by J.D. Lech | August 8, 2010
This post was inspired by the recent blog post “Deficit Frauds Boehner And Pence Can’t Answer How Tax Cuts For Wealthy Will Be Paid For,“by Ben Armbruster
Whenever you talk to a conservative about taxes, there’s something you should know. Let me explain by example.
And yet, we have Warren Buffet telling his fellow rich people, Congress, America, and pretty much anyone else who will listen that this is exactly what is happening. For three years now, Warren has had a challenge for anyone on the Forbes 400 list of wealthiest Americans to show that they paid an equal or higher rate than their secretary. There has been several who looked into it, and all have found Buffet is right.
There’s something you should know: the ultra rich are already paying a LOWER tax rate than the rest of us.
And the conservatives, being the tools they are, will want to show you tax tables and redirect the conversation to absolute dollar terms. But Warren Buffet has proven these arguments to be all smoke and mirrors. Worse, they want to cut the rate for the ultra rich even further. Even worse, they have no idea how to pay for it. These are the people who cut emergency aid to millions of struggling Americans because they want it paid for first. But when it comes to tax breaks for gazillionaires, they don’t even care if it’s all money borrowed from the rest of us.
How’s that for a double standard?
Now here’s the worst part of it: not only is this the most regressive tax plan ever devised, but it is also unsustainable.
That 1 rich guy may employ all 99 other guys. But what we can plainly see today is that as he hoards the wealth, everyone else’s income is dropping and he’s laying them off. Thus, the 99 guys cannot pay for what they once bought. The rich guy – who owns nearly everything already – sees his sales drop. So he cuts incomes more and lays more people off. It’s the classic rondo of deflation.
The truth is: one person, no matter how rich he is, cannot (or will not) consume the equivalent of 99 people. There is only so much food he will eat, so much toothpaste he will use, so much TP he will use up, only so many cars he will buy, only so much fuel he will burn, etc.. These are physical limitations tied directly to his physiology, as well as psychological limitations tied directly to the way we all think. So when wealth is overly concentrated in the hands of a few, demand falls off spurring more cut backs and layoffs. So it’s not the rich that will use the money most wisely. It’s the middle class business owner who makes less than $200K per year – most of whom make half that or less.
If anyone should get a tax break to spur the economy, it’s them. Not the gazillionaires; their tax rate should exceed ours, not contrariwise.
Let’s say we have 100 people.Now, the conservative is fixated on the fact that the one rich guy is paying half the taxes. But unless you’re a fool, you can plainly see that taxing the rich guy at 1/10th the rate as the rest of us is wrong in every sense of the word.
99 make $10K per year.
1 makes $10M per year.
Now let’s tax the 99 at 10%, so we get
$10K x 10% x 99 people = $99,000
Now let’s tax the 1 person at only 1%, so we get
$10M x 1% x 1 person = $100,000
Total revenue = $199,000
And yet, we have Warren Buffet telling his fellow rich people, Congress, America, and pretty much anyone else who will listen that this is exactly what is happening. For three years now, Warren has had a challenge for anyone on the Forbes 400 list of wealthiest Americans to show that they paid an equal or higher rate than their secretary. There has been several who looked into it, and all have found Buffet is right.
There’s something you should know: the ultra rich are already paying a LOWER tax rate than the rest of us.
And the conservatives, being the tools they are, will want to show you tax tables and redirect the conversation to absolute dollar terms. But Warren Buffet has proven these arguments to be all smoke and mirrors. Worse, they want to cut the rate for the ultra rich even further. Even worse, they have no idea how to pay for it. These are the people who cut emergency aid to millions of struggling Americans because they want it paid for first. But when it comes to tax breaks for gazillionaires, they don’t even care if it’s all money borrowed from the rest of us.
How’s that for a double standard?
Now here’s the worst part of it: not only is this the most regressive tax plan ever devised, but it is also unsustainable.
That 1 rich guy may employ all 99 other guys. But what we can plainly see today is that as he hoards the wealth, everyone else’s income is dropping and he’s laying them off. Thus, the 99 guys cannot pay for what they once bought. The rich guy – who owns nearly everything already – sees his sales drop. So he cuts incomes more and lays more people off. It’s the classic rondo of deflation.
The truth is: one person, no matter how rich he is, cannot (or will not) consume the equivalent of 99 people. There is only so much food he will eat, so much toothpaste he will use, so much TP he will use up, only so many cars he will buy, only so much fuel he will burn, etc.. These are physical limitations tied directly to his physiology, as well as psychological limitations tied directly to the way we all think. So when wealth is overly concentrated in the hands of a few, demand falls off spurring more cut backs and layoffs. So it’s not the rich that will use the money most wisely. It’s the middle class business owner who makes less than $200K per year – most of whom make half that or less.
If anyone should get a tax break to spur the economy, it’s them. Not the gazillionaires; their tax rate should exceed ours, not contrariwise.
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