? Who need to know about hurricanes, floods and tornados?

    Maybe the 1950s' 90+ % tax rates could take care or our problems.

    Don't tax me, just tax you! Write a special bill for each of us, especially doraki, that by donating to the Congress people of your choice.

    We've got the best Goverment money can buy already!

    XOXOX

  • Report this Comment On October 08, 2010, at 11:43 AM, warrenzevon wrote:

    I don't know why admitting that taxes are a wealth transfer ends all debate...there's nothing wrong with admitting that 1) the wealthy and children of have many advantages (having to do with access, not money) over middle/low income Americans 2) we are a better society overall by evening the playing field so that those less capable/advantaged/lucky can enjoy at least a decent existence 3) the wealthy are not harmed appreciably by having to pay some more taxes...to say nothing of the fact that the pay ratio of c-levels to rank and file has expanded from 30:1 to about 300:1, so that average Americans are not even enjoying the fruits of their labor during good times (let alone bad when you still have executives drawing huge salaries).

    To deny that there are inequities of opportunity between rich and poor is to be disingenuous or heartless. Less affluent Americans have poorer quality and less access to education, healthcare, housing, and other necessities for reasons that have nothing to do with personal drive, especially in the case of children. Saying that we shouldn't redistribute some wealth from those with 2 houses and 4 cars to those with none because it smacks of socialism is a weak argument. Not only is evening the playing field the decent thing to do, it ends up raising society as a whole and enriching everyone...without the contributions of non-affluent Americans to the larger society, we would miss out on a lot economically and culturally. America cannot be the country it wants to be as a polarized society, which is precisely what it is becoming.

  • Report this Comment On October 08, 2010, at 12:21 PM, namkrad wrote:

    Anyone who says that supply side economics failed because the government didn't take in more revenue is completely missing the point. The purpose is to stimulate economic growth, not tax revenue. A quick study of the last 35 years suggests that this holds true. The problem is that the government doesn't look at Income and cut Expenses to match as they should. You can't have all the programs working from debt and sustain growth, something has to give. Congress (both parties) have a spending problem. I believe the reason people are so frustrated currently is that everyone's pocketbook is tight and the debt has grown faster than ever in the last 2 years. While most Americans are cutting back, the Federal Government is increasing spending, giving themselves raises, and then asking for more. I agree, it was irresponsible of Bush and the Congress to cut taxes and wage war. Once we declared war, we should have reevaluated taxes. Just like it is irresponsible of Obama and the current Congress to increase spending more (beyond the even more expensive war). I believe that most people are so sick of the government taking more and providing so little in return that we are seeing taxes as the common rally cry for a much bigger problem.

  • Report this Comment On October 08, 2010, at 12:33 PM, snowmon wrote:

    The correct capital gains tax rate is Zero. It's double taxation- the money was already taxed when you earned it, then you get whacked again when you take a risk and invest it. Worse, the tax code has us paying capital gains taxes on inflation, which means the effective rate is much higher than advertised. In many cases, we are paying taxes on effective losses, [or the taxes themselves create the effective loss]. Buffett and Gates can write a check to the feds anytime they want. In fact, they [hypocritically] choose to manage their own vast charities with different spending priorities than the government has chosen. Please go away and leave the rest of us who are diligently trying to save and invest alone.

  • Report this Comment On October 08, 2010, at 12:34 PM, SpaceVegetable wrote:

    Two points of clarification: First, unemployment insurance is (at least initially) paid for by a tax on the employer. Extensions are another matter.

    Second, maximum unemployment benefits vary by state. In Massachusetts, it's over $700/week, based on how much you earned. Not everyone gets the maximum. Of course, MA is a high-cost and relatively high-tax state, so this maximum probably goes about as far as $300 in a small Midwest town.

    My opinions:

    Cut excessive entitlement spending. Too many people are sitting around with their hands out and too easily blame everyone else for their problems.

    Cut corporate taxes so we can compete better in the global marketplace.

    Incentivize companies to hire and produce here instead of oversease.

    Related to above, unions need to go the way of the dinosaur.

    Stop piling regulations on small businesses. Do you know what it will cost for small businesses to comply with the new 1099 rules or to implement online sales tax collection for 8000 separate tax jurisdictions?

    I'm completely fed up with both political parties. Democrats spend too much, stifle business, and support unions which have long since outlived their usefulness. Republicans are war-mongering and trying to foist their religious views on us while stifling incentives to create greener/alternative energy to get us off foreign oil, which forces us to send money for countries who hate us. Where is the happy medium?

    I would gladly vote for independent candidates who were fiscally conservative, yet believed the government need to focus on it's own people without intruding on their personal marriage or childbearing choices. We need to restrain outsourcing and importing talent via the H1B program and fight illegal immigration. We also need to tighten requirements for welfare. People should not be able to be on welfare for their entire lives and should definitely not get money for having more kids.

    I have two small businesses that are sole proprietorships. I work a "portfolio career" of doing contract and temporary work and run a part-time online retail business, so I'm well aware of what it costs to run a business and buy benefits. Most people who work for employers are insulated from these costs and really don't understand how expensive it is. Sure some CEOs are overpaid, but most businesses don't have a money tree growing in the corporate suite, despite what some might have you believe.

  • Report this Comment On October 08, 2010, at 12:42 PM, TMFHousel wrote:

    "The correct capital gains tax rate is Zero. It's double taxation- the money was already taxed when you earned it, then you get whacked again when you take a risk and invest it."

    You only pay cap gains tax on the gains, not the full amount invested. If your investment fails, you owe no additional taxes, and in most cases can write off the loss.

  • Report this Comment On October 08, 2010, at 12:55 PM, namkrad wrote:

    ‎47% of American earners don't pay income tax (from TPC) and nearly 24% of earners don't even pay payroll taxes (FICA, Medicare)... Let's just remove all the credits, deductions, additional payroll taxes and tax all income and each person the same percentage. Funny, this naturally has the consequence of the lower earners paying less, the middle class paying more, and the wealthy paying the most. If we completely remove itemized deductions, tax credits, and the graduated tax scale, and every person is allocated a standard deduction of $7,500, it would be both fair and responsible. So if you have 2 people in the household, you are allowed to clear $15,000 tax free. From there everyone and all income is taxed at a flat rate of 18%. This removes the ambiguity of what people owe and simplifies a complete sector of government. So, if you have 4 people at home and made $30,000, you don’t owe. But, if you made $50,000, you would owe $3600 ((50k-30k)*18%), $100,000 you owe $12,600 ((100k-30k)*18%), $200k, you owe $30.6k, and if you made $4M, you’d owe $714.6k. This simple formula could be directly extracted from your paycheck/interest/dividends and wouldn’t require much to audit.

