In Latest Bout Of Class Warfare, Multi-Millionaire Harry Reid Seeks To Replace Buffett Tax Proposal With 5% Millionaire Surtax

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Wed, 10/05/2011 - 12:08 | 1741631 ghostfaceinvestah
ghostfaceinvestah's picture

Sounds OK to me.

Wed, 10/05/2011 - 12:18 | 1741683 Nascent_Variable
Nascent_Variable's picture

Real, effective tax reform would not paint in such broad strokes.  The way to generate revenue, level the playing field, and stimulate the economy at the same time is to punish the cheaters, while encouraging investment.  Cut top rates and reduce or eliminate most, if not all, deductions and credits at the same time.  Make a move toward a progressive flat tax.

The lower rates decrease capital flight, while the closed loopholes keep companies like GE from paying an effective rate of <10% with billions in revenue.  As an added bonus, the government's ability to conduct social engineering through the tax code is greatly reduced.

Wed, 10/05/2011 - 12:54 | 1741896 Gold Man-Sacks
Gold Man-Sacks's picture

"Make a move toward a progressive flat tax... ?"  Do you realize the absurdity in what you just said?

Wed, 10/05/2011 - 13:01 | 1741923 Nascent_Variable
Nascent_Variable's picture

Flat in the sense of unmoving, i.e. top rate and effective rate are virtually the same.  Progressive in the sense that the tax rates adjust up with income.  I have a hard time getting on board with a tax that isn't progressive.

The key to a plan like that is that you can greatly reduce the tax burden of everyone by eliminating the system that punishes those who cheat the best.  People who work for a living aren't the ones who pay a small fraction of their top rates.

Wed, 10/05/2011 - 13:24 | 1741987 Bicycle Repairman
Bicycle Repairman's picture

If tinkering with the tax code is about feeding Leviathin or social engineering, forget about it.

Wed, 10/05/2011 - 14:46 | 1742261 bid the soldier...
bid the soldiers shoot's picture

Forget about it, If tinkering with the tax code is about "feeding the Leviathin." Especially at Maison Blanche, Tour d'Argent and the other tony restaurants.

I accidentally junked you. You'll get make-goods.

Wed, 10/05/2011 - 16:01 | 1742576 traderjoe
traderjoe's picture

Why tax at all? Bring back the United States Note and eliminate all national debt. Then you have no need to tax...

Wed, 10/05/2011 - 17:01 | 1742884 eureka
eureka's picture

Why bother at all?  Let the unholy US Federation & Empire disintegrate.

Let each state and or region form its own little country.

US'ians hate each other. 

 

Wed, 10/05/2011 - 14:18 | 1742147 mayhem_korner
mayhem_korner's picture

 I have a hard time getting on board with a tax that isn't progressive.

Are you advocating getting rid of lotteries, toll booths, sales taxes, and FICA?  Curious minds want to know...

Wed, 10/05/2011 - 14:40 | 1742244 Grinder74
Grinder74's picture

15% of $50,000 income = 7,500 in taxes

15% of $1,000,000 income = 150,000 in taxes

150,000 is greater than 7,500 (2000% greater in fact)

How is that not already paying their "fair share"?

Wed, 10/05/2011 - 14:56 | 1742284 Nascent_Variable
Nascent_Variable's picture

I'll admit you make a good point, but the problem is less on the 50K - 1,000K spectrum than it is on the 10-15K.  If somebody is not making enough to cover basic expenses even after slashing them to the minimum, imposing a flat tax on them creates an incredible hardship, more so than anyone in the higher income ranges.

People making that little (assuming no government entitlements) aren't the ones reaping the rewards of the system.

Wed, 10/05/2011 - 18:58 | 1743267 Old Poor Richard
Old Poor Richard's picture

15% of $50,000 income = 7,500 in taxes

15% of $1,000,000 income = 150,000 in taxes

150,000 is greater than 7,500 (2000% greater in fact)

How is that not already paying their "fair share"?

 

Almost there.  Create modest personal exemptions for earners and non-working dependents to cover basic living expenses, and it's a fair and progressive flat tax.

