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Buffett’s Proposed Tax Hikes Would Provide Insignificant Rev

hypocritexposer

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August 19, 2011
Warren Buffett’s Proposed Tax Hikes Would Provide Insignificant Revenue

by David S. Logan

Warren Buffett's recent call to increase taxes on the super- and mega-rich has garnered much media attention. But how much money could such increases actually raise? What effect could they have on reducing the nation's deficit or debt? As it turns out, not much. Below is a quick look at the latest IRS data on earners making more than $100,000:




Mr. Buffett specifically called to raise tax rates on Americans making more than $1 million and proposed an additional increase on taxpayers whose income exceeds $10 million. Suppose Mr. Buffett got his wish and loopholes and deductions were eliminated, making it possible to tax the "super-rich" (those earning $1M - $10M per year) at an effective rate of 50%. The following table shows the effect that such a historic hike on effective rates would have on the deficit and debt:





In addition, Mr. Buffett wanted those making more than $10 million per year to pay even more. The table below exhibits the effect of imposing a 100% effective rate on these individuals:





So taking half of the yearly income from every person making between one and ten million dollars would only decrease the nation's debt by 1%. Even taking every last penny from every individual making more than $10 million per year would only reduce the nation's deficit by 12 percent and the debt by 2 percent. There's simply not enough wealth in the community of the rich to erase this country's problems by waving some magic tax wand.

Finally, to put everything in perspective, think about what would need to be done to erase the federal deficit this year: After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion. It may be economically ruinous, but at least this proposal would actually solve the problem.

http://www.taxfoundation.org/blog/show/27547.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TaxPolicyBlog+%28Tax+Foundation+-+Tax+Foundation%27s+%22Tax+Policy+Blog%22%29
 

Tex

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So according to these figures, and they do come from what looks like a suspect tax partisan group, and you come up with about 300 billion per year in additional taxes from the 1 million and up category.

Since Ben Stein offered his argument on taxing the rich more, that would have been over 1.5 trillion dollars more (maybe more maybe less depending on the economy in those years-- I am sure that Logan cherrypicked his data year) in govt. revenue over those years. This is a significant amount of money these guys have been able to take home.

I would bet you that they would be working overtime to make sure Congress started spending less so they would have to pay less in taxes to support the spendy government. Just a milkshake bet, but I am not worried about those odds at all.

I have never said that only taxing is the answer. It never will be. Taxing is part of the answer and makes the real solution happen--- make Congress stop using the public purse to make winners and losers in the economy while piling up the debt on our children in the form of deficits.


There will be another article in response to Logan's numbers used and possibly loopholes and other things. I don't feel the need to protect millionaires and billionaire's income stream while the country is doing so poorly. They use much of their money to buy the kind of policies that get us in these messes from politicians who are corrupt or don't know any better.

Tex
 

hypocritexposer

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Tex said:
So according to these figures, and they do come from what looks like a suspect tax partisan group.....



Tex


Source: IRS data, http://www.irs.gov/taxstats/indtaxstats/article/0,,id=98123,00.html, table 1.2.


edited to add: It does not look like you can link directly to the IRS site, without it directing you to a general page. I've tried to link to a couple of sites already and the same re-direction page pops up.
 

hopalong

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Yep Tex is right a suspect tax partisan group alright!!!! :wink: :roll: :roll:
 

hypocritexposer

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This link works in the article, let's try it here

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html
 

Tex

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hypocritexposer said:
This link works in the article, let's try it here

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

There are multiple years on that IRS page so which one is he talking about? If he is talking about all that are on the IRS page, he would have to add all the years together to see how much taxes would have been garnished during those years.

You would also have to close the kind of tax write offs that pay the author for this work in making his argument. It is a non profit so I assume that whoever is paying his salary is taking a write off. Get rid of those kind of propaganda write offs and you would have more money to tax.

To your point that we can't solve an imbalance in our budgets by taxing alone, I agree. No one should think that anymore than we should think we can finance our government with foreign debt. It has been part of the reason the U.S. economy hasn't done so well-- we are allowing our policy makers to sell bits of our economy to foreigners in return for them buying politician's overspending. Ben Stein had that one correct.

Hypo, do you know how much coal we shipped to China last year while we have an environmental policy of reducing coal use because of its pollution index? Do you really think the Chinese are not sending it right up the smokestack and back toward us? Who comes up with policies like this to happen? We have the worst policies I have seen in my life coming out of D.C.

Tex
 

hypocritexposer

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Tex said:
hypocritexposer said:
This link works in the article, let's try it here

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

There are multiple years on that IRS page so which one is he talking about? If he is talking about all that are on the IRS page, he would have to add all the years together to see how much taxes would have been garnished during those years.

Tex

2009
 

Tex

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hypocritexposer said:
Tex said:
hypocritexposer said:
This link works in the article, let's try it here

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

There are multiple years on that IRS page so which one is he talking about? If he is talking about all that are on the IRS page, he would have to add all the years together to see how much taxes would have been garnished during those years.

Tex

2009

Thanks.

Since we need to look at the over all effects of the Bush tax cuts, we need to see how much money they took from the treasury during all those years that ended up being borrowed.

Do you think you can do that, hypo since you are so persuaded by this guy?

By the way, if 300 billion a year for 2009 isn't that much, why are the rich hiring someone like Logan to write articles like this? It isn't so much, or is it? Maybe he makes a good point that it isn't so much to have a policy that gives opportunities to others in the economy instead of those who have all the wealth already. The wealthy can take a trip abroad and help some other country's tourism economy and jump start the global economy. I wouldn't be too worried about their lost production. The demand is what drives business and it can be taken up by the thousands of other individuals in the economy.

I think this guy is on to something.

Tex
 

hypocritexposer

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Tex said:
hypocritexposer said:
Tex said:
There are multiple years on that IRS page so which one is he talking about? If he is talking about all that are on the IRS page, he would have to add all the years together to see how much taxes would have been garnished during those years.

Tex

2009

Thanks.

Since we need to look at the over all effects of the Bush tax cuts, we need to see how much money they took from the treasury during all those years that ended up being borrowed.


Tex


IMO, it would be impossible to figure out what those tax cuts "cost" the Treasury.


Too many variables that are dependent on those same tax cuts.

How many jobs were saved or created, after 911, due to those tax cuts?

What did those jobs that were saved or create bring in, in tax revenue?

How has the recession affected the income of those taxpayers?


etc.
 
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