  • Report this Comment On October 08, 2010, at 12:58 PM, jrj90620 wrote:

    We need a flat tax for all incomes.I suggest 15% with no deductions.Anyone,such as Buffet,could choose any % beyond the 15% and the extra could be applied to the lowest income levels to reduce their tax .This would allow people to earn more without having to worry about getting into a higher tax bracket.Would simplify and save $Billions spent on tax preparation.Would end all the wasted tax avoidance and tax shelter schemes.It would get the 47% of Americans who pay no taxes into the system.They wouldn't be so quick to elect big spending politicians.

  • Report this Comment On October 08, 2010, at 1:10 PM, macscot101 wrote:

    The lack of rational thought in the comments in this thread is dismaying. Warren Buffet and Bill Gates are being very thoughtful when they recognize the problem. It really will not hurt those in the top 2% of the income continuum to pay more in taxes. Income needs to match outflow as it did when Clinton was President. The Republicans in power spent more than they took in from 2000-2008 leaving a huge deficit that now has to be sorted out.

    It is more of the same fantasy-land thinking that says we can balance the budget, even with significant cuts, without increasing tax rates back to where they were the last time the budget was balanced. It is also not true that cutting taxes increases revenue. Look at the facts from our history and stop listening to empty and misleading rhetoric. The Motley Fool way is to deal with reality, not wishful thinking.

  • Report this Comment On October 08, 2010, at 1:23 PM, vicweast wrote:

    Before you insist on yelling in public, please spend some effort actually learning something. Most of the comments here evidence shallow and ideological opinions that are out of whack with reality.

    We can disagree, but unless we are rabid dogs, we have to accept facts if we are having a discussion.

  • Report this Comment On October 08, 2010, at 1:34 PM, MrArgentum wrote:

    Buffett, as usual, is spot on.

    First - Higher marginal rates encourage earners to reinvest income in means of production - i.e. grow their businesses and the economy - instead of engaging in unproductive speculative schemes as we have seen over the past thirty years? A growing business and government investment in infrastructure are far more productive uses of capital than personal speculation and excessive consumption. The Laffer Curve is fiction and along with it, the nonsensical, discredited policies of supply-side economics. How many times are we going to repeat this trillion-dollar failure?

    Second - yes, there is a spending problem. Actually, there are three spending problems starving the middle class economic engine. The first is social entitlement spending. Demographics, unfortunately, are not working in our favor as the poor and senior populations are growing. There are surely many redundant and inefficient programs (just as in the third problem described below), but if we are to maintain a tenable social safety net, this is going to continue to consume a large amount of money, despite the demagogues and fake populists who would have us believe it is all unconstitutional waste.

    The second spending problem is bad personal money management by the middle class who spent on credit beyond all reasonable levels and who demanded unsustainable growth rates - real or speculative - to finance that excess consumption. Those habits, attitudes, and unrealistic expectations must change starting with the person looking back at you in the bathroom mirror every morning.

    The third spending problem consists of well-camouflaged subsidies that are not so visible. For example, tax loopholes, earmarks, unnecessary government price and industrial supports - the list is endless - to say nothing of enabling and even sheltering the predatory practices of the financial industry. The recipients of this public largesse are very, very good at disguising it and keeping it out of public view. In total, it is at least as large a problem as social entitlements. Efforts at reform are fighting a well-financed headwind, but without meaningful market and regulatory reforms, this hole in the public bucket will continue to gush unabated.

    Although the economy is exhibiting signs of life, we are by no means out of the woods. Credit card debt has a long way to go before it returns to maintainable levels, keeping a lid on consumer spending. Commercial real estate valuation is still at bubble levels - that shoe has yet to drop in the banking industry. Foreclosures will remain at historic levels for the foreseeable future, depressing the home building sector. We need active government fiscal management with the fiscal means to intervene in a controlled manner during these and other upcoming fiscal storms. But the newly-minted fiscal discipline poseurs - entirely silent or even cheerleading during the years and years of rotten policy - are suddenly talking tough on the bailouts and stimulating the economy - it's easy since somebody else did the dirty work. By shouting them down, they have taken the known-effective tools of stimulus and responsible taxation completely off the table. We are now politically adrift, driven only by wind of the loudest voices. That we are not in a depression is a miracle and no matter how much the TARP and stimulus are decried, without them there would be no talk of recovery - we would still be falling.

    How long will it be before the Buffetts of the world stand up and give some political and economic cover to political rationalists so they can take on the extremists?

  • Report this Comment On October 08, 2010, at 1:40 PM, MrArgentum wrote:

    I hear a lot about the supposed 47% of Americans that "pay no tax." They may pay no Federal Income Tax, but I assure you that they pay a whole lot federal excise and state taxes and that the percentage of their income consumed by these taxes is substantial. I suggest that you try living in the "no tax" zone for a while and then come back and tell us what a cake walk it is. I'm not holding my breath.

  • Report this Comment On October 08, 2010, at 2:57 PM, SpecOpsGuy10 wrote:

    I didn't read all the comments, just sampled (late to the party) but macscot101 got it about right--the issue is NOT the tax rate (I'm in the top bracket and retired on my investments alone for another 1.5 years). The REAL issue is reining in spending, which NEITHER party seems to be willing or able to do. The Dems never saw a bleeding heart cause (Barney Franks and banks, AIDS assistance to Africa, bailing out Detroit) the feds shouldn't meddle in (and fund) and the GOP can't seem to shake the defense industry--they're all pigs at the trough.

    When the pigs at the trough (of whatever ilk) can demonstrably reduce the size of the trough, then and only then should we talk abouit taxes. If they can't do it in a fiscally constrained environment, for sure they won't do it wi the more taxpayer dollars available to play with!

  • Report this Comment On October 08, 2010, at 3:06 PM, SpecOpsGuy10 wrote:

    Sorry, I forgot the other instant target--Obamacare. We just added many dollars to the debt and to the deficit (they're different). Whatever happened to Pay-Go? (Clue: spineless pigs at the ....). And if illegal aliens' kids want to go to public schools and universities at resident rates (subsidized by state and federal tax dollars)--fine--pay all your back taxes first, which they couldn't do without an SSAN.

    It's really not about tax rates. It's about Federal expenditures.

  • Report this Comment On October 08, 2010, at 3:45 PM, sfghouse wrote:

    I'm shocked that so many of the posters believe that there is a strict relationship between what the Congress decides to spend and what is collected in tax receipts. Unfortunately, because politicians pander to their constituants, they _always_ spend more than they have. "Starve the beast" has only increased the total debt burden that we pass on to the future, creating economic drag.

