Posted on 08/19/2011 3:17:05 PM PDT by SeekAndFind
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:
|
(Figures in $Thousands) |
||
|
Adjusted Gross Income |
Income Tax Paid |
After-Tax Income (What's left) |
$100,000 under $200,000 |
$1,801,446,897 |
$212,290,589 |
$1,589,156,308 |
$200,000 under $500,000 |
$905,347,402 |
$176,322,148 |
$729,025,254 |
$500,000 under $1,000,000 |
$332,037,478 |
$80,458,185 |
$251,579,293 |
$1,000,000 under $1,500,000 |
$130,149,237 |
$32,755,871 |
$97,393,366 |
$1,500,000 under $2,000,000 |
$76,148,200 |
$19,393,235 |
$56,754,965 |
$2,000,000 under $5,000,000 |
$182,986,391 |
$46,943,489 |
$136,042,902 |
$5,000,000 under $10,000,000 |
$97,493,167 |
$24,617,005 |
$72,876,162 |
$10,000,000 or more |
$240,133,885 |
$53,790,072 |
$186,343,813 |
Source: IRS data, http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html, table 1.2.
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:
Taxing the "Super-Rich" (Annual Income of $1 to $10 Million) at an Effective Rate of 50% (dollar amounts in $Thousands) |
||||
Current Taxes Paid |
Taxes Paid at New 50% Rate |
Revenue Gained |
Reduction of Deficit |
Reduction of Debt |
$124,709,600 |
$243,388,498 |
$119,678,898 |
8% |
1% |
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:
Taxing the "Mega-Rich" (Annual Income over $10 Million) at an Effective Rate of 100% (dollar amounts in $Thousands) |
||||
Current Taxes Paid |
Taxes Paid at New 100% rate |
Revenue Gained |
Reduction of Deficit |
Reduction of Debt |
$53,790,072 |
$240,133,885 |
$186,343,813 |
12% |
2% |
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.
The point is DumBO can spend billions in campaign ads that he kept his promise to tax the rich.
Higher tax rates on wealthy people cause them to seek ways to legally minimize the tax they owe. Berkshire-Hathaway sells financial products which do just that.
I heard a guy on the radio today say that if they raised the income of everyone making ten million or more by 187%, it would pay the Chinese for 39 days.
A different take on Buffet’s “hot air” about taxes....
From: http://plancksconstant.org/
All the years Warren Buffett was making billions he said nothing about the rich paying more in taxes. Now he’s singing a different tune. The extra taxes he proposes would not affect his wealth, only his new income, but it certainly would keep millions of others from their full potential and from possibly knocking him off the top 3 list of the richest men in America.
If Warren Buffett were an honest, decent person, he would take his own advice and write a check for 35% of his income to the US Treasury. But Warren Buffett is a low-life, greedy, chiseling scumbag that wants new rules for everyone else after he played the game and won. This is like Babe Ruth, after hitting 714 home runs, telling the Baseball Commission that 415 feet is too short for a home run, it should be made 830 feet.
Warren, if you think the rich should pay more then write the effin’ check and shut up - leave us out of your self-serving opinions.
Of course, there are also benefits of public image, which can become a concern for the uber-wealthy. When the public at large is experiencing economic pain, the wealthy tend to become scapegoats. Lawmakers are responsive to public outcries, so it definitely pays for the wealthy to proactively manage their political relationships and stances to mutually benefit both the politicians and themselves. It’s quite a neat trick for them to avoid public anger (wealthy and politicians), successfully convincing enough of Leona’s “little people” that they are “on their side”, all the while further enriching the wealthy and simultaneously ensuring the re-election of the very politicians who keep the game going.
If you provide services as a lawyer, accountant, appraiser, financial advisor, or banker serving the uber-rich, the chant to raise taxes is good for your consulting business.
The point: Symbolism over substance.
Bflr.
Confirms what I already knew. The upper middle class and middle class pay the lions share of taxes and would have to be taxed a lot more to close the deficit.
The total of Individual Income Tax collected for 2011:
$956 billion,
paid on about 90 million tax returns (the return count is from 2010).
The deficit for 2011 was
$1,645.3 billion.
The total Individual Income Tax collected could have been double what is was, and it still would have been over half a trillion short of closing the deficit.
Thanks to corporate America - in 2011 the total Corporate Income Tax collected:
$198.4 billion.
Feelings, nothing more than feelings...
Buffet wants to crush his competition.
The point is to inflame passions through class warfare. Isn’t that the goal of all communism?
Warren Buffet makes his money through Capital Gains not Income.
So he should advocate for eliminating the Income Tax and instead push to tax Capital Gains at 100%.
Then we would be taxing the rich.
bump
I can’t wait until we are all equally poor. Thanks socialism!
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