Once I realized that you could take all the money from the rich, stop all defense spending, and still have a massive budget problem? These sorts of things stopped being an issue for me.
Seriously folks, it's a red herring, an issue created to make sure that one party has something to fight the other party over. If you want to sack the rich, have at it. Just don't pretend that by taking that position you are doing anything at all for the national treasury. Or poor folks, for that matter.
In the larger picture, many technologists view the state as something of the past. Tens of thousands of people make their money simply because computers are hooked to each other over wires. It has very little to do with national budgets or policy (yes, you can throw out a bunch of silly nonsense about national broadband policies and such, but let's get real: this economic activity takes place in all sorts of various scenarios.)
So if you are the type to sit around pining away your day, thinking about all those super-rich folks and how good they have it, I'm sure this will be a fun article for you. If, however, you are concerned with public policy -- and the fact that in the US, at least, the majority of people do not even pay an income tax, yet vote on the rates for the rich minorities (gee, wonder how that will turn out?) then this is all so much posturing.
I don't feel a need to slam Buffett. He's a patriotic citizen who means well. Smarter guy than me in a lot of areas. I'm just not sure that this article has anywhere near enough merit to have 500+ points on HN. It offers no solutions, only rehashed populist tripe. If you want to set the income tax at 95% of all money made over a million bucks? Have at it. It's not important.
I would appeal to simple reasoning: everybody has known that the U.S. is on an unsustainable spending curve due to entitlements for the last decade or more. The only thing that changes is how politicians choose to spin it from year to year. If you create a system where politicians get elected promising to spend money that doesn't exist, then such a system will outgrow any amount of revenue you can throw at it. If you somehow changed the rates right now and squeezed enough out of the economy to make it all balance? Ten years from now some new bunch of guys will be running on a platform to provide SUVs in every driveway or something equivalently intellectually sexy and emotionally attractive. It's simply too enticing not to.
But you asked for something solid, so here's the result of some random Googling. Note that it's a little unfair for this author to use the current year's deficit in this calculation, but then again with growth rates where they are it's only a decade or so until such spending will be commonplace even in a frugal environment.
There are about 400 billionaires with a total net worth of around $1.3 Trillion.
Seriously, this entire discussion all boils down to how honest you can be about how the system is broken, not which party is to blame, how much the rich should pay, whether or not we need more or less government, or any of that. All of that nonsense is just bullshit to keep you coming out to vote.
I'd also point you to a graph of total debt as a percentage of GDP. http://www.usgovernmentspending.com/federal_debt_chart.html Even if you argue that the last year or two is somehow "special" (A common theme when its your guys spending the money) It's plainly clear that the trajectory leads to default in a very short amount of time.
'everybody has known that the U.S. is on an unsustainable spending curve due to entitlements'
I wouldn't agree with that. I would say that the problem is fighting two un-funded wars coupled with a decrease in revenues caused by the Bush Tax Cuts. Long term we have issues with popular entitlements such as SS and Medicare. But our immediate problems are generally due to the drop in revenues from the Bush era and an massive increase in military spending.
The entire net worth (not income) of all billionaires in the United States may be about $1.3 trillion[1]. Therefore, if you took all of the money currently held from all U.S. billionaires, you would decrease the national debt by about 10%, or cover the deficit for just one year. A high (say, 90%) income tax rate would presumably bring in even less.
Yes. Also note that the super rich, as Buffett points out, make money by investing, not by regular income. The purpose and art of investing is to place money in the best spot. So if you took all the money they had, you'd be a trillion or two ahead, a huge amount of investing would stop, and there would be no more money from them in the pipeline. If, instead of sacking wealth you stuck with income only (perhaps with progressive rates), somebody would simply do the math and put the funds in tax-free bonds or something.
Money, especially money of this scale, works for people. It will find the best spot to stay untouched and continue to work. You don't pay an accounting firm and tax lawyers in the six or seven figures for nothing. In fact, many argue that the way you get rich is to be a better steward of money than the other guy. If you took 100 people, gave them each a million bucks, in a year only one of them would probably have kept it and increased it. Odds are that was the guy who was already rich to start with -- who already had good habits and wise spending strategies.
I mean honestly, there's a wee bit of irrationality in Buffett's position. You don't get wealthy by putting your money in places where it disappears, so why would somebody who was super frugal and managed to plan where each and every penny went leave his money in a spot were it would decrease drastically if he didn't have to? Buffett's going to haggle and fight tooth and nail over some small sub-percentage points on a huge acquisition and then not manage his own money so that it works optimally? Huh?
Ah, the poor little rich minorities. We've simply got to protect them from everything. They "create jobs" or something, after all.
Though, that's actually wrong, too. 98% of small business tax filers earn less than US$250,000 a year, yet account for 64% of the job creation (or "net new jobs") in the last 15 years and employ over half of the working US population [1].
I'm sorry, but the rich are not bothering with a <$250k a year business if they're already rich, unless they're serial entrepreneur, hyper-multitaskers juggling multitudes of them at once. And, aside from Elon Musk, how many do you know that are willing to do that?
This whole mess is the placation of the rich because they'll "move" if we don't give them everything. The question is, what country would they move to? I mean, I'm sure Singapore is nice and all; but it's hot as hell there, and don't they have Universal Healthcare with government-mandated price controls, which is supposedly every rich man's nightmare according to Fox News?
Russia is nice, too, I suppose. If and only if you're former politburo or an officer, or just a jackbooted mafioso thug (or willing to take any or all of those on without Uncle Sam backing you up).
Hong Kong is part of a communist country that only recently has conveniently added capitalism to their repertoire. If that doesn't work out for them, how soon would they "nationalize" all of that island and it's hard-won successes contained therein?
Of course, others have noted Somalia, Mexico, and various developing countries. Take your pick.
"If you want to set the income tax at 95% of all money made over a million bucks? Have at it. It's not important."
If it's not important, why all the falsities about "taking everything from the rich" and stopping all defense spending and it not mattering? It would matter a shitload, no offense. DoD + discretionary spending (which the military swallows almost all of) is almost 40% of the entire budget.
What's left is Medicare and SS, which in 2000 was well-funded and flush with +2 Trillion in the kitty. The tax breaks of 2001 and 2003 and the wars of roughly the same time erased nearly all that and left IOUs. Now, you're blaming those programs for our downfall.
So, yeah, you're right, it's not about taxes, it's about those "poor people" who "do not even pay an income tax".
Seriously folks, it's a red herring, an issue created to make sure that one party has something to fight the other party over. If you want to sack the rich, have at it. Just don't pretend that by taking that position you are doing anything at all for the national treasury. Or poor folks, for that matter.
In the larger picture, many technologists view the state as something of the past. Tens of thousands of people make their money simply because computers are hooked to each other over wires. It has very little to do with national budgets or policy (yes, you can throw out a bunch of silly nonsense about national broadband policies and such, but let's get real: this economic activity takes place in all sorts of various scenarios.)
So if you are the type to sit around pining away your day, thinking about all those super-rich folks and how good they have it, I'm sure this will be a fun article for you. If, however, you are concerned with public policy -- and the fact that in the US, at least, the majority of people do not even pay an income tax, yet vote on the rates for the rich minorities (gee, wonder how that will turn out?) then this is all so much posturing.
I don't feel a need to slam Buffett. He's a patriotic citizen who means well. Smarter guy than me in a lot of areas. I'm just not sure that this article has anywhere near enough merit to have 500+ points on HN. It offers no solutions, only rehashed populist tripe. If you want to set the income tax at 95% of all money made over a million bucks? Have at it. It's not important.