    I like all of you would like lower taxes. Though, to be responsible, I'd like to both cut spending and raise taxes and begin to practice responsible governance.

  • Report this Comment On October 08, 2010, at 3:47 PM, FreeMortal wrote:

    Let's keep this in perspective.

    Our biggest budget problem (by far) is not human services, subsidies, infrastructure, or even defense. Our biggest budget problem comes from the non-discretionary obligations. Social security was not built to handle a generation that lives well into their 80s.

    Restructuring social security is such a political minefield that it is much easier for politicians to ignore it and score points with a sliver issue.

    If we don't fix it, the other slivers of the budgetary pie won't matter much in comparison. We'll have to pay for it somehow.

  • Report this Comment On October 08, 2010, at 4:10 PM, scottr8924 wrote:

    I think we are in danger in thinking that raising rates will automatically mean more revenue. It doesn't work that way. We have a truck dealership here. If we raise the sale price of every truck or truck part in our business, it will not necessarily mean that we will enjoy higher revenue. Raising rates could have a devastating effect on tax revenue. Cutting unnecessary spending would be a better way to start.

  • Report this Comment On October 08, 2010, at 4:50 PM, Brent2223 wrote:

    Disappointed that there's no debate around income vs. consumption taxes (talking personal taxes not coroprate taxes). A system of taxing income is much too cumbersome to administer, and it's the rich people who can pay people to find loopholes that ultimately benefit. Take a look at the documented margin tax rates vs. reality and see who's paying the bills. Consumption taxes are a much more efficient taxation system and ultimately taxes the people that can afford it (like Warren). Much easier to promote savings, just don't spend your money and you won't pay taxes. As opposed to paying taxes, being forced to give your money to a 'professional' to manage, and then get your taxes back after filling out 50 pages of tax returns. It pushes the tax burden onto those who have the money to spend, and away from those without free cash flow or who are prudently managing their savings. Income tax is a horribly complicated system, and the money paid to manage is just bleeding money out of the economy.

  • Report this Comment On October 08, 2010, at 5:20 PM, chrisbenson wrote:

    Dan Ariely ("Predicatably Irrational") has a very interesting wealth distribution graph over on his blog that I'd encourage you to visit and ponder. it takes a little while to grasp the presentation of the data, but when you do, it's real food for thought.

    http://danariely.com/2010/09/30/wealth-inequality/

  • Report this Comment On October 08, 2010, at 6:39 PM, smee wrote:

    The chart in the article does not look correct. The top marginal tax rate now is not 21 or 22%, but 35%. If a person is self-employed and both ends of FICA and medicare are added, that's another 15%. It depends on your state, but state income tax rates are often 7% or so. This does not even get to sales taxes, property taxes, government fees, excise taxes....

  • Report this Comment On October 08, 2010, at 7:34 PM, landmanbob wrote:

    I think Cenk Uygur stated it best recently:

    " In our glory years between 1945-1965 (these are the years that the Republicans dream of going back to), the top marginal tax rate fluctuated between 77 percent and 94 percent. I was stunned when I first learned that. People's heads would explode if you suggested those levels now. Yet, it worked for us for decades as we built the great American middle class and our manufacturing base.

    The second interesting fact is what happens when we have historically low taxes. From 1925 to1931, the highest marginal tax rate was as low as it has almost ever been -- between 24-25 percent. And between 2003-2010, the highest marginal tax rate was also at one of its lowest points -- 35 percent. So, what happened when we had these really low tax rates? The Great Depression and the Great Recession."

    And here's why:

    "At this point, you have to be curious as to why the economy goes up when we raise taxes, especially at rates that seem to defy common sense. I was a Reagan Republican growing up because the top tax bracket of 70 percent seemed crazy to me and he brought that down. I thought a rate that high couldn't possibly be the right balance.

    But now that I am a small business owner I get it. You see if taxes are low, like 20 percent, as a partner in my small business I am motivated to take out our profits as income for myself. Let's say my share of the business led to $100,000 in profits. If taxes are 20 percent, I pay $20,000 and keep $80,000. I can live with that split.

    But what happens when taxes are high? If I have to pay 60 percent, then I'm left with only $40,000 and the government takes $60,000. That sucks. I don't want to "lose" all that money. So, what do I do instead? I re-invest it in the business, so I don't have to pay taxes!

    If at the end of the year, my tax bill is zero, then I pay zero. Instead, by plowing the profits back into the business I help to grow it and make it even more profitable down the road. I might even hire more people with the extra money I kept in the business because that's a lot better option than just handing it over to the government.

    So, higher taxes don't lead to more investment and higher employment because I'm a liberal who likes to give away my money to the government. They lead to those good results for the exact opposite reason -- because I don't want to give away my money to the government."

    http://www.theyoungturks.com/story/2010/10/6/123731/070/Diar...

  • Report this Comment On October 08, 2010, at 11:02 PM, bigkansasfool wrote:

    "Let's not lose sight of Buffett's axiom here: "We're going to have to get more [tax] money from somebody". Is that a given? I think there are a lot more people who say that it would be a good idea to rein in government spending."

    Why is it that republicans and people on the far right that are supposedly "business minded" can't grasp the numbers involved here. No one is willing to cut medicare/medicaid. So then you have to try and cut from the rest of the federal government, however even if you closed down the entire federal government and fired everyone (including congress) you still wouldn't fix the problem. TAXES MUST BE RAISED thanks the the republicans cutting taxes and starting 2 decade long wars at the same time. Now it is only a question of HOW.

  • Report this Comment On October 09, 2010, at 12:34 AM, TMFDavidRivers wrote:

    It does seem like this argument is always ignoring a dependent argument on the purpose of government/taxation, but I do believe that such a discourse won't likely occur in any conceivable near future, considering the current state of political discourse in American society. So, on this false premise, as in many other arguments, we continue to bicker over bickering points when we didn't even agree on what we were actually arguing about to begin with. Yet, I digress.

    To reiterate some previous comments, it does seem completely irrational to me to discuss this matter at all (even if ignoring the fact that we disagree on what governments ought to be doing anyway) before we ensure that our government has an infrastructure that is fit to efficiently utilize its current funds.

    Fancy this example: If you contracted an electrician to fix your outlet, but he over-billed you, and the outlet ended up only working half of the time, would you re-contract him? What if he were the only electrician willing to work in the nation? Well, now, what if he somehow had the power to imprison you if you decided not to re-contract him or dispute payment of the first contract?

    The social contract is broken, but this issue is so far beyond "democratic" discourse, it's not even funny; it's sad.

