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The problem with relying on taxing the rich …

The problem with relying on taxing the rich …

… in order to pay for your grand spending plans is that sometimes you run out of rich:

… based on 2009 IRS figures, … the number of taxpayers reporting annual income over $1 million fell 39 percent between 2007 and 2009; the number of super-wealthy individuals making over $10 million annually plunged 55 percent.

The carnage wasn’t confined to millionaires. The number of taxpayers earning over $200,000 per year also decreased by 612,000 – or 13 percent.

Ya didn’t think this through, did ya, geniuses?

Spotted in Ithaca:

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Comments

Aa Maggie Thatcher said, “The problem with socialism is eventually you run out of other people’s money.”

DINORightMarie | August 22, 2011 at 7:40 am

As has been noted over and over, in addition to your very relevant point, is that even if you taxed the “millionaires” at 100% – i.e. take ALL their money away – you wouldn’t be able to pay off the debt, or eliminate our debt problems! Bill Whittle’s Firewall had an excellent series: in “Eat the Rich“, he made that point clearly, in his informative yet entertaining way.

And, just what does “Health Care is a Human Right” really mean? We have health care available to all! Right now!!! What they mean by this seemingly innocuous phrase is that FREE medical care is somehow part of our “inalienable rights”. Why don’t people counter such tripe?! Grrrr……..

William A. Jacobson: Ya didn’t think this through, did ya, geniuses?

Your point isn’t clear. There was a devastating recession, so incomes dropped across the board. It wasn’t due to taxes, which are at among the lowest levels since WWII. And the wealthy tend to be high in assets, as well as income.

Once the economy returns to normal growth, though, the U.S. needs to tackle its deficit. That will means spending cuts and modest tax increases. Many economists believe Clinton-era tax rates would be a reasonable level to allow for growth, while providing the government additional revenues; that, and closing the many loopholes in the tax system. Longer term, restructuring entitlements will become a necessity.

    JayDick in reply to Zachriel. | August 22, 2011 at 9:58 am

    On what are you basing your statement that taxes are the lowest since WWII? Tax rates? For this purpose, the most relevant measure is taxes as a percent of GDP; I think that is pretty stable — 18-19%. And, we have one of the highest corporate tax rates in the world.

    Do you think taxes have no effect on the economy? Many other factors affect the economy as well, but taxes certainly do, especially the top marginal rates.

    I think Jacobson’s point is very clear. Those wanting to raise taxes don’t really understand the economy or the likely effects of what they are proposing. As you say, the only really viable way to increase revenue is to improve the economy. The trick is, how do you do that? Democrats don’t have a clue.

      Zachriel in reply to JayDick. | August 22, 2011 at 10:11 am

      JayDick: For this purpose, the most relevant measure is taxes as a percent of GDP; I think that is pretty stable — 18-19%.

      Not sure where you are getting your information, but taxes as a percentage of GDP have dropped lower than at any time in 60 years.

      http://blogs.reuters.com/felix-salmon/2010/12/06/chart-of-the-day-u-s-taxes/

      http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

        Steve in reply to Zachriel. | August 22, 2011 at 11:16 am

        JayDick: For this purpose, the most relevant measure is taxes as a percent of GDP; I think that is pretty stable — 18-19%.

        Not only that but %GDP doesn’t matter. It is a made up *Estimate* of production. Whereas The debt and interest it earns are in absolute dollars.

        If GDP dropped to $12 and I taxed and collected $6 would that help me at all when I tell the creditors I was earning 50% GDP? So why Use this measure? Because then the the spinmeisters can claim that lower tax rates don’t increase revenue! Someone claimed bush tax cuts lost revenue…guess what the measure was? GDP! In Real dollars though the first few years it was lower but grew EVERY year until surpassing the revenue at the old tax rate for several years by 2008.

        This is the same thing Record companies claim phantom damage due to lost sales, Congress does with baseline accounting. Those imaginary numbers don’t matter… what does is how much you collected, how much you borrowed, and how much you spent in real dollars.

        Is this so hard to understand? What happened to all those people like poor warren who can’t add or subtract?

          JayDick in reply to Steve. | August 22, 2011 at 11:46 am

          Different measures are better for different purposes. Your examples are absurd, but you may be correct about tax/GDP numbers. I did not realize they had fallen so much. I still think taxes as a percent of GDP is a useful measure despite the problems you point out, as are top marginal rates.

