A proposal to satisfy Warren Buffett and raise his taxes

I’m tired of hearing Warren Buffett complain about not paying enough in taxes.

I propose a 10% property tax on all Americans with personal wealth in excess of $40 billion. This should bring the government about $10.5 billion in new revenue; $4.4 billion from Warren Buffett and $6.1 billion from Bill Gates.

What say you Mr. Buffett? Willing to put your money where your mouth is?

Obama’s Plan for Automatic Tax Increases (via Conservatives on Fire)

Must read information from Conservatives on Fire. We can’t let the neo-liberals continue their tax and spend policies.

Did you know that Obama had a plan to increase taxes automatically? I didn’t know about Obama’s plan. Apparently the MSM doesn’t know or doesn’t care. Worst of all, it would seem that our Republican’s in Washington are also unaware of Obama’s plan and that makes me FURIOUS! Yesterday I received an E-mail from my friend Pat Slattery of The Free Market Project. Here is how Pat’s message began: We’ve got the bastard now!  James Howe pointed Obama’s … Read More

via Conservatives on Fire

Windfall profit tax on ex-government officials

For the second time in three days, Glenn Reynolds of Instapundit mentioned the idea of a “50% surtax on the earnings of former government officials.”

On April 10, 2011:

SO OBAMA’S PEOPLE ARE TALKING TAX INCREASES AGAIN. Here’s my proposal: A 50% surtax on anything earned within five years after leaving the federal government, above whatever the federal salary was. Leave a $150K job at the White House, take a $1M job with Goldman, Sachs, pay a $425K surtax. Some House Republican should add this to a bill and watch the Dems react.

Then on April 12, 2011:

FORGET JOHN GALT, WHO IS PETER ORSZAG? Peter Suderman writes: “Here’s my answer to the question: He’s a pretty-boy pencil pusher whose business, as the top budget brainiac in the administration, was to mislead the public about the budget. . . . Ultimately, it doesn’t really matter what Orzag is doing for Citibank. His primarily job duties are intangible. Mostly it seems he’s there to cast his sexy geek-boy light on the institution and serve as a conduit to Washington’s power centers.”

Seems like another good argument for my 50% surtax on the earnings of former government officials. After all, at least half of Orszag’s value to Citibank comes from his prior government service. Why shouldn’t the taxpayers claw some of that back? Shared sacrifice, dude. . . .

While I almost always oppose taxes, I might be able to get behind this one. However, I don’t like the idea of a surtax. I think it should be called a windfall profit tax.

Taxing the rich to death hurts everybody involved

Robert Price writes in The Wall Street Journal about The Price of Taxing the Rich:

Nearly half of California’s income taxes before the recession came from the top 1% of earners: households that took in more than $490,000 a year. High earners, it turns out, have especially volatile incomes—their earnings fell by more than twice as much as the rest of the population’s during the recession. When they crashed, they took California’s finances down with them.

Maybe, instead of villainizing the rich, the people should pray for their success. And instead of taxing them to death, the government should enable and encourage them to prosper.

Adam Smith: Supply Side Economist

From The Wealth of Nations:

High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to government than what might be drawn from more moderate taxes. [page 954]

Profit windfall tax on absurd public pensions

It has been discovered that certain school administrators in Illinois are earning salaries in excess of $300,000 and are owed pensions valued in the tens of millions.

When oil companies make record profits, liberals start arguing for “profit windfall taxes.” I suggest we turn the tables on them. These are clearly windfall pensions and should be taxed as such.

New York ruling changes tax law. Get ready for a marginal tax rate of 288%.

New York has decided that owners of property living in another state may still have to pay income taxes in New York. The Wall Street Journal reports:

Connecticut and New Jersey residents with a Hamptons summer cottage or a Manhattan pied-a-terre are about to get a nasty surprise: New York state wants more taxes from them.

A New York court ruled last month that all income earned by a New Canaan, Conn., couple is subject to New York state taxes because they own a summer home on Long Island they used only a few times a year. They have been hit with an additional tax bill of $1.06 million.

Tax experts and real estate brokers say this ruling could boost the tax bill for thousands of business executives who own New York City apartments they use only occasionally. It could also hurt sales in the Hamptons and New York’s other vacation-home communities.

I want to focus on this line:

Under the ruling, if an owner doesn’t spend a single a day in a home it could still count toward a permanent residence.

