For Wednesday:
1. Read this. Respond to it in the comments section below this post.
2. Finish online library quizzes.
3. Start following this blog if you haven't, and start your own blog for next week. In the future, we will post responses on our own blogs, and I'll have you respond to at least two other people's posts as well.
Warren Buffet is extremely well known all over the world for his wisdom in investment strategies. This is obviously seen in the article we read because we see that he is not spending his money on things that relate to no use to him (boats, yachts, and mansions). Dr. Sumner brings up an excellent question. Though Buffet makes billions and billions of dollars, should he have to pay all the same amount of taxes compared to someone who spends all their money on other taxable items? Sumner thinks that fairness can come in a different way then in always taxing the wealthier more, and that is an excellent point/question to input. I do not think that the wealthy should always have to pay the higher taxes. They only should have to pay more taxes if they consume more resources than others.
ReplyDeleteAccording to the always correct and never questioned Wikipedia, Warren Buffet is work more than $50 Billion, but only receives a $100,000 salary. He states in the quotation given in the article that the $6,938,744 that he paid in taxes is only 17.4% of his taxable income, thus making taxable income equal to $39,877,839.10.
ReplyDeleteThe point of this article is that the author saying that Buffet was foolish in paying so much. He says that the wealthy who splurge on yachts and houses should pay more that they already do, but people like Buffet should not pay so much since he doesn't splurge. The author for some reason does not clearly state why Buffet should not pay taxes on the almost $40 Million that must have come from interest and dividends from his $50 Billion in holdings. While this is a valid point, the tax system is not based upon one's worth (how much you add to/take from society), but instead on how much one makes per year. And the author for some reason does not clearly state why Buffet should not pay taxes on the almost $40 Million that must have come from interest and dividends from his $50 Billion in holdings.
Quite frankly, I feel that the author is the foolish one, questioning the man who is the world's most intelligent investor and third wealthiest man on his tax returns.
Warren Buffet is obviously a very intelligent investor to make so much money. But the real question of this article is if it is justified that he pays more taxes due to his salary even though he doesn't indulge on a wealthy life style, such as the newest technology, yachts, mansions, etc. I don't agree with the author. If he was taxed for how much he indulged himself in the economy, he would have a lot of money just in savings. It would just sit there, which doesn’t help anything. At least with taxes, he's helping fund our nation. It is important that someone who makes so much money does his part to help the nation. No one needs that much money to survive off of so why not give it to taxes and give the government money to help budget our nation?
ReplyDeleteI believe the federal income tax is a flawed system the central government exercises to generate revenue. The primary monetary objective at an individual level is to make money. Quite simply, more people with more money stimulate the economy. The Federal income tax, however, discourages people from making more money by placing them in high tax brackets. If people who earned higher salaries were able to retain more of what they earned, there would be greater cash flow in the economy and individuals would have more money to buy, invest,etc. I believe, as the writer mentions, that the federal income tax is a counterintuitive method to acquiring revenue. Consumption, not salaries, should direct the amount of money in taxes an individual should be required to pay. Consumption takes goods out of the market, while investment helps put those resources back. The government should encourage investment by taxing consumption, not profit. That will, in turn, stimulate the economy.
ReplyDeleteThe article suggests the idea that a person should be taxed on the amount of money spent on items he or she buys. The example that is given is about Warren Buffet, a successful business man who has made a lot of his money through investments. Buffet does not spend a lot of money on luxurious goods like yachts and fancy cars. Because he does not spend a lot, the author thinks he should not be taxed as mush as his peers. I think this is insane. What a person does with their money should not have any effect on how much one is being taxed. If people are worried about the amount of money they spend then high cost goods will not be sold and businesses would suffer.
ReplyDeleteI completely agree with the author's sentiment that extremely wealthy individuals who consume a lot of resources just for their own personal benefit should be taxed at a much higher rate than the "little man." I had a teacher in high school who attributed the current budget issues in many SC public school districts to a SC law that cut tax hikes on the wealthy. Since taxes are what help fund the public school system, that reduction caused a significant lapse in funding - at least that was the way she explained it to us. When you look at an example like this, it is easy to be convinced that we need the tax money we could be generating from the wealthy. Taxing them is not a means of punishing them; it is a means of upholding the economy, which would ultimately be to their benefit anyway.
