Tag Archives: Buffett Rule

Ramblings of ConservativeCathy – The Buffett Rule or is that the Buffet Rule?

Taxes should not be a “buffet” where you get to pick and choose what you like and don’t like.  It is supposed to be a just and equal system.  Which is preposterous as it is based on penalizing those who are more successful –not quite sure how that is just or equal but we will deal with that later.

Let’s talk about all those millionaires that do not pay taxes or pay less then their secretaries.

The tax codes are difficult to follow and it is fair to say that many people pay taxes multiple times on the same money.

Basically taxes are based on actual income earned from working in a progressive manner with those making more paying a higher percentage rate.  But the main problem is with all the loopholes written into that code.  Most of us are familiar with mortgage deductions and charitable contribution deductions, but there are many many pages of many more deductions.  These are the loopholes everyone is referring to.

So when a millionaire receives income from working they pay at the highest percentage rate of taxes (not counting deductions) then they take that money and invest it (means making it work by putting it into other business) then when they receive additional income from that investment they only pay approximately 15% on that investment.  Now that money that they were paid for their investment has already been taxed for the company paying the interest on the investment in several different ways and now that it has been paid back to the investor he must now pay that additional 15% on it.  Keep in mind that if he lost his investment he can only deduct that which he lost minus whatever he had received on it (this is very simplistic but close enough I think – if you invested $10,000 and had received $1,000 on it you now lost $9,000).  I am not sure if you can declare the complete $9,000 as deduction but even if you can you have lost much more than that in reality as if you had just put it into a bank or some bonds or such you probably would have earned more (unless this is a short term loss) but you can not take that into account – you also can not take into account that you previously paid taxes on the $1,000.

The reason we offer a lower tax rate for investment is that it is good for the economy and society as a whole.  Already the tax rate for companies is the highest in the world and the tax rate for investment is the highest in the world so actually we are hurting ourselves when we claim it is not fair for millionaires to pay a lower tax rate.  They already paid the higher rate when they actually worked and earned that money now they are only investing it instead of hoarding it like Scrooge McDuck.

Now back to Mr. Buffett – my understanding is that he does still work for his company but chooses to take his pay in the form of stocks.  That means that he has enough money to live on so instead of taking actual pay then he pays only 15% on the profit on his investment annually (the stock).  Now in reality if he sells that stock he will pay the higher tax rate again but right now he is only being taxed on the capital gains he receives.  So you are not comparing apples to apples in this scenario.  Of course the ultimate irony about the Buffett rule is that is comes from a man who one minute states he wants to pay more but doesn’t go to the IRS web site that allows him to pay more of his own free will, and who says he should pay more one moment and next the company that he is chief executive of, Berkshire Hathaway, is behind in taxes by millions of dollars dating back to 2002 and is fighting in court what they should pay.  Hypocrisy thy name if Buffet.

What we are doing is cutting our own throats to do something that sounds fair on the face of it but if you look at it in the real context you can see that they are not really paying less in taxes but just postponing the inevitable and as the pot grows the inevitable will be a substantial amount.  Also keep in mind that with a death tax penalty that for most people the inevitable moment comes when they die and their estate is over taxed at around 45-50%.  Gee I think that more than makes up for the lower taxes while they were alive.  Especially when you think of all the benefit the economy received by their keeping the money working in the economy instead of hoarding it or accumulating materialistic things.

The Republicans have often but to no avail offered up plans where the tax becomes flat meaning it is a lower rate for all but then there will be no loopholes or deductions.  Actually this will bring in more money to the treasury in the long run.  But the Democrats want something quick and flashy like an all you can eat buffet sign.  Pick whichever group it is popular to beat up on and tax them.  Tax them as much as you want, it’s all you can eat.  No concern for the long term health of the economy, no concern whether it will have immediate effect, just tax what you want because you want it.  Just like a buffet.  And when you’re done at the all you can tax buffet, gorge yourself and clogging the arteries the of the economy (yes I know this metaphor is running too long I’m almost done) you can go and put a couple hundred million on Solyndra at Roulette wheel.

It would be great if society started to think long term versus short term and what sounds nicer instead of what will work in the long run and be more just and equal in the long run.  I personally will support a VAT tax (and only a VAT, not a combination of VAT and income) as I have serious problems with income taxes due to penalization of success.

And let me add that all persons in the US can of their own volition give money to the treasury or even dedicate additional money to our national debt.  So if someone really believes they are not paying enough taxes then they could very easily write that check and the government will gladly accept it from you.  So I find it very hypocritical that so-called wealthy/millionaires want the government to pass a law to be able to by force take additional money from them but not want to willingly just give it away to the government.  Would it be that they know with their money they can afford the best tax accountants and attorneys in the world that will allow them to still pay less money then the amount the law states????