  • Report this Comment On October 09, 2010, at 1:41 AM, TMFHousel wrote:

    Smee,

    I think you're looking at the wrong x-axis. The chart is correct.

    Morgan

  • Report this Comment On October 09, 2010, at 2:12 AM, TMFHousel wrote:

    Sorry, y-axis.

  • Report this Comment On October 09, 2010, at 6:08 AM, megar2 wrote:

    Wow, so great debate going on here, just had to chime in.

    I can tell who the youngish are here because it’s all about them and what is rightfully theirs. Such a sad preview of the future of our country. I hope they wise up and notice that they have been out FOXed by the greedy and self centered ones.

    Much has been said and many of the comments are great. I especially like MrArgentum, Edfinn1 and landmanbob.

    One simple thing that has not been discussed is the fact that government is the creator of and controller of all money used in commerce in the country. This fact makes the idea of “wasteful spending” silly. One person would think a military spy satellite is wasteful while another will think that a building low cost housing is wasteful. Both would be wrong because each of the activities causes economic activity in the country. In one case maybe even pushing our tech prowess up a notch or two in the other we get safer streets and fewer homeless. The government only collects and distributes money. It produces nothing but money, no products of any type. This way each dollar paid out is a dollar placed into the working economy or in other words private industry. The cut the spending crowd will find out quickly that when the government reduces spending it fires people who shuffle paper or do inspections, guard boarders, or fly jets. It cuts the dollars going to defense suppliers, high tech companies, large construction companies and corporate farms. In turn those people stop spending money at car lots, supermarkets, gas stations, Best Buy and Costco. And thing get worse.

    Governments grow with the size of the general economy, if it gets smaller while the larger economy grows we lose infrastructure and there are lapses in regulatory functions, research and development and education spending. We become a less competitive country.

    On the tax side, higher taxes on the wealthy cause the wealthy to invest their money rather than horde it and send it overseas. In the 50ies and 60ies a business owner with 5 million in profits would be taxed at 50-90% or could reinvest in more plants, equipment or employees and pay no taxes on the invested money. I know its social engineering through tax policies but history shows that it worked. As a side benefit if a power hungry pathetically greedy person wanted to buy political favors or the whole government at least the money got taxed at 50% to 90%.

  • Report this Comment On October 09, 2010, at 8:30 AM, 235c wrote:

    If raising taxes on the wealthy is the answer, why are the millionaires leaving states like New York, New Jersey, California, etc., to move to states with no income tax like Florida. New Jersey lost something like $70 - $90 billion by business and individuals moving out of state under the previous governor. The wealthy will always find ways to lower their taxes. Working in the investment business, I see more and more people working to lower their taxes, especially the death tax. Warren Buffett and Bill Gates' father are advocates of the death tax, but Buffett is leaving most of his billions to Bill Gates' foundation, thereby escaping taxes. That is a good cause, but what happens to the small businessman who died and wants his business to go to his family. It has to be sold to pay the taxes, whereby Buffett can live on by his generosity. Buffett may be a great investor, but I have lost respect for him for his liberal ideas.

  • Report this Comment On October 09, 2010, at 11:55 AM, sharpw wrote:

    The vast majority of posts here are incredibly self-serving. Greed has no bounds. How much money do you need?

  • Report this Comment On October 09, 2010, at 1:47 PM, SpecOpsGuy10 wrote:

    In response to sharpw: about $4 million. My 60 year old wife will live well into her 90s, I've probably got about 10-15 years left, Social Security will be effectively means tested out of existence for us in the near future (before we draw a dime!), same for Obamacare, and my military pension is looking none too secure. I worked hard, lived frugally, saved as much as possible, made some dumb investment decisions (and some not bad)--all to assure my wife lives as she's accustomed for the rest of her days in the greater Wash DC area without relying on a soul. That's how much money I (we) need.

  • Report this Comment On October 09, 2010, at 10:55 PM, exdefanalyst wrote:

    I am truly appalled to see a certain lack of compassion for one's fellow man, who due to job loss is down and under. With unemployment compensation at such low levels most people do not chose to stay out of work voluntarily, because they can live the "high life" on the pittance they receive per week. Amnesia must have set in with the people who blame this administration of getting us into the state we are in - sorry, that all started 10 years earlier. Tax cuts, 2 wars and negative job creation. Don't you think we ought to pay for the services we receive with tax $s , - education, public transportation, national security. Isn't it about time we take on some responsibility and see the bigger picture. How many more bridges have to collapse before we are willing to pay for improvement for infrastructure? How many more hours do we have to spend on the road commuting, before we go for a working public transportation system?

    I've lived in this country for nearly 50 years and have never seen my fellow citizens show so much selfishness and ignorance as is apparent right now.

    Warren and other billionaires have given several billions to alleviate some of the ills in this (and other countries) country that your tax dollars won't have to pay for - so be grateful rather than cynic.

  • Report this Comment On October 09, 2010, at 10:55 PM, DaretothREdux wrote:

    Morgan,

    What about the inflation "tax"?

    What is misleading is how much we are taxed without our knowledge by the printing press.

    Dare

  • Report this Comment On October 10, 2010, at 1:53 AM, ockhamsrazor wrote:

    whether taxes are higher or lower than they were formerly is an entirely separate question from whether they are at "correct" levels or not.

    i've seen ten thousand trolls complaining about how buffett is a liberal, but i can't recall one who has attempted to refute his basic point, that his taxes are lower as a fraction of his income, than those of someone who works for a living. every one of you who has something to point to, to suggest his understanding of business and economics might rival buffetts, would do well to present that at the beginning of his tirade.

  • Report this Comment On October 10, 2010, at 5:52 AM, ThomasStevens wrote:

    Taxes are a disincentive to invest or work? This is so disingenuous when you make as much as Buffet or Gates! What are they going to do with their money? Pull it out of the bank and put it under their mattress? Spend it in the economy rather than invest it? When stocks, bonds, and treasuries are all paying very little, do these people stop investing? No! They might choose a different risk portfolio. But invest they do because that's their only option. It's a closed system. Market movers will always invest and will always pay whatever tax rate is required of them.

