November 15, 2007 by Tom Armstrong.

Here’s Russell R. interviewing Don B. on antitrust.

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November 15, 2007 by Tom Armstrong.

My nomination for the Biggest Douche in the Universe Award. Really, the stuff that flows from his month is akin to this.

For those with a more sophisticated sense of humor, I apologize for the above.

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November 15, 2007 by Tom Armstrong.

I linked to the U.S. Treasury study on Income Mobility a day or two ago. It appears that someone questions the validity of the study. Someone always does. Reader says:

The Treasury Report referred to is extremely poor in my opinion.

This is not the only research available. I see Dr. Mankiw has also linked to this same Treasury study. He suggested reading other research that reached the same conclusions.

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November 15, 2007 by Tom Armstrong.

Steve Forbes offers this opinion on Warren Buffett:

Warren Buffett has been getting a load of publicity lately by declaring that the members of The Forbes 400 have lower tax rates than corporate receptionists and other middle-class Americans. In an interview with Tom Brokaw, Buffett said: “The Forbes 400, a bunch of my fellow rich guys, their tax rate overall to the federal government [is] less than that of their receptionist.”

Nice sound bite, but he’s deliberately mixing up the income tax with the Social Security portion of the payroll tax. Every worker pays this tax on earnings up to $97,500. Employees pay 6.2%, and employers match that, for a combined rate of 12.4%. This tax disappears on earnings above $97,500. Thus, most of Warren Buffett’s income is not subject to that 12.4% levy. Social Security taxes are supposed to fund Social Security, period. It’s a forced pension tax.

The income tax is a different animal. That money goes to fund all non-Medicare, non-Social Security federal programs.

So we’re talking about two issues here: the federal income tax code and financing Social Security.

Buffett says that upper-income earners aren’t taxed enough. Federal income tax returns show that assertion to be nonsense. About one-third of those who file federal income tax returns end up owing no federal income tax at all. In contrast, the top 1% of income earners–who receive 21% of the nation’s reported income–pay 39% of federal income taxes. The top 5% pay 60%, and the top 50% pay 97% of federal income taxes.

Buffett claims his total income tax rate is 17.7%. But most of his income is in capital gains and dividends. Otherwise, he’d be hit by the alternative minimum tax of 26% to 28%. Capital gains are not the same as salary income. Surely Warren knows the difference between the two. As for dividends, they’re already taxed at the corporate level. That’s why the personal rate was cut to 15% in 2003. It’s still double taxation, but less egregious than before. Or does Buffett believe that dividends should be fully taxed twice–once at the corporate level and then again at the individual level?

Buffett is not interested in paying more taxes; he’s just hitting the age where he’s got to start justifying his own wealth to himself and to convince the public he’s “in touch” with society’s concerns. If he were really interested in paying more in taxes, why did he donate to the Bill and Melinda Gates Foundation? Why did that money not go to the U.S. Treasury Department? He had a choice, and he chose to direct those dollars away from the U.S. Treasury Department because he felt they could be better utilized elsewhere. Had the U.S. government been taxing him more to begin with, he would have been denied that option to donate as much to charity. If it’s so important to Mr. Buffett to pay his “fair share,” why didn’t he do so by leaving the bulk of his money with the IRS? Mr. Buffett: keep your hand off my wallet, particularly since you’re unwilling to open your own for the causes for which you advocate.

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