( $50,000 - $8,500 - 4 * $3,700 ) = $26,700 * 15% = $4,005 in taxes

( $1,000,000 - $8,500 - 4 * $3,700 ) = $976,700 * 15% = $146,505 in taxes

Now fair.

 

Wed, 10/05/2011 - 15:16 | 1742346 Banjo
Banjo's picture

The richest people earning 1million pa use many schemes, trusts, investment loans etc... to ensure they earn whaterver income they want to declare. I have generally found rich people to be pretty intelligent people and if they don't know how to work the books themselves they hire someone who can make it happen.

 

I read recently the big corporations want a tax holiday on overseas profits. All for the good of the average person of course just like the bailouts :)

 

I would like to see someone model an economy that uses the flat tax you describe and a capital tax with corresonding national dividend. These rates should flucutuate depending on the level of participation less participation lower taxes and therefore lower national dividend.

 

Irving Fischer also proposed abolishing fractional reserve banking after the great depression, I also think this would be an idea worthy of developing.

Wed, 10/05/2011 - 15:58 | 1742551 tmosley
tmosley's picture

What happens when you through slow but persistant inflation into the mix, pushing ever more people into those higher percentage tax brackets?

Wed, 10/05/2011 - 16:30 | 1742747 blunderdog
blunderdog's picture

How about we worry about that if wages ever start to increase again, eh? 

Thu, 10/06/2011 - 12:08 | 1746053 Gold Man-Sacks
Gold Man-Sacks's picture

Why stop with progressive income taxes, then?  I mean, how about progressive prices at Pizza Hut?  The more money you make, the more you pay for that medium pizza.  The unemployed guy with five kids not only pays nothing, but actually gets a credit when he gets the extra-large. 

Wed, 10/05/2011 - 13:25 | 1741990 macholatte
macholatte's picture

 

There has been little the Progressives have done that I have seen as good for America. However, I support a tax  surcharge and would scold the wealthy whinners who are indignant because Barry didn't say "Please".  Fuck 'em! 

Also, I propose a new Minimum Tax of $1,000 ($1,500 for married couples filing jointly) on EVERYONE. Including the parasites. That would raise another $50B-$70B per year.

 

A corporation's primary goal is to make money. Government's primary role is to take a big chunk of that money and give it to others.
Larry Ellison

The politicians say "we" can't afford a tax cut. Maybe we can't afford the politicians.
Steve Forbes

When you consider that a steelworker who’s making $40,000 a year has virtually the same tax burden as someone who’s making $400,000 a year, you see that there are inequities. This administration has used the tax code to accelerate wealth to the top. Most of the tax breaks have gone to people in the top bracket.
Dennis Kucinich

 Everyone wants a more simple tax system. But if this means that certain tax breaks have to be cut, people are no longer so enthusiastic.
Angela Merkel


The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person...

The Wealth Of Nations, Book V Chapter II Pt II, p. 825, para. 4.

Wed, 10/05/2011 - 14:10 | 1742111 Rick64
Rick64's picture

I have a another suggestion. We get rid of all the rich politicians who are colluding with their paymasters (corporations and banks) while the taxpayers pay their salaries, expenditures, pensions, and health insurance. Are these rich politicians are more in touch with big business or the common citizen?

Wed, 10/05/2011 - 14:42 | 1742249 Grinder74
Grinder74's picture

Let's start with a surcharge on Unions who receive hundreds of millions every year tax-free.

Wed, 10/05/2011 - 15:21 | 1742370 Banjo
Banjo's picture

One thing Adam Smith failed to see back in the days of gold and silver being base money. Is the distortion available to a government when they can print unlimited amounts of reserve currency.

This means that difficult decisions do not have to be taken with regards how to pay for current spending as you can create as much money as you like. How this gets paid back in the future well no one is really sure except for the idea of default (deflation) default (inflation)

Wed, 10/05/2011 - 17:37 | 1742998 blunderdog
blunderdog's picture

"I propose a new Minimum Tax of $1,000 ($1,500 for married couples filing jointly) on EVERYONE."

Why in the hell would you want government subsidizing MARRIAGE, for fuck's sake?