  • Report this Comment On October 10, 2010, at 7:26 AM, Cmccourt19 wrote:

    Very good article. I was at one time completely against taxing of any wealth of any person. But what one has to understand is that taxes go back to the founding fathers and the early development of our country. America has also been and always will be a place wear one can achieve wealth at any level. Understand that one can not even dream of success in any other country. We all pay taxes but those that make it very wealthy in life, people who are taking in more than 1/2 a million dollars or more a year understand these people are wealthy because of who? because of you and me! lower, middle and upper class. Most of us do not even speak or hear of the super class which is what Mr. Buffet is speaking of. Mr buffet is for taxing those people of super wealth who are taking in more money than they can even spend. Tax the super wealthy if you want to pay for federal programs but don't raise taxes on the people working everyday to make a living. TAX Big business so we don't have to be taxed. Sooner or later this battle of big business versus taxes will end when the average person is tired of being taxed to the point of extinction. Again, Tax those who take in money, not those working for it. It's a difficult concept to understand but just take a deep breathe and let your mind ponder about it. As a side note, What I can't understand is how many ignorant people their are that are angry about socialized programs like welfare and unemployment.

  • Report this Comment On October 10, 2010, at 7:51 AM, bstog59 wrote:

    Sounds good to me as long as the threshold is far above the $200 t0 $250k that is currently being discussed. I am far more in favor of the rich and famous being taxed more than them giving their money to support deadbeats that choose not to work. I am a staunch conservative and believe wholeheartedly in capitalism; however, there is something fundamentally wrong with a tax code that taxes Warren Buffet less than his middle class employees. Having said that, I say we start by ceasing all foreign aid to Western European countries. Haven't we given these ungrateful socialists enough already. How about collecting on what they owe us for saving their butts during WWII? How about we stop sending all of our manufacturing base overseas. We can be competitive in the world market by using more technologically advanced manufacturing techniques. Correct me if I'm wrong, but the last time I checked, the best way to increase the tax revenue as a percentage of GDP is to build stuff here and sell it around the world. If this trend of sending all of our manufacturing jobs overseas, this country is doomed to fall into chaos created by the collapse of our economy.

  • Report this Comment On October 10, 2010, at 9:24 AM, tiredofcrap wrote:

    It is the corporations that send our work overseas. It is the corporations that corrupt the government and halt progress with bribes to congress. They are owned and controlled by the rich and powerful. They take our money we spend on goods and services and use it for their political purposes, to keep themselves rich. The top 1% of the people in this country have more of the wealth than the bottom 95%. Greed or what? The constitution gives the government the right to create life, liberty and the pursuit of happiness. Life means medical care, Liberty is the freedom to to be an equal - no silver spoons . Happiness requires a decent job to provide for oneself. Government should be sorting out medical care, rebalancing where the wealth is, providing opportunity and protecting the country and everyone in it from abuse. Look at the corporations who are funding the Tea Parties - to keep themselves in control by defeating those few who are trying to set the country aright again.

  • Report this Comment On October 10, 2010, at 9:34 AM, PhilM1957 wrote:

    I've heard this claim before that Mr. Buffett makes that he pays lower taxes than anyone in his office and without any tax shelters. I'd like to know how this is done, since as a licensed tax preparer - I see no possible way that this is possible. Earned income is taxed the same for everyone and is a sliding scale that goes up with the amount a person earns. The only way he could be paying less is he is not taking a salary. If that is the case, I'd say "yes, he's paying less than those who receive a salary" but I'd also say that he is being a tad disingenuous by making the statement in the first place.

  • Report this Comment On October 10, 2010, at 12:38 PM, grampastinky wrote:

    "What is the incentive to do better and develop yourself if the only thing you have to look forward to is a higher percentage of taxes if you do well in life"

    Right, exactly - if I have a choice between making a million a year and having a marginal tax rate or 40%, or making 75k and having marginal tax rate of 30%, why on earth would I want to make a million a year? I'd have to be some kind of weirdo that likes money or something.

  • Report this Comment On October 10, 2010, at 1:27 PM, kevinjs10 wrote:

    Let us not forget that Mr. Buffet also had a tax structure set up during the 1960s when marginal tax rates were at 60%. The reason why Berkshire Hathaway exists is because it was a tax structure. He would use it to buy other companies because the corporate tax rate was a lot less than individual tax rates.

  • Report this Comment On October 10, 2010, at 5:47 PM, dwheelerau wrote:

    Wow, I hope none of the cementers above are Christian, I think it clearly says somewhere in that bible of theirs that a rich man has buckles chance in Hell of getting to Heaven. Based on the comments above I see why the writer of that book would have predicted a rich persons fate in such a way. I maybe not a Christian, or even that rich, but I still think that taxes are an import part of living in a productive, crime free, caring society. Is that such a stupid ideal?

  • Report this Comment On October 10, 2010, at 6:00 PM, TMFHousel wrote:

    "I've heard this claim before that Mr. Buffett makes that he pays lower taxes than anyone in his office and without any tax shelters. I'd like to know how this is done, since as a licensed tax preparer - I see no possible way that this is possible."

    Most of his earnings comes from dividends and interest, which have much lower tax rates than marginal income.

  • Report this Comment On October 10, 2010, at 6:30 PM, daveefreedom wrote:

    Flat tax rate for everyone. This flat rate for Warren Buffet would probably be higher for him than what he is suggesting. I have never heard a good explanation of why we couldn't have a flat tax rate.

    Somebody enlighten me!

  • Report this Comment On October 10, 2010, at 8:37 PM, kalho13 wrote:

    I have see many interesting comments here, but one thing has been overlooked. While many people have recognized that a great deal of the problems encountered in this country are caused by congress, whether it be reckless spending or an unnecessarily complex tax code, the reason why has not been discussed. Decisions in congress on spending and taxation (again both parties) is simply about re-election. What will it take to get me re-elected appears to be the foundation so many political decisions that I really doubt many politicians truly have the best interest of the country and the people in mind. Of course there is a solution here. That is term limits. A senator or representative who spend 50 years in office serves no one but themselves and the addiction to power that comes with it. If you have doubt on this theory help me understand the purpose of pork spending, subsidies or the tax loopholes of constituents.

    I believe our congressmen and women have done great harm to this country and until the people are willing to stand up and demand something as simple as term limits it will continue. Until the decisions made by congress are made in the best interest of the country as a whole then I have no interest in paying more taxes so my money can be used to get then re-elected.

    So what will it take to implement term limits on senators and representatives? I can assure you congress will never implement term limits on their own as they are the ones who are feeding at the trough of power.

  • Report this Comment On October 10, 2010, at 11:29 PM, WillRackliffe wrote:

    I think taxes should be raised for all Americans. There is a principal that you should pay for what you consume and we have gotten very far from understanding it. When we start paying for what we are consuming, we will force our congress to stop burning our money.

    Thirty some years ago, California decided to pass Proposition 13, which said, basically, don't tax us, tax the people who come in the future. It did more damage to the wonderful state of California than anything else in it's history. California is still suffering from it and it will never recover. It was foolishness and greed, but it hurt the new comers and the old-timers.