If every state applied this ruling and federal court does not overturn it, a person could in theory own housing property in every single state and thus owe income tax in every single state and the District of Columbia. By my rough calculation using the top marginal federal income tax rate of 35% and the sum of all the top marginal state income tax rates, a person could theoretically be taxed at a rate of 288%. (Yes, I recognize it is absurd for somebody to have property in all 50 states and DC, but the whole notion of paying income taxes in every state you own property is equally absurd.)

I urge the federal courts to overturn this ruling. A permanent residence should be and must be the state in which the person lives the most. Income should only be taxed by states once, either by residency or by where it is earned. Not both and certainly not in a state where a person is neither a resident nor an income earner.

Isn’t this why we have the interstate commerce clause in the first place? To stop states from conducting commercial and financial warfare against other states or residents of other states?

We need more savings, not more spending.

Just the other day, I wrote:

Spending money is not what creates wealth. To create wealth, one must save, invest, and produce items that had not existed before or items that do exist but of higher quality or at a lower cost.

Contrary Investor Subscriber Report analyzed this in more detail and included some nice charts. They clearly show that as spending rose and savings fell, the economy grew at a slow rate.

Warren Buffett is wrong because he doesn’t understand economics. Support the Fair Tax.

Warren Buffett recently remarked:

The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.

Technically, what Mr. Buffett said may be true but only because he is looking at the wrong thing. I’m sorry that this supposed capitalist and businessman has never learned that spending money is not what creates wealth. To create wealth, one must save, invest, and produce items that had not existed before or items that do exist but of higher quality or at a lower cost.

Instead of encouraging spending, as the current and past Presidents have done, we should be encouraging investment. That means lower taxes on investments (capital gain, interest, and dividends) and, to offset that loss of revenue, either lower government spending (my preference) or higher taxes on spending. Until 1913, with a few rare exceptions (Civil War), all federal taxes were collected on spending while income, both earned and from investments, were non-taxable. During that time, the United States economy grew like nothing the world had ever seen before. Since the income tax has replaced tariffs as the primary source of government revenue, the United States has saved and invested less money and the economy has grown more slowly.

Mr. Buffett argues that we’ve tried trickle-down economics and it has failed. We have also tried trickle-up economics (in the late 1960s) and it too failed. Let’s try something that has succeeded: consumption taxes instead of income taxes.

Bush got things done, Obama takes credit for doing nothing.

Regardless of your opinion of President George W. Bush, there is no denying that he knew how to get things done. Unfortunately for him, much of what he did was vilified by the media. The Bush tax cuts, for instance, were portrayed as “tax cuts for the rich” even though the rich’s share of the tax burden rose and the tax cuts helped spur economic growth. In the words of Rodney Dangerfield, Bush “got no respect.”

Along comes President Barack Obama. As candidate and President, Obama attacked the “tax cuts for the rich” that Bush gave out. But then, suddenly, President Obama compromises with the Republicans and extends the Bush tax cuts. CNN, who heeped no praise on Bush for his tax cuts, is now praising Obama for extending the tax cuts:

Most Americans like the new tax cut law that President Barack Obama signed into law on Friday, according to a new national poll.

And a CNN/Opinion Research Corporation survey released Monday also indicates that while the tax cut compromise the president struck with congressional Republicans didn’t spark Obama’s overall approval rating, it may have given him a boost as “Triangulator in Chief.”

The poll also indicates that 55 percent of the public thinks Obama’s policies will move the country in the right direction, with just over four in ten saying the president’s policies will move the nation in the wrong direction. Obama’s 55 percent is 11 points higher than the 44 percent who say the policies of congressional Republican leaders will move the country in the right direction. Americans are split at 48 percent on whether what congressional Democrats are proposing will move the country along the right path.

“Since the GOP just picked up 63 seats in the House, what’s not to like about their policies? The tax bill may be a good place to start,” says Holland.

According to the poll, 56 percent of the public say that the bill does too much for wealthy Americans and six in ten don’t like extending the tax cuts for families making more than $250,000 or the changes in the estate tax. And less than one in four believe that their personal situation will improve as a result of the tax bill. Only four in ten favor an increase in the federal deficit to pay for tax cut compromise.

But despite those figures, three-quarters of all Americans approve of the tax bill overall, including the extension of jobless benefits for the long term unemployed.

If you are keeping score at home:

• President Bush and the Republicans were wrong to pass the tax cuts in 2001 and 2003.
• President Obama was right to extend them in 2010.
• Republicans were wrong to extend them in 2010.