          However, the main question is, would raising tax rates, as Democrats espouse, result in significant additional revenue. Jacobson’s point is that it would not. I don’t see what’s unclear about that.

    Zachriel, you say,

    “Once the economy returns to normal growth, though, the U.S. needs to tackle its deficit. That will means [sic] spending cuts and modest tax increases.”

    Even if I were to concede the legitimacy of the argument for what you laughingly term “modest tax increases” — which I do not — by your own admission, you at least concede that tackling the deficit is an important objective.

    My guess would be that you and your Obamaites had little or nothing to say publicly about the dangers of deficit while Obama was setting off his mushroom cloud of federal spending, the ones that he believes will lock us into permanent problem territory.

    I’d also add that it is folly to suggest it should only be tackled after a return to normalcy. That is just a back-handed argument for an additional spending spree.

    Face it, Barack Obama does not believe in normalcy. His economic “vision” is of a substantial increase in statist control of the national economy, and a growing portion of the electorate whose “self interest” will be increasing dependence on the federal government for all aspects of their lives — or in his words, “fundamentally transforming the United States of America.” There will never be a return to “normal growth” under the Obama model, so in that sense I guess you could never be proven wrong. Cute . . . but dead wrong!

    Like it or not, Obama’s free spending policies and persistent class warfare demands for imposing huge tax increases on the “rich” have prolonged the recession he cynically promised to end, and the now threaten to cast us right back into a cycle of severe economic turmoil.

    We’ll be there to see you out the door in 2012.

      Zachriel in reply to Trochilus. | August 22, 2011 at 2:02 pm

      Trochilus: Even if I were to concede the legitimacy of the argument for what you laughingly term “modest tax increases” — which I do not —

      Tax rates at levels during the Clinton Administration provided for a much stronger fiscal position while allowing for sustained economic growth.

      Trochilus: you at least concede that tackling the deficit is an important objective.

      Of course. These are the priorities:

      Short term: jobs
      Medium term: deficits
      Long term: entitlements

      Trochilus: My guess would be that you and your Obamaites had little or nothing to say publicly about the dangers of deficit while Obama was setting off his mushroom cloud of federal spending, the ones that he believes will lock us into permanent problem territory.

      In fact, balancing the need for stimulus with the problem of long term debt are at the very heart of resolving the economic problem. There was a multi-trillon dollar hole blasted into aggregate demand by the financial meltdown. That means strong stimulus at the beginning with a credible plan for repaying the debt. That the U.S. had a proportionally smaller stimulus than China, and the U.S. political system appears dysfunctional, has left the Americans economically mired.

      Trochilus: Like it or not, Obama’s free spending policies and persistent class warfare demands for imposing huge tax increases on the “rich” have prolonged the recession he cynically promised to end, and the now threaten to cast us right back into a cycle of severe economic turmoil.

      Taxes are a smaller proportion of GDP than anytime in the last 60 years.

      http://blogs.reuters.com/felix-salmon/2010/12/06/chart-of-the-day-u-s-taxes/

      http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

        Zachriel:

        “Tax rates at levels during the Clinton Administration provided for a much stronger fiscal position while allowing for sustained economic growth.”

        Driven, of course by a Republican Congress post-’94 that set a course of balancing the federal budget, and including welfare reform, which this President would no more consider than the man in the moon!

        The fact is that there is no way the economic situation in those years was comparable to the current situation.

        You say “jobs” are the top priority now . . . but what you really must mean is boodles of public money-driven public sector jobs, because increasing taxes on those most likely to invest in private sector job creation (whose numbers are decreasing) is counter-intuitive to the idea of stimulating real job growth.

        Here Zachriel . . . take a look at these and you tell us who you want a piece of to help fulfill Barack Obama’s dream of radically transforming America?

        . . .

        According to the latest IRS data:

        • The top 1 percent of income earners pay 38 percent of all federal income taxes. They earn 20 percent of all (adjusted gross) income.

        • The top 10 percent of income earners pay 70 percent of all federal income taxes. They earn 55 percent of all income.

        • The top 25 percent of all income earners pay 86 percent of all federal income taxes. They earn 67 percent of all income.

        • Approximately half of U.S. households pay no federal income taxes whatsoever.

        From which of the above categories do you want more “shared sacrifice?”

        Do you want those in the top 25 percent of income earners to pay more than 86 percent of all federal income tax? If so, how much more?

        . . .