Wed, 10/05/2011 - 18:45 | 1743224 Old Poor Richard
Old Poor Richard's picture

Not absurd at all.

The fix for that is a flat tax with exemptions for the earner and for non-working dependents, and no others.  It is a flat tax with one rate, but that personal exemption is fixed and so provides less proportional relief for higher incomes.  

Progressive flat tax.  File on a post card.  No shelters.  All income treated equally whether interest, dividends, wages, capital gains, gambling winnings, inheritances, life insurnace payouts--if it's NEW TO YOU, it's INCOME, and thus it's taxed at the same flat rate. 

 

Wed, 10/05/2011 - 12:27 | 1741752 MillionDollarBonus_
MillionDollarBonus_'s picture

These disputes could all be solved by doing away with free market wages, and introducing a minimum wage that provides Americans with a luxurious standard of living comparable to the highest members of society. For example, if we set the minimum wage at 1,000,000 dollars per year, we would have far better income equality and upward mobility. I suggest people refer to Alan Krueger's paper which PROVES the benefits of wage-controls beyond any reasonable doubt (http://www.nber.org/papers/w5224). Alan Krueger is rated as one of the 50 BEST ECONOMISTS in the world by REPEC (http://ideas.repec.org/top/top.person.all.html), and will go down in history as one of the great pioneers of centralised price controls.

Wed, 10/05/2011 - 12:36 | 1741802 Rothbardian in ...
Rothbardian in Cleveland's picture

Why 1,000,000?  I mean, a house and a Bently and what not, takes a bit out of that right quick.  Why not 5,000,000 or 10,000,000.  That would be so kick ass!!!

 

 

Wed, 10/05/2011 - 13:49 | 1742055 MillionDollarBonus_
MillionDollarBonus_'s picture

I appreciate the suggestion but 10000000 dollars a year is slightly too high and could discourage or prevent employers from hiring more workers. I hate to say it but this kind of comment demonstrates a serious lack of economic education, which is one of the reasons we are in this predicament in the first place.

Wed, 10/05/2011 - 14:12 | 1742116 Pure Evil
Pure Evil's picture

As a famous cartoon wabbit was fond of saying:

What a maroon!   ~Bugs Bunny

I think it's your's and Washington's lack of serious economic common sense that is the reason we are in this predicament.

Exactly how are small buisnesses that don't even generate income in the millions but might have one or two employees supposed to come up with the money to pay each employee one million a year. Are they supposed to go out and borrow the money. What happens if  after everyone at the small company gets there million dollar salaries and the company still generates income that is less than a million a year?

Is the government going to give everyone one million a year, if so then what is the incentive to work?

Your new idea is stupider than your last one. Doesn't the AolHuffPost have a section you can spread this illiterate tripe on.

Wed, 10/05/2011 - 12:36 | 1741803 tmosley
tmosley's picture

I think you need to present this proposal to the president.

Wed, 10/05/2011 - 12:58 | 1741911 ElvisDog
ElvisDog's picture

I must admit I do enjoy the absurdity of MDB's posts.

Wed, 10/05/2011 - 13:03 | 1741920 Pure Evil
Pure Evil's picture

Wow, pure genius.

I fail to comprehend why ZH has yet to offer this illuminute his own space to post his brilliant thoughts.

Let's see, exactly where have wage and price controls been applied in the past?

Hmmm, Cuba maybe?, the Soviet Union?, how's North Korea lookin'?, can anyone remember Communist China?, Communist Vietnam? Care to look south of the border into central and south America?

Ah yes, didn't we dally with price and wage controls during the Nixon/Ford/Carter administrations?

I'm all for everyone making one million a year, just see if you can maintain supply while keeping prices down, or is that working for Chavez in Venezuela.

One suggestion, don't quit your day job.

But with your line of reasoning I'm sure you'll be quite the attraction on Worlds Dumbest Economists, they'll devote a whole hour long show just to you.

Wed, 10/05/2011 - 15:53 | 1742456 Banjo
Banjo's picture

The reason I like your post so much it clearly demonstrates a fundamental issue is how do we equitably distribute a portion of wealth, that is then able to re-circulate within the economy, to form a robust middle class with adequate incentive to produce.

