Skip to comments.Former American Express CEO, HARVEY GOLUB: Here's What Buffett And Obama Don't Get About Taxes
Posted on 08/22/2011 1:01:37 PM PDT by SeekAndFind
Former American Express CEO Harvey Golub gives a major rebuttal to calls from Warren Buffett and Barack Obama for more taxes on the rich.
Writing in the WSJ, Golub makes three points.
First, it is absurd that half of the country pays no income taxes.
Second, "the extraordinarily complex tax code is replete with favors to various interest groups and industries."
Third, the government is bloated by wasteful spending.
Until someone addresses these issues, he says he pays enough:
Over the years, I have paid a significant portion of my income to the various federal, state and local jurisdictions in which I have lived, and I deeply resent that President Obama has decided that I don't need all the money I've not paid in taxes over the years, or that I should leave less for my children and grandchildren and give more to him to spend as he thinks fit. I also resent that Warren Buffett and others who have created massive wealth for themselves think I'm "coddled" because they believe they should pay more in taxes.
I certainly don't feel "coddled" because these various governments have not imposed a higher income tax. After all, I did earn it.
(Excerpt) Read more at businessinsider.com ...
Harvey did a great job running Amex. Ken Chenault, on the other hand, has wiped out all of the advances made during Harvey’s tenure.
Atta boy, Luther...er...Harvey!
He then goes on to claim he pays 80-90% in taxes.
top federal bracket 35%. top state tax bracket 11% (in HI and OR) HI has sales tax rate of 4%, OR has no sales tax.
Taxes = 50% in HI (if all of the income was spent, which it can’t be since 46% evaporated into taxes)
The 80 - 90 estimate blows his credibility.
If he's paying that much another 10 or 20% wouldn't hurt him...
He also mentions estate tax. I assume he is estimating a pro rata share of his estate tax, eventually to be paid, against his current income.
“The 80 - 90 estimate blows his credibility.”
Maybe he smokes a lot of cigarettes :)
The other fact, If all the millionaires and billionaires
in the country were forced to pay 50% more in taxes, it still wouldn’t be enough to pay the National Debt!
Indirectly he raises a good point. If we look at the wealthy as being a source of funds and that source is over their lifetime then we should look at the combined income from both income tax and estate tax.
If we do that then to the extent we take more income tax away we will end up with less estate tax. Or in the reverse, the more we let them keep the more we get at death.
If our cost of borrowed funds is 5% but the wealthy guy can increase his net worth by greater than 5% per year then the smart investment would be to keep his income tax low. We would get more money in total. And by waiting our cost of 5% would likely be far less than the increases in his net worth.
Another way of looking at this is when we increase the income tax on the wealthy we are just borrowing against our future revenue (death tax) at a very high cost and we haven’t decreased our real debt. All we did is accelerate income that we would get eventually.
Bingo. He's including projected federal and state estate taxes (which amount to DOUBLE taxation, by the way) to get to that total, which is perfectly legitimate.
Here’s my old, worn out, yet fair and practical suggestion: 6% on every dollar of income, personal and corporate.
When I was living in Oregon, in 1992, I was paying 58% of my income in taxes. My monthly salary was $3100.
Those taxes included ALL taxes - gasoline taxes, taxes & fees on my telephone, taxes & usage fees paid on water & sewer bill, property taxes - when I added them all up, it was 58% of my income!
It is far worse in other states. I can believe that there are places in the U.S. where a person is taxed at 80-90%.
I now live in Washington State, and you wouldn’t believe the usage fees on my water meter & sewer bill. Incredible!
Gosh! I see some I missed adding up back in 1992.
Good lord...Warren Buffett’s stance is about good public relations (PR)!
Jack Welsh of GE was well known for brutally culling poor managers, that is, doing his job well by firing people. Upon retirement he did the talk show circuit, he was inevitably asked “what really made a difference for you?” His answer on every occasion was “mentoring”. => good PR!
Buffett reads the news, do you really think he wants his Lincoln stop by a barricade of burning tires in Detroit manned by the Obama youth...???
Just imagine what everything would cost without all the taxes. A loaf of bread contains all the taxes paid by all the employees and suppliers involved in getting it to the store, plus the store itself.
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