        And, you might keep reading when you go to the link. There are other pertinent questions posed there as well.

          Zachriel in reply to Trochilus. | August 22, 2011 at 3:44 pm

          Trochilus: Driven, of course by a Republican Congress post-’94 that set a course of balancing the federal budget, and including welfare reform, which this President would no more consider than the man in the moon!

          Pressure from Republicans was certainly important, but Clinton had campaigned on welfare reform. Working with Republicans, in particular, Newt Gingrich, Clinton found a way to move people off of welfare into work by providing the support they needed during the transition; and of course, making sure jobs were available in the expanding economy. The key, of course, is that the tax rates were higher, yet the economy experienced one its longest and most broad-based expansions in history.

          Trochilus: The fact is that there is no way the economic situation in those years was comparable to the current situation.

          That’s right. The U.S. has just suffered the greatest financial meltdown since the Great Depression. It would be a mistake to raise taxes before the economy has resumed normal growth.

          Trochilus: You say “jobs” are the top priority now . . . but what you really must mean is boodles of public money-driven public sector jobs, because increasing taxes on those most likely to invest in private sector job creation (whose numbers are decreasing) is counter-intuitive to the idea of stimulating real job growth.

          Actually, if you raise taxes it won’t have much stimulative effect. You seem to be confused on the basics.

          Trochilus: take a look at these …

          Any time numbers are slanted like that it reveals an agenda. In fact, 40% of federal revenues are from regressive payroll taxes. The federal tax burden by quintile in 2007 was 4%, 11%, 14%, 17%, 25%. Nearly everyone but the poorest are paying into the system.

          Zachriel (had to reply to myself — no further available bracket from your latest.)

          2007?

          Newsflash: 2007 was four years ago. There is much more current information available, reflecting the Obama changes. The NRO post was based on the latest IRS data.

          And, by the way, I never said it was a reflection of all federal revenues, just income taxes which was the basis of the topic of conversation. With revenues like federal gas taxes, obviously it is more difficult to say precisely who is paying them and in what percentages.

          Got any answers for the questions?

    This is where liberals try to move the goalposts by defining the terms to their advantage. For example, “tax”: the money I am required to give the government to carry out the government’s requirements. Zach wants to define it as checks written to the government.

    But if the government requires me to spend $1,000 to install “water purifiers” to remove arsenic that’s already cleaner than the natural water supply, Zach wouldn’t define that as a tax. But it’s still money that I can’t spend to grow my business. Regulations suck WAY more money out of our pockets than at any other time in history. That counts as taxes too. It also meets the classic definition of fascism: nominal private ownership masking government control of the economy through regulation.

    Weirddave in reply to Zachriel. | August 25, 2011 at 1:38 pm

    I’ve tackled this with you before. You want Clinton era tax rates, but you’re not willing to accept Clinton era spending rates.

    No deal.

      Weirddave in reply to Weirddave. | August 25, 2011 at 1:43 pm

      This was in reply to Zachriel. Dunno why it got stuck down here.

      Zachriel in reply to Weirddave. | August 25, 2011 at 1:51 pm

      Weirddave: I’ve tackled this with you before. You want Clinton era tax rates, but you’re not willing to accept Clinton era spending rates.

      We responded in the previous thread, but will repeat it here:

      Weirddave: You want to return tax levels to Clinton era “norms”? No problem. I’ll agree to that in a heartbeat. As long as we return spending to Clinton era “norms” as well.

      You haven’t actually solved your problem yet. The population has increased, but more importantly, the population is aging, along with allowing medical inflation to run out of control. Add a couple of wars to the mix, and the budget is out of kilter. It’s going to require cuts and taxes.

        Weirddave in reply to Zachriel. | August 25, 2011 at 7:58 pm

        Baloney. When Clinton left office, the budget was just a shade under 2 TRILLION dollars per year. I absolutely guarantee you that I could fund the enumerated functions of the federal government AND an adequate social safety net for $2 trillion.

          Zachriel in reply to Weirddave. | August 26, 2011 at 7:30 am

          Weird: Baloney. When Clinton left office, the budget was just a shade under 2 TRILLION dollars per year. I absolutely guarantee you that I could fund the enumerated functions of the federal government AND an adequate social safety net for $2 trillion.

          Go for it. Social Security, Medicare/Medicaid, the military and interest on the debt are running about $2.3 trillion. That doesn’t include the FBI, federal prisons, highways, veterans’ programs and homeland security; not to mention the minor functions of food and drug safety, unemployment, scientific research, NASA, weather forecasting, etc.