One suggestion is we do it as a percentage of turnover, higher turnover and or productivity = higher wages. This means in a bubble inflation or growing economy wages are rising in a deflation or contractionary economy wages are falling AND criticaly related to the turnover of the business you are associated with. (I know this is a dream because accountants would hired to show no turnover or significantly reduced turnover in the business)

This almost shares the Marxist concept of "who owns the means of production" you see someone who actually owns productive plant and property unencumbered and not intermediatd by tranches of claims on said real productive capacity (as in common stock where there are numerous other creditors that have claim to company assets ahead of stock holders) is not worried about deflation or inflation because if you need to buy cars, airfares, energy, toothpaste, bread and other items, the owner of productive capital will always be able to make money at a price point that makes relative sense.

What we have now is something that has individuals contribute their labour and depending on what role you land in the economy you may not obtaine a fair share (however we define it) based on your input. We only need to look at someone who say cleans your hotel room or picks up your trash and juxtapose this against a banker selling loans.

I am not arguing that a banker should earn less money I am suggesting that perhaps under our current system structurally that the cleaner for example is possibly not receiving an equitable distribution of wealth compared to our banker who I suggest may be earning excess compared to their input.

Wed, 10/05/2011 - 16:57 | 1742843 Pure Evil
Pure Evil's picture

This is ignorance at its best.

If a janitor is unhappy with his annual income, and envious of a bankers annual income, then he should stop being a janitor and become a banker, or an athlete, or a hollywood movie star, or whatever it takes to make the amount of money he feels he is entitled to earn.

At least the mob doesn't sit around griping about how so and so makes this much while so and so makes that much per year, they go out and steal as much as possible instead of sitting around pontificating about how everyone is entitled to one million a year in annual income.

So, stop whining about how much someone else makes and go out and start making your own millions or billions.

Ahh, you don't know how to go about making a million or a billion dollars in annual income a year? Too bad, I guess that's why you sit around expecting someone else to give it to you for nothing.

It seems we have a lot of envious monetary warfare turds patrolling the webpages of ZH.

Either that or Obama has created a butload of webots designed to go out and extol the virtues of government mandated wage levels.

I guess the trolls are supposed to think that if everyone makes a million a year that a measly 5% tax would be insignificant.

It just don't work that way. They may give you a million a year annual income but they'll turn around and tax you at 90% of that income.

Then you'll be bitchin' that you don't make enough money and you need two million a year, then 5 million a year, or ten million year.

Wed, 10/05/2011 - 12:40 | 1741825 nedwardkelly
nedwardkelly's picture

Sounds OK to me.

My guess is you don't earn that much. What about when they tweak the law, lower this 'surtax' down to a level that does affect you, THEN will it still sound OK to you? What about when inflation takes you up to the level that it affects you... THEN will it still sound OK?

I dont care who they propose it on, any new income based tax is dead in the water for me. Consumption based tax I can live with.

Even then, unless they start talking about reducing spending, it's all just a discussion on how fast the titanic is taking on water.

Wed, 10/05/2011 - 13:46 | 1742050 kubrick007
kubrick007's picture

how about a 90% tax above $1 million on all income derived by working at a bank, equity firm, hedge fund, FIRE sector, trading, etc...that way if u r an entrepreneur that actually adds something to the economy u can still make $10 billion and pay only 20% or so.

 

that would be fair as it would target those individuals who screwed the system over. i would like to add that tax to anyone who stupidly bought a home that was 5 or more times their avg annual income but those people generally have no $ to give back.

 

i am fedup with the b.s. out there about the tax arguments. the middle class is not rallying against steve jobs or the restaurant franchise owners. no one has a problem with that (or at least very few do). i would venture that over 90% of the population is extremely pissed & rightly so, though, at those who make $1 million to $4 billion a year, simply stealing money from the govt via $2 trillion+ kickbacks so that they can buy 8 balls of cocaine, hang out drinking bottles at 1 oak (ok i don't go out any more so not sure what the spot is now), and paying for hookers....(perhaps also a tax on cocaine & hookers as that would also help recoup much of the kickbacks to the banks). 