    We are doing it again on the federal level. Give us bailouts, stimulus, medical care, unemployment, but don't raise my taxes!. Tax my children or tax the rich.

    That is very short sighted.

  • Report this Comment On October 11, 2010, at 12:45 PM, jvgfool wrote:

    Warren Buffett is an American hero. He knows you stimulate an economy from the bottom...not from the top. The top will get their just deserts as funds work their way upward through the economy. It's the only way you stimulate a free market economy. It makes you want to give the middle class a little more respect.

  • Report this Comment On October 11, 2010, at 1:40 PM, mb1043 wrote:

    I have listened to Buffett for a while on Taxes. I have a simple question for him and Gates. Why have they set up their fortunes in stock as donations to the Bill and Melissa Gates Foundation? Would it not be more intellectually inline with the "I am not taxed enough mantra" for them to hand their entire fortunes over to the Federal Government on their deaths, or even sooner? At least they would be consistent!

  • Report this Comment On October 11, 2010, at 1:46 PM, jaywmarshall wrote:

    STOP F@#$N SPENDING!!!!! Buffet is a putz!

    This is some kind of elementary type process right? -- You stop spending? no?

    America!!! Stop being sheep for the government they DON'T know whats best! -- Name one of their well run efficient programs???

  • Report this Comment On October 11, 2010, at 1:50 PM, jaywmarshall wrote:

    How can anyone trust Obama or the libs? - Oh yea this is he's first foray into running a business! it's kind of the wrong time to get your sea legs no?

  • Report this Comment On October 11, 2010, at 3:08 PM, KVoce2 wrote:

    Buffett has always shown common sense, and here he goes again, stating the obvious. With 2% of the population raking in 23% of the GDP, his suggestion that we go back to getting more taxes from the wealthy makes perfect sense.

    Greed has somehow become a virtue to many people. Can no one see beyond the present? Does no one care about the Common Good?

  • Report this Comment On October 11, 2010, at 3:23 PM, houdini666 wrote:

    Charts or no charts...or Buffett or no Buffett. This country does not need further taxation, it needs accountability and do not spend more than you have. Called managing your finances. It is credit and borrowing that has led this country into this recession..I mean depression. I work to support my family and I...not every other SOB in this country or on another continent. Social programs are not needed, government help...people need to start helping themselves instead of "what is the government going to do for me". Buffett is in the politicians back pocket...and he is angry because he didn't get to take over "Government Motors".

  • Report this Comment On October 11, 2010, at 5:20 PM, hokeyiu wrote:

    Mr. Buffet can pay my tax bill if he wants since he feels obligated to pay more. It's pretty easy to shout..'TAX ME AND MY KIND' when you are rolling in billions and old enough to be swirling the drain.

    He is missing the point...how about less f$%king spending?

  • Report this Comment On October 11, 2010, at 6:33 PM, kalho13 wrote:

    I do not see how proposition 13 was the worst thing that has happened to California when public unions and benefits to illegal aliens has driven the spending out of control. I have no interest in paying additional taxes to support any kind of political agenda.

  • Report this Comment On October 11, 2010, at 6:38 PM, ginalo wrote:

    What a bunch of crybabies! I am in business and if my tax bill is high, it means that I had a good year. I am proud to pay my taxes, and happy to live in a civilized country with public highways, bridges, police protection, schools, safe food and drugs, etc.

    As for "entitlements," you act as though everyone has the ability to change their situation. Let me enlighten you: Free will is a myth. Tell me how a child can dream about a college education when they go to bed hungry because their "parent" is a drug addict? What if you are born with a disability? or to parents that are illiterate? Just remember: If but for the Grace of God go I.

    If you can comfortably provide for your family, congratulations. Maybe if you have some extra time you can volunteer to help someone else out that is not so fortunate.

    And all you others who are complaining that union workers make $75,000 per year, just remember that the unions created the middle class. When unions were strong in this country, only 1 parent had to work and dad was home by 6:00 pm the latest and the family had dinner together every evening. Not only rich folks, but regular working people for the first time could afford to send their kids to college without parents having to go into debt. But greed put an end to that and rather than helping out their fellow Americans, corporations thought it was more important to send their money overseas for cheap labor, thereby enriching themselves and their stockholders. Forget about America, it's everyone for themselves.

    And those of you who envy those who don't work and live off the public dole, try living below the poverty level and see how great it is. I am sure you will be ready to jump at the chance to trade places.

    If you want to see fairness in taxation, then eliminate the most unfair tax of all, the payroll tax. And the only way we will ever see a return to healthy growth and productivity in this country is to improve the state of public education.

    This is why I support the efforts of Bill Gates and Warren Buffett.

  • Report this Comment On October 11, 2010, at 6:48 PM, nahummer wrote:

    It's so predictable that the old trope about not having any incentive to work if taxes on the highest marginal earnings go up a percent or two. Look at the graphs! I guess there were no rich people working 50 years ago? People, income inequality is the source of a majority of the problems facing the US and the UK today:

    http://theendisalwaysnear.blogspot.com/2010/09/lessons-on-ki...

  • Report this Comment On October 11, 2010, at 8:38 PM, toozie wrote:

    Buffet has nailed it. If a person does well in their business and makes a substantial sum of money, they can look forward to (a) paying higher taxes on an absolute and % basis than the person serving them lunch, and (b) still taking home a huge post-tax payday. As Buffet has said before, if he's paying a lot in taxes, it means he's made alot of money -- and he still keeps "alot of money" -- hardly a suffering wage.

    As for simply cutting government, as far as I know there's no possible plan to maintain the basic programs that provide a security net to our citizens -- Social Security, Medicare/Medicaid, the military -- without maintaining a substantial tax base. Cutting here and there is easier said than done.

    Last point, I agree wholeheartedly that we need to ensure a competent and efficient government, and I believe that the administration is doing a pretty good job of identifying and eliminating these inefficiencies (though I'm sure much remains to be improved).

  • Report this Comment On October 12, 2010, at 2:34 PM, lilywells wrote:

    boo-hoo-hoo!!! whah-whah-whah - pity the poor bunch of you cry babies who don't want to pay taxes in order to live in the best country the world has ever seen. Do you really think that this country would have been great if we had no public roads, no public schools, no public hospitals, nothing for the common good, only each man/woman for himself/herself? the most of us would be scratching for our bread while those with the power and the wealth lived in leisure. the thing I love most about the 'no taxes on the rich crowd', is that the people screaming the loudest aren't rich enough to even be affected. the scariest part is not taxes but what kind of fools are listening to the idiots running around spouting false truths.