          Weirddave in reply to Weirddave. | August 29, 2011 at 3:57 pm

          Actually, about $1.9T for those things you list. So, $100B left for all the rest you listed….maybe not, I was a bit glib, but give me a free hand and I could do it for less that the 2.6T in revenues we have by cutting most of the rest of what’s left, stuff the Feds do but shouldn’t.

There are plenty of problems with what passes for thinking among “liberals” (who are, in fact, about the most illiberal people on the planet). One that stands out, though, is the belief that, if the government changes something, everything else will remain the same. It never occurred to the “liberals” who have dominated California’s legislature for more than two decades that people like me would leave if the state raised our taxes and spent money on things that we didn’t want but not on things that we did. The result has been a large exodus of people like me – high income (which is something different from being rich) and placing very few demands on state and local government (I’m single and childless), replaced by people placing large demands on state and local government but paying very little in taxes.

Zachriel: please clear up your point for me.

Haven’t the tax-happy Democrats done their level best to raise spending (debt ceiling “debate”) and don’t they keep talking up “taxing the rich”? Doesn’t that create an expectation in the business community? Actually, doesn’t that create a level of uncertainty in the business community that stalls the typical “recovery”? The Biden-touted “recovery summer” of 2010 didn’t happen. Toss in regulation-happy Democrat bureaucrats shutting down lemonaide stands and oil drilling permits and coal-fired power plants and you have the Perfect Storm of Democrat iron-fisted “Tax, Spend and Regulate”. The economy can’t recover under these conditions. Why don’t we just call it what it is? A Depression!

Spending Cuts, Not Tax Hikes, Best for Deficit: Economists

In other words, “Oh my God!! Those Tea Party Bodysnatchers are turning our economists into terrorists!”

Harvey Golub: My Response to Buffett and Obama

In other words, “Oh my Gawd! Either spread your ill-gotten wealth around, or earn it the honorable way, dude! Write a few autobiographies!”

boudicca: Haven’t the tax-happy Democrats done their level best to raise spending (debt ceiling “debate”) and don’t they keep talking up “taxing the rich”?

Other than the stimulus, which are one-time expenditures, and safety net spending, which was built into the system previously, what additional spending are you referring to? Obama supported raising the tax rate to Clinton-era levels on high income households, while also advocating for a temporary reduction in payroll taxes on the working classes.

boudicca: Doesn’t that create an expectation in the business community?

That’s not the reason for lack of investment. Aggregate demand is low because of deflationary pressures. Why buy now when the price will be lower later? Why invest when everyone is afraid to spend? Taxes were somewhat higher during the Clinton Administration, but there was no dearth of investment. People will spend on investment when there is demand. People will spend on themselves, when they are confident in their future economic prospects. This is basic economics.

Iowa Jim: There are plenty of problems with what passes for thinking among “liberals” (who are, in fact, about the most illiberal people on the planet). One that stands out, though, is the belief that, if the government changes something, everything else will remain the same.

Not all liberals think that way, of course, just as not all conservatives believe that nothing ever has to change.
http://zachriel.blogspot.com/2005/07/liberal-v-conservative.html

    SmokeVanThorn in reply to Zachriel. | August 22, 2011 at 1:22 pm

    The “stimulus” consists “one time expenditures?” My understanding is that Obama’s joke of a budget and the Democrats’ present “budgetary position” include the amount of the stimulus within the baseline from which they wish to increase spending further.

    Denying that the Obama Administration has increased and wishes to continue to increase spending – now that’s a “demonstrable error.”

      Zachriel in reply to SmokeVanThorn. | August 22, 2011 at 1:52 pm

      SmokeVanThorn : The “stimulus” consists “one time expenditures?”

      That is incorrect. The extended baseline is based on current law, including expiration of the tax cuts and ending of the stimulus. CBO also offers an Alternative Fiscal Scenario, which includes renewal of the tax cuts, but does not include additional stimulus spending.
      http://www.cbo.gov/doc.cfm?index=12039

        SmokeVanThorn in reply to Zachriel. | August 22, 2011 at 6:02 pm

        See http://www.heritage.org/Research/Reports/2011/03/Obama-s-2012-Budget-Offers-More-Gimmicks-Not-Reform re: whether (a) stimulus spending is imbedded in Obama’s budget and (b) Obama’s increased spending and desire to increase spending even more.