Please also do some research and you will find that everytime congress has added a tax for the “wealthy” they end up adding it downward as it really does not bring in the funds they want so by wanting someone else to pay up you actually end up making the middle class pay up.

So, logically you must come to the conclusion that all of this is political hype and nothing more!  And still no one wants to solve the actual underlying problem – SPENDING!!

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Filed under Budget, Capitalism, Congress, Conservative, Constitution, Debt, Economics, Election 2012, Evils of Liberalism, Government is corrupt, Government is useless, Obama, politics, Taxes

A Week of Obama Peddling Lies. Part II:He also peddles slavery

Okay so we have already dealt with the fact that this week, as with every other week of his existence, Obama has clearly shown he knows nothing (possibly less than nothing) about economics.  But that’s not the worst part.  If it was just his idiocy I might not feel my blood pressure jump to unhealthy levels every time I’ve heard him speak this last week.  No the reason I’m insulted by Obama’s words is not his economic ignorance, but because it is a perverted and near evil vision of human nature and government.

So let’s review what he said.

Deep breaths.  He’ll be gone in January.  Deep breaths.

“In the United States of America, we are greater together than we are on our own.  This country advances when we keep that basic American promise — if you work hard, you can do well enough to raise a family, own a home, send your kids to college, put a little away for retirement.  And it doesn’t matter who you are, where you come from, what you look like.  That’s what has created this extraordinary country of ours.  That’s what we’re fighting for. That’s the choice in this election.”

First off there is no promise of success in America.  There is no promise of success in life.  There is only a promise of the right to “pursue happiness.”  But he is right that it is the choice of this election: whether you will have the opportunity to live, work hard and live the American dream (Romney) or whether your liberty, opportunity, choice are all eliminated for a generation or longer (Obama).

And he is also right about us being greater together than when we are on our own.  When we join together out of friendship, out of love, out of mutual consent and benefit, human beings, not just Americans, although we have at times mastered the art, we can reach unprecedented heights of achievement and happiness.  But this is when it is by mutual consent.  Not when it is forced on them by dictatorial fiat.  When people are forced to work together because a higher authority says they have to then you will find in terms of personal happiness and societal prosperity it would have been better for everyone to be on their own.  We rise only when we work together by choice…and the key part is the choice not the working together.

“Their philosophy is simple:  You are on your own.  You’re on your own.  If you are out of work, can’t find a job, tough luck, you’re on your own.  You don’t have health care, — that’s your problem — you’re on your own.  If you’re born into poverty, lift yourself up with your own bootstraps even if you don’t have boots.  You’re on your own.  They believe that’s their — that’s how American has advanced.  That’s the cramped, narrow conception they have of liberty.  And they are wrong.  They are wrong.”

It’s not a philosophy; it’s a fact of life.  You are and always will be a victim or benefactor of your choices.  And your choices are your own.  If you can’t work, can’t find a job, did you get the education, experience and recommendation that would put you in a safe position or did you expect Obama to provide for you…because if you did the later, let me tell you you’re on your own because Obama and the government can and never will be a trustworthy fall back.  You don’t have health care?  Again did you do everything to get it or did you expect others to just subsidize your life…because if you just expected others to provide you with everything you want, you’re on your own.  We believe that America has advanced because of talent and skill and drive and friendship…and keep in mind friendship and companionship is a major portion of life…but in that too you’re on your own to make friends who will be there for you, they cannot just be provided by government fiat.  Ours is a philosophy of liberty.  Obama you claim that we have a “cramped, narrow conception [of] liberty.  And they are wrong.” No ours is philosophy of wide ranging liberty that comes with the downside of liberty, the possibility of failure.  But we have a strong belief that even in failure people can learn and grow and better themselves.  You would rather eliminate liberty, eliminate the possibility of failure and replace it with the at best the certainty of mediocrity (in reality the certainty of failure and misery for all in the long run) because you don’t believe people can better themselves, you don’t believe people can bring themselves up by their bootstraps, even if they don’t have any, then you don’t believe in human potential.  You don’t’ think that success or failure is, in the end a result of one’s choices and attitudes, which it is, you believe that we are victims of society, victims of the system, victims of those in power, your mantra is “I am not the master of my fate, the government is the captain of my soul.”  And you have the unmitigated gall to call us cramped and narrow.

“And we’ve got to make sure that we’ve got a tax system that is actually fair.  Part of that is something I call the Buffett Rule.  It’s very simple:  If you are making more than $1 million a year — I’m not saying you have $1 million, I’m saying you’re making $1 million every year — then you shouldn’t pay a lower rate than your secretary.  That’s a pretty simple proposition.”