Wed, 10/05/2011 - 14:45 | 1742258 Grinder74
Grinder74's picture

Don't forget to include all the idiot pension funds that gave billions to your list of culprits so the culprits could "[screw] the system over".

Wed, 10/05/2011 - 12:08 | 1741633 prophet
prophet's picture

Picking up on BAC idea of $5/month.

Wed, 10/05/2011 - 12:15 | 1741635 GeneMarchbanks
GeneMarchbanks's picture

Moonbats Gone Wild!

I saw Johnson on CNBC yesterday, unenlightened self-interest doesn't impress me and it should be clear to everyone that the "race" issue in America is going to be exploited ad infinitum.

Wed, 10/05/2011 - 12:10 | 1741641 Corn1945
Corn1945's picture

I'm convinced that our elected officials serve only to waste our time.

Wed, 10/05/2011 - 12:16 | 1741670 SheepDog-One
SheepDog-One's picture

Our govt is now nothing but professional cornholers.

Wed, 10/05/2011 - 12:17 | 1741680 GeneMarchbanks
GeneMarchbanks's picture

That's nonsense, they're not professional.

Wed, 10/05/2011 - 14:45 | 1742259 Grinder74
Grinder74's picture

I am Cornholio!  I need TP for my bung-hole!!   Yaaaaaaaaaaaaaaaaaaaah!!!

Wed, 10/05/2011 - 12:16 | 1741674 GeneMarchbanks
GeneMarchbanks's picture

If you get junked I'll be... surprised.

Wed, 10/05/2011 - 12:45 | 1741843 NotApplicable
NotApplicable's picture

Surprise!

The idea that Corn owns any politicians is sheer lunacy.

Wed, 10/05/2011 - 13:40 | 1742036 AmericanFUPAcabra
AmericanFUPAcabra's picture

Douglas Adams - 
- One of the many major problems with governing people is that of whom you get to do it; or rather of who manages to get people to let them do it to them: It is a well known fact, that those people who most want to rule people are, ipso facto, those least suited to do it. Anyone who is capable of getting themselves into a position of power should on no account be allowed to do the job. Another problem with governing people is people.

 

Douglas Adams - 
- Anyone who is capable of getting themselves made President should on no account be allowed to do the job.

 

theres more, but eh

Wed, 10/05/2011 - 12:12 | 1741649 economessed
economessed's picture

If the Federal government needs money, have the Bernank print-up whatever they need.

 

"They pretend to lead the country, and we pretend to pay taxes."

Wed, 10/05/2011 - 12:29 | 1741768 kaiserhoff
kaiserhoff's picture

How about an unearned income tax on all of the government desk jockeys, and an end to free housing for the permanent parasite class?  We could balance the budget in 15 minutes.

Wed, 10/05/2011 - 12:51 | 1741870 i-dog
i-dog's picture

How about we just get rid of the Federal Government? They are the enemy of the sovereign states of the Union ... and therefore the enemy of every sovereign American citizen.

It's not like there aren't already enough politicians and bureaucrats in each state to sort out the roads and water supplies, FFS!!

Wed, 10/05/2011 - 12:12 | 1741650 SilverIsKing
SilverIsKing's picture

Wonder if Warren B supports a tax upon wealth rather than income.  Big talk from guys who've already made their money.  That's the question that needs to be put to him.

As for Harry Reid, creepy dude.

Wed, 10/05/2011 - 12:19 | 1741690 DoChenRollingBearing
DoChenRollingBearing's picture

You see that a lot (I do) from Old Money.  They LIKE the Income Tax, it help keep the Rich Man's Club nice and small.  Better seating at the nice restaurants in town and all.  I have not heard any Buffetts or Gates talking about a Wealth Tax...

Besides, they all have it in trusts or other wise protected from their self-serving tax proposals.

Hypocrites.

Wed, 10/05/2011 - 12:33 | 1741791 ghostfaceinvestah
ghostfaceinvestah's picture

Agreed, a wealth tax would be better, it is too easy to hide passive income.

Wed, 10/05/2011 - 12:12 | 1741651 johnnymustardseed
johnnymustardseed's picture

About time... if he is so rich then he is taxing himself. I am cool with that

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