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December 12, 2012

Comments

Such hypocrites, I work in finance and know that these mega billionaires have already the majority of their worth diverted into tax sheltered vehicles so any "increase" won't hurt them. The only 1% that is going to get hurt are the small business owners and those who make $100,000 - 1 million who are the closest competitors of these billionaires.

If Mr. Buffet and Mr. Jobs wanted to pay more taxes then nothing is stopping them to do it individually when filing annual tax returns.

There are no limits to paying income taxes to the IRS.

I would be curious to see how many of these CEOs actually opposed higher taxes in the first place.

Also, for the ten millionth time, any increase in taxes will hit the middle class the worst, no matter what.

And, also, for the ten millionth time, rich people do not want their taxes raised. They want OTHER rich people's taxes raised.

Liberal rich people feel that conservative rich people do not deserve to be rich, and thus must pay higher taxes.

Lexus Liberal says
"If Mr. Buffet and Mr. Jobs wanted to pay more taxes then nothing is stopping them to do it individually when filing annual tax returns."

Steve Jobs famously declared an income of only $1
Mr. Buffet has an official income of only $100,000
The bulk of their compensation comes from capital gains NOT "income".
If these rich Liberals were truly sincere about wanting to pay more taxes they would not resort to such blatant finacial engineering schemes to minimize their taxes.

Of course the average person at Walmart and Safeway doesn't know what capital gains taxes is. There's only maybe 1 out of every 4 people who know the difference between income and capital gains taxes. The elite class has no fear of the rest of society figuring anything out.

[HS: Capital gains ARE income, it's just income on which Congress has decided people should pay a lower rate. Capital gains rates are going to increase if the "Bush tax cuts" expire, and there's also an increase in Obamacare.

Half Sigma believes that rich people should pay the same rate for capital gains as ordinary income, but that people making less than $200K if individuals should get a break.]

Eliminate the deduction for state and local taxes, and limit the mortgage interest deduction to the first $250,000 on the first mortgage.

That will raise the $1.6 Billion Obama wants to raise.

[HS: This is a good idea and will raise a lot more revenue than a mere $1.6 billion.]

@Lexus Liberal: you're totally right, obviously we should just have a voluntary tax system where everyone just pays what they individually think is right for them. Everyone knows that having every individual in a group act in their own self interest will result in the best possible outcome for that group, right?

A tax increase on the $250+k crowd hits A LOT of doctors and dentists. They'll pass that on to insurance companies, medicare/medicaid, and cash customers...But if Obama voters want higher taxes I say let's give it to them good and hard.
Top 10 highest taxing states all voted for Obama, so eliminate the state and local deduction. Then don't allow mortgage interest deductions for multiple home owners, and cap them for single home owners. Raise the 35% rate to 39.6% for $500+k.

>>HS: Capital gains ARE income, it's just income on which Congress has decided people should pay a lower rate. Capital gains rates are going to increase if the "Bush tax cuts" expire, and there's also an increase in Obamacare.

If the Bush tax cuts expire will that do away with the carried interest provisions that hedge funders and private equity managers use to shelter their income under the guise of capital gains? I sure hope so. If that is the case, let'em expire.

[HS: Unfortunately the carried interest loophole, as well as the CEO-gets-paid-in-options loophole, won't go away.]

Eliminate the mortgage interest deduction entirely. It's time these parasites stopped riding on the backs of renters.

"Eliminate the deduction for state and local taxes, and limit the mortgage interest deduction to the first $250,000 on the first mortgage.

That will raise the $1.6 Billion Obama wants to raise."


Actually it could raise a good deal more. I did some googling and saw estimates from 40 billion to 80 billion a year (not over 10 years like the ridiculous fiscal cliff talks), depending on how much of he deduction is left for lower income folks.

Sure it impacts the blue staters, but hey, they are the ones who want high taxes in the first place.

I love how $200k is such a safe figure for people to throw around. Sure, tax the guy making $200,001 the same as the guy making $2,000,001--that sounds reasonable. And of course $1 in NYC is equal to $1 in Jackson, MS. Did it ever occur to anyone that someone making $200k in one year doesn't necessarily mean that person is going to make that same amount the following year--that they might actually make less? When did making $200k become a permanent trait, like eye color or something?

As for capital gains, that dollar has already been taxed multiple times--once as regular income, twice during corporate profits, and yet again when sale of a stock is made. Same goes for dividends.