I dealt with why this was a bad pragmatic plan last time. Let’s talk about the principled reasons why this is dumb.  “Fair.”  Let’s make the tax code fair.  Children, whiny, spoiled children whine about “fair”—adults talk about justice.  What is justice? Well the simplest definition would be that everyone gets what they deserve.  So is the tax code just?  Nope. There are far too many loopholes and deductions where the government quite unjustly tries to pick winners and losers, and the taxes are too high.  It’s a double injustice.  Now if you wanted to talk about justice instead of fairness you would get rid of the loopholes and lower the rates (although true justice would require that everyone pays at least something as everyone benefits from government protections of a military, police and court system).  Raising the rate on people because they’ve done well isn’t just, it’s punishing success (but liberals don’t believe money is made through skill and drive but because of corruption in despite of all knowledge of human nature and history).  But if you really wanted justice and not just a whine of fair you would support the Ryan Plan.  Hell, since, as Ryan has put out numerous times, it’s up the Ways and Means Committee to decide the future of loopholes…how about eliminating all deductions after $200,000…and reduce them for income after $100,000.  Republicans would support that. Because it’s just or at least more just than what we have now.  But raising rates isn’t just…it’s not even fair as you’re talking about raising rates on capital gains (money that derives from income which has already been taxed, and then invested in companies which also pay corporate taxes, so yes let’s tax it a third time…and if you buy anything with it we’ll slap some sales tax on that too…oh yeah that’s fair).  But please continue whining about fair.

Of course Obama then makes it seem that letting people keep their money is stealing from veterans, letting people freeze to death (“Or a family that’s struggling to get by maybe is getting less home heating oil assistance.”), old people’s healthcare…along with unconstitutional payments for student loans. As if taxing is the only option, rather than smart cuts, intelligent regulation, efficiency, reduction of waste, and turning programs over to the states.  No, Obama has only a vision of tax or no tax.  No other option is available because he isn’t even concerned with justice or fairness.

And then we get to the all important (read horrific) passage:

I hear politicians talking about values in an election year.  I hear a lot about that.  Let me tell you about values.  Hard work, personal responsibility — those are values.   But looking out for one another — that’s a value.  The idea that we’re all in this together — I am my brother’s keeper, I am my sister’s keeper — that’s a value.  The idea that we think about the next generation and we’re taking care of our planet — that’s a value.

By value I can only assume he means the complete lack of sane human values.  Let’s ignore the bizarre choice of paraphrasing a Biblical murderer (we could spend days talking about the odd choice of quotes, but a Pagan like me commenting on Biblical quotes is a little odd).  First off looking out for one another might be personal value but compassion being a beautiful thing between individuals does not mean that it should or even can be transferred to the government.  But it’s not even that, Obama’s disgusting vision is that we help those who want to lie around and do nothing but get paid and work to destroy everything we believe in (like his unwavering support for the teacher’s unions or the billion and one-half dollars he wants to give to the Muslim Brotherhood, which by any sane administration would be declared a terrorist organization).  But then of course he uses the quote “I am my brother’s keeper.”  Do you know what needs keepers?  Inanimate property, animals, and slaves.  I, and every person on this planet are human beings—with the exception of small children and those with serious mental problems we don’t need keepers.  Keepers are for slaves, to tell you what you can and cannot buy (which I believe the Obama administration said it has the right to do), to tell you when and where you can go (which the Obama administration tried to do through it’s rewrite of NDAA) and what you can and cannot see (which the Obama administration tried to do with SOPA).

The fact of the matter is that this is only Obama getting lazy and showing his true colors.  I’m sorry but in the context of every power grab this man has made I can’t just think that this is a poor choice of words.  This is a man who believes that he and his fellow government bureaucrats need to be our keepers and keep us in line.  This speech makes clear that his idea of liberty is straight out 1984 that “slavery is liberty” and that we will only be happy and productive little kept people when we are under his control.  Nothing he has said or done give me any reason to believe that I should give him the benefit of the doubt here.  When he says keeper he means it.  He means that he thinks that we need to sacrifice our lives and our liberties to take care of each other.  He views what most of us would consider the sickest of dystopias as his utopia.

I’m not going to call for anything here.  There’s no need.  If he and his team keep acting like they have done this past week, they will be powerless as of November and gone by January.  However, just because I don’t fear anything this man can do doesn’t change the fact that evil needs to be called what it is.  I know my blog won’t exactly convince anyone on the left, but for my readers, who probably don’t take as hard-line a view in their rhetoric, when you’re talking to people keep this evil in mind.  Keep in mind he is opposed to the basic concept of liberty at all levels, and while maybe with a little more finesse than I am demonstrating, point it out to the people you talk to.  The problem isn’t Obama, the problem is this belief that life is made better only through government and control.


Filed under Capitalism, Civil Liberties, Conservative, Constitution, Economics, Election 2012, Equality, Evils of Liberalism, Free Will, Government is corrupt, Government is useless, Happiness, Individualism, liberal arrogance, Long Term Thinking, Natural Rights, Obama, Patriotism, People Are Stupid, politics, Stupid liberal quote of the day, Taxes, Tyranny, Unions, Unjust legislation, Welfare