          Zachriel in reply to SmokeVanThorn. | August 22, 2011 at 7:08 pm

          Your contentions is not supported by your citation, which mentions “stimulus” just once:

          “The proposed freeze merely locks in the 25 percent increase these programs have received since 2007 (they also received $311 billion in one-time stimulus funding), at a time when fiscal reality demands cutting spending and eliminating failed programs.”

          The 25% increase refers to increases to their overall funding. The stimulus is an “also received” “one-time” funding and not part of the baseline, directly contradicting your contention.

Almost forgot. From the creator of the Laffer Curve:

Buffett a Hypocrite for Seeking Tax on Ultra-Rich: Laffer

Zachriel:

got to troll conservative sites to drive traffic to your website?

bouddica: got to troll conservative sites to drive traffic to your website?

We couldn’t care less about traffic. We linked to a discussion of liberal vs. conservative in order to highlight the unbalanced definition being used by Iowa Jim.

As for commenting here, we saw an interesting discussion, but one which was fraught with demonstrable errors. The original post suggested that the number of high income earners decreased because of taxes, even though taxes as a percentage of GDP are at a very low point historically. Another commenter was confused on this point. You, on the other hand, talk about increased spending by the Obama Administration, but haven’t been able to point to specifics.

    Yackums in reply to Zachriel. | August 23, 2011 at 10:05 am

    You seem to be conflating two things throughout this discussion: tax rates that the government levies on various income groups, and tax collections – actual revenues collected by the government. It is this second item that is compared with GDP. Now, in the graph you have linked here more than once, you note correctly that tax collections as a share of GDP have declined recently and are now at 40-year lows. Note, however, the other two or three steep declines over the years: Late ’70s – early ’80s, and early ’00s. Those declines were concurrent with the recessions of those times. Both of which were ultimately reversed by lowering taxes and deregulation, which are the only true economic stimulants. Only private-sector growth, based on a clear expectation of non-interference from the government, is capable of raising government revenues, as long as it is not choked off by tax rate increases.

    Let me put it in a way that even the simpletons here (does not include you; you are at least arguing cogently and intelligently) can understand:

    The only way to get a bigger piece of pie is to do so in a way that won’t make someone else’s piece smaller. In other words, make the whole pie bigger.

      Zachriel in reply to Yackums. | August 23, 2011 at 12:24 pm

      Yackums: You seem to be conflating two things throughout this discussion: tax rates that the government levies on various income groups, and tax collections – actual revenues collected by the government.

      Not conflating it at all, indeed, pointing to the distinction.

      Yackums: Those declines were concurrent with the recessions of those times. Both of which were ultimately reversed by lowering taxes and deregulation, which are the only true economic stimulants.

      You seem confused on the difference between a stimulus, which is necessarily temporary, and economic policies designed to yield long-term growth.

      Yackums: Only private-sector growth, based on a clear expectation of non-interference from the government, is capable of raising government revenues, as long as it is not choked off by tax rate increases.

      That ignores the record and broad-based expansion during the Clinton Administration.

Don’t know why the threading isn’t working, but we replied to SmokeVanThorn above.

TAX GREED
and give the $ to me

I’M ENTITLED
to your fair share

Trochilus: And, by the way, I never said it was a reflection of all federal revenues, just income taxes which was the basis of the topic of conversation.

By only including the income tax, it creates a false impression of the tax burden. You can’t draw accurate conclusions about the overall fiscal situation by doing so, and that was the topic of conversation.

We already indicated that Clinton-era tax rates would be appropriate, but only once the economy resumes normal growth. The U.S. is heavily indebted, and it’s pretty clear that, short of dismantling Medicare, it will require revenues to close the fiscal gap.

    Zachriel:

    As I said before, income tax revenues were what the conversation was (and has been) all about, including in the professor’s original post above, in response to all the ugly “class warfare” nonsense coming from the President.

    “We already indicated that Clinton-era tax rates would be appropriate, but only once the economy resumes normal growth.”

    Which again makes all the polemical chatter from the President and his party essentially deceptive, both as a basis:

    • for the recently concluded debt talks; and,

    • likely for the remainder of the campaign cycle, which would explain Obama’s continuing broken record calls to “tax the rich.”

    It is all he’s got because everything he tried to do failed.

Trochilus: As I said before, income tax revenues were what the conversation was (and has been) all about, including in the professor’s original post above, in response to all the ugly “class warfare” nonsense coming from the President.