Taxation for purposes of redistribution is slavery and theft.

There's a difference between wanting to pay higher taxes and recognizing that they will be paying even higher taxes post fiscal cliff, and knowing that Obama and the Democrats have won this battle.

I would call this negotiated surrender, hoping to get a few extra tax loopholes when the inevitable tax hikes come in.

Related: "Obama Adviser, GE CEO Immelt: China’s Communism Works Just Fine" http://pjmedia.com/tatler/2012/12/12/obama-adviser-ge-ceo-immelt-chinas-communism-works-just-fine/

Capital gains could be a return on investment, or it could simply be paying a tax on inflation. The best would be a simple sales tax for stock, on the total price rather than the increase in price.

I've never really understood the popular support for 'no taxes on the rich'. I get why the guys making millions think it's a horrible idea, but why would the vast majority of us who would be beyond thrilled to hit even 200,000k a year get worked up at all about the tax rate on 500k+ of income. I see a economic point that it's better not to completely soak that level of income, but nobody's talking about that. A marginal rate of 40% wouldn't do much at all- maybe the old 91% marginal rates were a bad idea, but even when they were there it's not like the country was an economic wasteland. Maybe somebody here can explain why that would be worrying in the slightest.


Another fundamental question is why it seems so hard to keep 2 ideas in the electorate's head at the same time: 1. government is essential to regulate and manage the economy and 2. government is prone to screw up so we need to constantly refine policy to make it more effective. You can already see the comments here starting to divide into 'screw those rich guys' and 'get the government out'. There's a level of taxes and policy that doesn't cause people to stop working and helps keep a more balanced society. Let's figure out what that is ie don't raise taxes just to raise them, make it part of a plan to correct the kinds of trends we don't like seeing.


@S_McCoy

Wouldn't the rentier class's mortgage related tax deduction allow them to set a more competitive price to the renters (aka they are not parasitic if they want to be competitive).

@chucho: You're wrong about the tax bracket starting at 200k it starts at 250K. Also, someone making 250,001 is taxed at a very different effective tax rate than someone making 2,000,001 because money is taxed marginally. You should look that up and try to understand it.

Secondly, if you want to vary taxes by local cost of living than that should be your argument. There is absolutely no reason to lower taxes across the board because NYC happens to cost a lot. Theres also no reason to tax someone differently on money they are never going to spend because they live in an area with a high cost of living.


Thirdly, if you want to avoid double taxation than you should vary an individuals capital gains tax based on the actual amount of taxes paid by the company over the course of the investment or in a given fiscal year for dividends. Why give the same lowered capital gains tax rate to both a stock investment in a company that never paid taxes during the person's ownership and one that paid a high rate over an extended period of ownership? This isnt even getting into all the other investments where individuals are taxed at capital gains rates but are themselves taxed totally differently or not at all, such as real estate, country-club memberships, security options, etc.


If theres something wrong with a tax in a specific case the solution should be tailored to that case. Its bullshit to use specific and limited cases, which in the above examples shouldnt even be given specific exemptions (In my opinion anyway), to justify give aways to the wealthy.

You sound a lot like 'Joe the plumber' who it turned out didnt have a plumbers license, made $40,000 a year, but was still convinced he was on track to make $250,000+ a year and thought lowering his "future" tax rates was some kind of reasonable priority.

Eliminate corporate tax and tax all dividends, cap gains and salaries equally. Would get companies out of doing ultra complex transactions to avoid taxes.

halfsigma, you seem very bitter about people making more money and want them to pay more taxes.

To me it feels immoral for Obama to make it ok for people to ask other people to pay higher taxes, especially since those other people (top 1%) already pay the majority of the income tax.

As Half Sigma would say, "Ann Coulter must be reading my blog": http://www.anncoulter.com/columns/2012-12-12.html

DSGNTD_PLYR,

Doctor and dentist do not pass on costs to anyone. They are price takers from the insurance companies. Do you really believe that an individual physicians can approach Medicare than request a higher reinbursement rate for a certain procedure?

Superdestroyer,

Docs have other ways of passing on costs to insurers and patients. Here's one example: I have a doc who told me last summer that people in my situation should see him 3x per year. Seemed a little much, but OK, I thought. Saw him again recently, post election. Now he says the standard is 4x per year. That's a convenient way of upping his revenues from office visits by a third.

