Today is

Thursday, November 22, 2007

Tax Cuts At Root Of Inequality

You may have heard or read that gazillionaire Warren Buffett challenged some his wealthy friends on the Fortune 500 list to examine their conscience when comparing their tax rates to the working class stiffs in the office. He also called the "death tax" rhetoric "intellectually dishonest" and "clever, Orwellian and dead wrong."
"Dynastic wealth, the enemy of meritocracy, is on the rise," Buffett told the panel. "Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."
In rebuttal to Buffett's testimony was this open letter on the Web to which of course I offered some simple deconstruction.
An open letter to Warren Buffett

Open Letter Excerpt:
Your low rate is the result of your using your assets to make donations to charitable foundations (thank you, by the way), thereby reducing your income for the one year and thus your tax rate.
This says a lot. Buffett appears to be wanting to make a more noble statement. That he would much rather donate to charitable organizations out of the goodness of his heart – and not because it might garner him a tax cut, although I don't blame him for either.
Open Letter Excerpt:
I would presume that you have also decided to receive dividend income to help reduce your taxable income and thereby your effective tax rate. What your argument fails to mention is that your dividends are paid after taxes paid by the corporation of as much as 33%. The reason that reducing taxes on dividends is necessary is because they are taxed twice previously.
One of my favorite arguments here. Claiming corporate profits are taxed by as much as 33% are taxes that have been raised by gouging the consuming base. I have the entire Republican Party and all their conservative friends and think-tank operatives to back me up on this one. The moment a democrat wants to raise corporate taxes, Republicans scream it will effect seniors, consumers and the working poor the most. Why is that?

The only pure tax on profits at all is on dividends reported as income which is precisely the reason why the GOP and their Wall Street supporters want to reduce it or end it entirely because there IS NO ONE LEFT THEY CAN SHIFT THE BURDEN TO AT THIS POINT in the chain of earnings. The taxed twice argument is dead.
Open Letter Excerpt:
Finally, you say the estate tax should be paid. You mentioned that if you go to 200 funerals, in only one will the estate tax have been paid. As an accountant, I can assure you that the 199 families planned their estates (as you did) to make sure that this ludicrous tax could be avoided.
Using their numbers, are we so concerned about a tax that effects only one-half of one percent of the wealthiest qualifying estates?
Open Letter Excerpt:
But if you think that I would rather have the federal government determine how to spend my money, you are sadly mistaken. Government spending already is out of control. To feed the system with more tax revenue is unwise.
I still determine how I spend my own money after paying taxes for the privilege and honor of living in America. Both the president and our Rep. Paul Ryan insist their selective tax cut policies created more tax revenue, and since feeding the system is unwise as you put it - it looks like a tax hike is in order.

No comments:

Post a Comment