ReplyDeleteHaving said all of that, I do think there is something to be said about not taxing every person (including every "high-roller") uniformly. If Warren Buffet has made his money by being a brilliant investor and chooses to be frugal with it, then he should be allowed to be a little less obligated when it comes to taxes. Because even though taxation is not a punishment (as I said earlier), it doesn't seem fair to strip the same percentage away from someone who is financially wise that you would strip from someone who is reckless and spends wantonly (yachts, personal pleasures, etc.). I don't know. There are many sides to the argument and I don't truly understand the author's take on how taxes are determined, so I've probably said enough. Ultimately, though, I believe that we all have a duty to our nation through taxation and that that duty should be proportional based on your financial standing, as it supposedly is, but in practice doesn't always turn out to be.
Why tax the rich more? Is that going to solve any problems? "Oh, well they use up more resources", so what. The problems that Americans have are not going to be solved by taxing anyone more. We are a quick-fix civilization, and this is yet another way to fix it. The root of it is Globalization being preached to us from everyone. We are looking far away at things we don't understand, and by discussion will never change them. We need instead to look at each other and realize that we have to fix our own problems. Stop blaming the rich for using resources and not doing their part, pick up a shovel and dig for yourself.
ReplyDeleteI actually think that a larger tax on big expenditures, like yachts, etc. mentioned in the article, could be a minute but nonetheless beneficial practice. I personally believe that enormous separations in wealth and status are a negative thing, and I believe that corporate greed and promotion of companies becoming overbearingly and overwhelmingly huge (i.e. "too big to fail") has a very negative effect on the economy. The rich will not stop buying their luxuries if an extra tax is made effective, so that extra money will certainly continue to flow into the economy. On the other hand, if the government had allowed these super-massive auto companies to "fail," the market would not have suffered any negative consequences because what ever slack needed to be picked up would be picked up by the remaining companies that survived; the demand for products would remain the same. That's just my take on the the separation of wealth.
ReplyDeleteThis article is a good example of why a party should be generally labelled as supporting the wealthy. Anybody can be corrupt, regardless of their political affiliation. Additionally, investing, which if done correctly as Warren Buffet does, is usually beneficial to the economy, but is discouraged by investment income taxes. The government should take measures to prevent over speculation, but there are other measures already in place that are effective.
ReplyDeleteThis brings up the age-old debate of whether or not people should pay taxes based on income or net worth. Should someone pay taxes on every dollar they earned throughout the fiscal year, or merely on every dollar they are worth at any given time throughout the same year. Which is more beneficial to the individual? Which is more beneficial to society/government? But upon further consideration, this leads us from the conceptual argument of taxation salary or networth, to the tangible argument of a flawed tax system with a seemingly infinite amount of tax loopholes and nuances that can be exploited by anyone with a fairly good CPA or do-it-yourself software.
ReplyDeleteWhile I took issue with several key pieces of this article, in my opinion, this article presented an interesting view on taxation. First off, I found the idea of taxation based on consumption to be intriguing, if not entirely realistic. America's tax code as it stands today is already far too complicated for anyone to understand it entirely. The idea that taxes have become so complex that it has become necessary to pay accountants to figure out how much to pay the government is absurd. Second, I agree with the author's opinion that Buffet should be taxed less for the same reason: double taxation is not fair. When investors such as Buffet pay taxes on returns from investments, they are being taxed for profiting on their investments, investments which were originally made with money that has already faced taxation. Also, I found the author's immediate attack on Buffet to be overworked and unnecessary, as well as written from a very arrogant perspective. Lastly, I believe that taxation in our country as a whole is not the problem. The problem we have is spending, and the only way to fix that is to run our country like Warren Buffet has run his companies: with the intention of making a profit. This entails cutting back on wasteful spending most of all as well as increasing efficiency in the government, both of which are mammoth problems which will only be solved by major overhauls to the government's structure.
ReplyDelete