Yes, and if you go about the unfairness of some people not paying income tax while ignoring that they pay other taxes, then your position is misleading. It’s not class warfare to point out that Buffett pays a lower tax rate than his help, and that this is arguably an unfair situation, especially as the U.S. is straining under economic problems while conducting overseas wars.

William A. Jacobson’s original comment concerned the reduced numbers of the rich, which is due to the recession, not taxation, though many have made a lot money. No one suggests you can balance the budget by taxing the rich, but that a return to Clinton-era rates on the upper-income brackets could help with deficit reduction while still allowing for incentives for growth. Better still, remove some of the loop-holes directed at the upper-income brackets.

    SmokeVanThorn in reply to Zachriel. | August 23, 2011 at 11:35 am

    Can’t add a reply above, so I will do so here:

    Using the word search function to look for a specific word in a document – like “stimulus” – is not the method of someone who wants to understand an issue, as opposed to scoring meretricious points.

      Zachriel in reply to SmokeVanThorn. | August 23, 2011 at 12:16 pm

      <bSmokeVanThorn: Using the word search function to look for a specific word in a document – like “stimulus” – is not the method of someone who wants to understand an issue, as opposed to scoring meretricious points.

      Your claim was that the budget included :the amount of the stimulus within the baseline from which they wish to increase spending further.” We provided a citation to the CBO, and your own source directly contradicted your position, which we quoted here again.

      “The proposed freeze merely locks in the 25 percent increase these programs have received since 2007 (they also received $311 billion in one-time stimulus funding), at a time when fiscal reality demands cutting spending and eliminating failed programs.”

Zachriel: “Yes, and if you go about the unfairness of some people not paying income tax while ignoring that they pay other taxes, then your position is misleading.

Individual income taxes account for approximately 45% of total federal revenues, a percentage that has been relatively stable for several decades. It is the biggest single chunk.

And lets be honest . . . SSI is really in a category of it’s own, or at least it is according to law. I cannot think of a justifiable reason someone should be able to draw down from the retirement account without having made the legitimate contributions thereto. Of course, others disagree . . .

But the big fiscal problem right now is the baby boom bumper crop of retirees drawing down benefits, with a basically level influx of revenue “income” from younger workers.

Now, as for federal fuel taxes, give Obama time, for heaven’s sake. He and the elitist Democrats are systematically attempting to drive people out of their cars, one way of which is by pushing to raise federal gas taxes to the point that only those with means will be able to afford to drive. And mass transit will continue to be subsidized at unjustifiable levels. They talk about it all the time. Where have you been?

As for Warren Buffett:

If Warren Buffett was serious about the need for him to pay more personal federal income taxes — I strongly suspect he was not addressing corporate income taxes — instead of just looking for a way to score a political point for his friend, he could have easily done so, as was noted by one writer, by simply filing for the standard deduction!

It is not a bracket problem, as you parroted . . . rather, he obviously must have chosen to shelter much of that income, likely through gifts to foundations.

But in the recent past, he also made it clear that his generous charitable giving is, in the long run, a way to ensure that his money is more effectively spent that way than if it was just handed over to the government.

So, I’d have to say that I agree with the following comment of his from back in 2007:

“In 2007, Mr. Buffett said, “I think that on balance the Gates Foundation, my daughter’s foundation, my two sons’ foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government.”

So when he recently started publicly grousing about not having the honor of paying enough in Federal personal income taxes, he was just not telling the whole story. He was trying to give his buddy Barack Obama a little political boost.

And in doing so, he was also taking issue with the Warren Buffett of just a few years ago!

    Zachriel in reply to Trochilus. | August 23, 2011 at 2:29 pm

    Trochilus: But the big fiscal problem right now is the baby boom bumper crop of retirees drawing down benefits, with a basically level influx of revenue “income” from younger workers.

    To finance their retirement, people have been overpaying Social Security for decades in order to build up a surplus. So Bush lowered income taxes. The income tax payers, who are supposed to pay for most of government services other than entitlements, have been getting a break for years.

    Trochilus: It is not a bracket problem, as you parroted . . . rather, he obviously must have chosen to shelter much of that income, likely through gifts to foundations.

    One such anomaly is the 15% rate that hedge and private equity fund managers pay on what is essentially their salary, as opposed to the marginal tax rate plus payroll taxes their secretary and cleaning person pays.

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