"Eliminate the deduction for state and local taxes, and limit the mortgage interest deduction to the first $250,000 on the first mortgage.

That will raise the $1.6 Billion Obama wants to raise.

[HS: This is a good idea and will raise a lot more revenue than a mere $1.6 billion.]"

Are you guys completely insane? You do this and middle class people will start losing their homes in droves. Deductions for this group are massive.

There is no taxing the rich. There is no tax system that would simply impose taxes on a certain income group. Rich people control governments. They do not gain that control for the purpose of raising taxes on themselves.

We've been listening to Republicans talk about not raising taxes on anyone and Democrats only raising taxes on "the rich." In that same time period, did the middle class never experience any tax increases?


"Are you guys completely insane? You do this and middle class people will start losing their homes in droves. Deductions for this group are massive."

And yet the Canadian home ownership rate, where mortgage interest is not a tax-deductible expense, is 68% compared to the American rate of 67%, according to the AEI.

No, home owners won't be losing their homes in droves, rather they'll be rebalancing their spending elsewhere in their budgets.

Taxes distort investments and this deduction favors real estate investment, buying a larger house due to increased purchasing power via tax deduction, over other forms of investment.

I'd rather see market distortions removed than kept in place.

@TangoMan: In the US there are loads of people right on the edge of losing their homes. I dont know the number but it is certainly plausible that removing the deduction would result in a very large number of people losing their homes. The fact that Canada has higher home ownership rate says something about what is possible (although not necessarily possible for the US) but nothing about the immediate effects of such a policy in this country.

Reminds me of the pro new urbanism mixed-use mixed-income high-density transit-oriented development NIMBYs who scream loudly for such development to be built and scream loudly when such development is to be built in their sprawly socio-economically homogeneous enclave. Or any sort of NIMBY who only wants certain types of development elsewhere for other people.

TangoMan -

"And yet the Canadian home ownership rate, where mortgage interest is not a tax-deductible expense, is 68% compared to the American rate of 67%, according to the AEI."

We're not talking about the homeownership rate. Deductions on mortgages and state and local taxes have been factored into real estate prices, loan approvals, interest rates, and every other factor affecting mortgages. These costs will skyrocket for homeowners if these deductions were removed. The result is they would not have the cash flow to cover their mortgage costs and they would lose their houses.

You renters will also be shafted as landlords jack uop your rent after your lease expires.

Nobody should be making this mistake. It is simple math.

For those interested, city-data.org provides information on average deductions per zip code. Check out the areas of the country that have average median incomes but high real estate prices, like blue state areas. You'd be shocked how dependent they are on deductions.

@superdestroyer, "AMA wants higher Medicare payments: Doctors' group hones lobbying priorities at annual meeting as it awaits ruling on health care law" http://articles.chicagotribune.com/2012-06-17/news/ct-met-ama-0617-20120617_1_new-medicare-patients-health-care-law-ama-delegate

Hospitals bargain with insurance companies all the time. Hell Blue Cross/Blue Shield of CA is mulling a 20% premium increase because they'll have to take on more poor people:
"The company also expects higher costs from an influx of new customers under the federal healthcare law in 2014.
'It's a once-in-a-lifetime change in the healthcare market that will bring a lot of volatility, and we need higher reserves for that,' Wagner said.
"Even with these proposed rate increases, Blue Shield said, it expects to lose money in the individual insurance market in 2013.
The insurer said its medical costs for this segment of the business grew 10.6% and what it actually pays is rising 12.5% after adjusting for its portion after customer deductibles."
http://articles.latimes.com/2012/dec/13/business/la-fi-blue-shield-rates-20121213

"these costs will skyrocket for homeowners if these deductions were removed."

Then Congress had better pass a law which makes it illegal to raise interest rates higher than current rates for a higher rate will also impose costs on homeowners.

Funny thing though is that most people have enough slack in their budgets to accommodate interest rate variability, so if they can reapportion their home budgets to accommodate higher interest rates then they can also reapportion their home budgets to accommodate the loss of the deduction.

Keeping an irrational policy in place because some few people on the margin do not have sufficient slack in their budgets to adjust to the new policy is nonsensical. We don't have a static interest rate to prevent those same people on the margin from not ever having to face higher interest costs and we accept that some people living out on the margin will have to sell their homes when interest rates rise.

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