  • Report this Comment On October 12, 2010, at 2:53 PM, basicecon wrote:

    I just love this sort of debate. "Inefficiencies, waste, fraud and abuse - if we just cut those out (and foreign aid, another good strawman), we'll be able to balance the budget!" Ha!

    A co-worker of mine is a delegate here in West Virginia running for re-election. During a debate where she was trying to retain her seat, she pulled out that line, at which point I asked for an example of this in the last two state budgets she helped pass.Somehow she was unable to come up with anything. Why not? For verily it is written that one man's pork is another's livelihood. Or re-election.

    I'll be more than happy to consider lowering taxes when they are paid for with spending cuts first. What we saw with "W" was the typical Republican ploy (see Reagan, Ronald) of pushing tax cuts (which are easy to agree to) first with spending cuts to follow (like never). Pulling our troops out of Europe, cutting severely back on the use of civilians in military slots, bringing our troops home from Iraq and Afghanistan and pursuing a much less adventurous foreign policy are some of the changes I'm looking for.

  • Report this Comment On October 12, 2010, at 3:12 PM, scm68gt wrote:

    Do you know what is driving the current economy? Smaller government. Year to date, the private sector has added 650,000 jobs. That's slow, but not terrible. Yet the government sector -- even after adjusting for the short-term census hiring and firing -- has shed 224,000 jobs. And the private sector is roughly five times larger than the government sector, so in percentage terms, the plunge in government jobs is more extreme than it looks here. Why is this happening? In short, government tax revenue -- particularly at the state and local level -- has fallen off a cliff, while the financial condition of the private sector has rebounded nicely.

    Many people want smaller government, and point to dismal jobs numbers to back up their reasoning. But what's causing those dismal jobs numbers? Smaller governments.

  • Report this Comment On October 12, 2010, at 5:39 PM, rfaramir wrote:

    "We're going to have to get more [tax] money from somebody"

    No. Doesn't everyone remember the Great Depression of 1920-21? (crickets) No?

    That's because a better Warren (G. Harding) dealt with it properly. He cut taxes, cut gov't expenditures more, and the Fed didn't inflate (any more, it already had during WWI). Unemployment went from higher than most of the Great Depression to low enough to cause the Roaring Twenties!

    Cut government spending. It's the only responsible way to deal with a budget shortfall.

  • Report this Comment On October 12, 2010, at 6:51 PM, scottr8924 wrote:

    I like Warren for certain things, but I highly doubt that any decent math can get him to 100 Billion more tax revenue by simply raising the tax rates on the "super rich" and somehow find a way to lower the rates on a certain portion of the rest of the population. I'd like to see how he can make that happen.

    But suppose he does find a way, it will eventually not be enough again if we do not have a good control on our wasteful spending.

    Does anyone doubt that we would be in the same position again at some point even if he comes up with the 100 billion???

  • Report this Comment On October 12, 2010, at 7:10 PM, scottr8924 wrote:

    Another comment.....you're puzzled at the thought of Reagan being praised, but Obama being reviled when the rate was actually higher under Reagan.

    Reagan successfully lowered the rate from where it was. An attempt to make the rate more fair. That's not easy to do.

    Obama is looking to raise the rate from where it is today without enough concern about correcting gov't wasteful spending.

    And believe me...no conservative thinker is very happy with the amount of deficit spending under "W"'s reign. You are correct to criticize that part of his presidency.

  • Report this Comment On October 12, 2010, at 7:15 PM, Mac82 wrote:

    Everyone needs to stop complaining. If a wealthy man desires to give more money to aid the government, that's a good thing. Obviously one $50 billion check is not going to solve the major problems of the economy, but at least it's a start. I completely agree with Buffet. If the very wealthy people are taxed more, it would definitely help the government to some degree. INstead of always arguing on whose opinion is the best, why can't we just suck up our differences and work together to get ourselves out of this mess. I'm not very old, but I do have some sense to tell me that arguing solves nothing. Why do we have to keep criticizing everything instead of thinking about the benefits. Why would some say no to an offer to help our economy? If the rich are taxed it would in fact help the economy. The billionaires do not need all that money, even after buying there 3 yachts. Besides if you're not one of these very wealthy people, why complain. The only effect taxing the rich will have on you is good. When you are starving and someone offers you food, I doubt you'll say no. I'd expect the same here.

  • Report this Comment On October 12, 2010, at 10:35 PM, Superheater wrote:

    People, don't be gullible.

    Because Buffett is a great investor and spins great yarns, doesn't mean he'll be confused with a saint anytime soon. Funny how all the people that despise Wall St types listen like ten year old girls at a Miley Cyrus concert

    If he really believes he needs to contribute more to the treasury, he can cut a check to the US Treasury, with a memo "for the relief of the public debt".

    Let him put up or shut up.

  • Report this Comment On October 13, 2010, at 12:03 AM, popster100 wrote:

    Government is sickeningly over-sized and over reaching in relation to the functions it was supposed to handle at the founding of the country. Taxes were never meant to be nearly as high as they are now. They are at 35% or so now only because of how out of control gov't spending is. First order of action is to radically reduce government size and spending and influence in people's lives......NOT tax increases.

  • Report this Comment On October 13, 2010, at 1:54 AM, Lawpark wrote:

    I have read so many comments, I love reading my peer's thoughts... My only addition to these conversations is to consider how much money our government wastes, who thinks our government is thrifty? I believe our government's money is spread too thin and if we can reign in those added costs (cap&trade, tons of subsidies, foreign aid, etc) we would not need to tax anyone extra.

    All our taxes could go down if we forced our politicians to spend within their means.

  • Report this Comment On October 13, 2010, at 11:08 AM, baod wrote:

    For all those folks that want to rein in government - what are you willing to give up? No more roads, no more protections for trade, no more military, no more schools, no more VA benefits - which one? In order to spend less we have to give up some of the things that we all enjoy - and don't get me wrong you enjoy them even if you don't realize straight away. You may not get that VA benefit, but does your neighbor, uncle, cousin, etc. How would they manage without it? We have evolved as a society to expect and depend on it. Just as each of the packages that have passed this year have in some way helped preserve the greater good. I am not saying government can't spend smarter and more efficiently, but if you want it to go away what are you giving up?

    Also none of you seem to grasp Mr. Buffet's point - why is he as a billionaire paying a lower % rate of tax then the cafeteria lady? The way the tax code is written he should pay more, but due to the legitimate deduction we can all take he actually passes less - is that fair? All he is proposing is that there be at the very least equity in the % rates.

    An economics teacher at one of the finest universities (Trinity College - Dublin) in the world once advised "Stop looking at the numbers they are meaningless. Look at the % rates" If we spend $12bn a month on the military what is that as % of the monthly government spend. That will actually tell you how much trouble we are or are not in! If you start by looking at your own spending that way things will start to have a whole new, and more realistic light. I started doing that many years ago and was amazed what % I spend on coffee - quickly changed that spending habit!

  • Report this Comment On October 13, 2010, at 12:01 PM, scottr8924 wrote:

    Let me improve my earlier comment. Let's say also that we found the 100 Billion that Warren talks about, (I haven't tried to figure out how it would happen) it still would not be enough to cover the deficit spending in any year since 2003. The projections are only worse from 2010 and for the upcoming years right now, so it won't get us there in any future year. So it would be nice, but unfortunately not enough to solve our real problem. I'm not a believer in doomsday projections, but......

    Isn't it a shame that our wonderful nation is in such debt? Isn't it a shame that we had to pay close to 500 billion of interest from 2007 thru 2008 (And I am not yet counting an amount of about the same size that is being accrued) . And it is projected to be higher in the future.

  • Report this Comment On October 13, 2010, at 1:22 PM, kingofromania wrote:

    If you get $100 billion more in taxes it means you borrow $100 billon less. Ha. Anybody wanna buy a bridge? If the govt gets $100 billion more in taxes rest assured it will be spent, not used to reduce the size or scope of the govt. To prove this one only needs to look at the continuious growth in size and spending. Lets stop all this social engineering and let the people decide how to spend their own money.

  • Report this Comment On October 13, 2010, at 1:57 PM, hachmujt wrote:

    @ baod, Thanks for the comment, I agree.

    I can remember 25 years ago my father telling me he did not mind paying taxes because that meant he was making money. As a 12 year old it did not make sense but always stuck with me.

    Today I feel the way my father did. I am grateful to pay taxes. It means I have a great job and investments. I love the security it buys me. I do not have to fear for my life on a daily basis, I have clean water and plenty of food.

    Everyone wants the security this country brings to their family and business, but they do not want to pay for it!

  • Report this Comment On October 13, 2010, at 8:00 PM, mm199691 wrote:

    I agree with kingofromania. Some people save 10% of what they earn. Some people spend 10% more than they earn. Our politicians have no reason not to spend 10% more of our money than is taken in in taxes. I am convinced that our deficit will go up as our taxes are increased. Our politicians will spend all of our taxes plus 10% more.

  • Report this Comment On October 13, 2010, at 8:42 PM, Pkylie wrote:

    The neocon's new american century. Who would have thought they meant usa going from penthouse to the outhouse ?

    Well done, repukes. Trillions flushed down the toilet over the Iraq War waged on cooked intelligence and you complain about TARP/stimulus all spent within usa to stabilize an economy ruined by neocons ?

  • Report this Comment On October 14, 2010, at 9:40 AM, Teo123 wrote:

    There's little doubt that Buffet is right. My favorite comment:

    The question is, do we get more money from the person that's going to serve me lunch today, or do we get it from me? I think we should get it from me.

    That says it all. I'm not for a balanced budget in all instances. Emergencies arise, such as war or national crises stemming from terrorist attacks or natural disasters. But, right now we have a trillion dollar deficit. Alone. And, most of that trillion stems from non-emergency spending. With the reduction in federal income taxes and the increase in discretionary federal spending, we've created a massive deficit. Yes, we have to cut some spending but we also need to raise some taxes. And, as Buffet suggested, the people who can afford the tax increases should pay for the tax increase.

  • Report this Comment On October 15, 2010, at 8:59 AM, basicecon wrote:

    You could easily make the argument that all Americans are undertaxed based on the difference between the services they demand and what they pay for them through taxes.

    I did an internship when I was in college for a Congressman. His comment in the days before earmarks hijacked spending and the normal review process was that all spending that was passed was put in for a reason. Whether he as a rep (from Massachusetts) agreed with that reason or not was often immaterial. It might be another Rep whose support or vote he needed for a bill that mattered to him later, perhaps years later, but there were all sorts of things that didn't matter to him and his constituents. If he could trade a yes vote on one of those bills for a promise of support later, he'd do it. And did.

  • Report this Comment On October 15, 2010, at 4:50 PM, rovobo wrote:

    FOOD FOR THOUGHT,Why did the conservative supreme court rule that political contributions can be hidden from public disclosure? who are these people and what is their agenda.Foreign countries,the banking industry,Evangelical right.WHO. So much for government of the people. We need more people like Warren Buffet speaking

    out against unadulterated greed in our country.

    Warren Buffet FOR TREASURY SECRETARY

  • Report this Comment On October 18, 2010, at 4:44 PM, FriedBrain wrote:

    @aggie9711:

    "No, but they make it harder to achieve. The taxes on Bob the Plumber's profits take the cash he could use to buy another truck and hire another plumber on staff, buy a piece of equipment, buy a bigger inventory of toilets, etc."

    That's a disingenuous argument. If Bob the Plumber buys another truck, or hires another plumber, or whatever else, he increases his business expenses - which offsets some business income, and reduces his net profit. All of this happens *before* taxes.

    By the way, this means that buying another truck, etc., cuts Bob's business taxes. You *do* realize that, right?

  • Report this Comment On October 22, 2010, at 12:38 PM, HeyPacketMan wrote:

    Just what the hades does Buffett think the guy that serves him lunch makes? I doubt anybody that waits tables in Omaha pays his marginal tax rates. In fact, the vast majority of table waiters probably don't make enough to pay income taxes at all.

    The reason capital gains tax rates are low is because that money is doing God's work - investing in enterprise that creates wealth, provides jobs and creates the JFK's "rising tide that lifts all boats". Low cap gains rates promote risk taking because the rewards justify increased risk when government at all levels doesn't swoop in to take half. If you want less investment, raise investment taxes.

    Our bloated federal government could burn through Buffet's and Gates' fortunes from lifetime of wealth building in less than a week apiece.

  • Report this Comment On December 05, 2010, at 1:53 AM, riffdex wrote:

    @first poster

    When you can figure out the correct usage of "too" maybe you will be smart enough to be in the highest tax bracket. (: Basically what you have said is "Why would anyone bother trying to become filthy rich if they are going to have to pay slightly more taxes?"

  • Report this Comment On August 19, 2011, at 4:51 PM, Hohndiesel wrote:

    A considerable weakness of this article is that it uses federal tax revenue as a proxy for whether taxes are high or low.

    This ignores completely the distinct possibility that taxes can be punitively high AND revenues to the government be low because of an extremely inefficient tax system.

    Think Laffer Curve and you'll get the point.

    Buffet is wrong.

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