Author Topic: Stop Coddling the Super-Rich  (Read 10955 times)

S2S

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Re: Stop Coddling the Super-Rich
« Reply #40 on: August 17, 2011, 11:05:45 AM »
Another huge inequity that gets lots of attention: interest deduction on mortgage debt.  I get the deduction and love it, but at the same time I don't think it makes any sense that a portion of my cost of shelter gets paid for by the US govt when the guy renting the house next door to me doesn't get any govt cheese.  In fairness, I shouldn't get government cheese just for my decision to own.

+1. Some argue that eliminating mortgage deduction would cause housing prices to collapse. Well, UK and Canadian taxpayers don't enjoy the free ride, yet last I checked, real estate there is doing just fine.


ERICOPOLY

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Re: Stop Coddling the Super-Rich
« Reply #41 on: August 17, 2011, 12:18:59 PM »
txlaw once argued (back in February or March) that dividends are taxed a second time because corporations are individuals -- so it's a transfer from one individual to another (rather than being truly the "owners' earnings" being taxed twice).

So that strengthens my argument that Buffett is underpaying via his holding company Berkshire.  You see, if corps are individuals then WFC is actually a different individual than BRK.

Proposal:  if once corporation owns 5% of another corporation, then exclude 5% of the dividend from taxation and tax the other 95% of the dividend as regular corporate income (similar to Buffett's proposal of taxing personal dividends as personal income).

Really, that's entirely fair.  It means that his wholly owned subsidiaries don't get taxed twice (he'd get 100% dividend tax exclusion), but when he owns say only 1% of Walmart via Berkshire he doesn't suddenly get his tax rate reduced to only 10.5% via his corporate shelter.  But he gets a 1% reduction in tax in recognition that Walmart is 1% the same individual as Berkshire via their intertwined ownership.

I get txlaw's argument that corps are individuals, and I understand (yet disagree with) his point that my dividends received are not being taxed twice due to the fact that we are actually different individuals from corps...  yet if that's the case then Berkshire is not the same individual as WFC or WMT, and so we can tax Berkshire's dividends much more heavily... to the extent that they are different individuals it is really obvious given the ownership rates.  1% ownership rate is obviously not really fair to qualify for say a 70% reduction in taxation vs what an individual would pay on that dividend.

Summary:  if corps are individuals then treat them as such when it comes to one "individual" paying a dividend to the other -- the more of that individual you own, the less the tax on the dividend.  But we can get rid of the ridiculous automatic discount down to 10.5% tax rates.

bargainman

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Re: Stop Coddling the Super-Rich
« Reply #42 on: August 17, 2011, 08:36:09 PM »
What I never understood is why capital and dividend taxes aren't taxed progressively. I think having low long term capital gains taxes is a good thing since it does encourage investment.  However why not tax it progressively on individuals.  Your first 100K is 15%, your next 200 is 20%, etc. 

Liberty

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Re: Stop Coddling the Super-Rich
« Reply #43 on: August 19, 2011, 08:13:14 PM »
http://civic.moveon.org/standwithwarren/?rc=standwithwarren_letter.fb.v2.g1

Found this. Not an American, so won't sign, but looks like it gathered a lot of signatures.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

txlaw

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Re: Stop Coddling the Super-Rich
« Reply #44 on: August 20, 2011, 05:42:52 PM »
Debate over tax reform.  Definitely worth watching.

http://www.charlierose.com/view/interview/11847

Liberty

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Re: Stop Coddling the Super-Rich
« Reply #45 on: August 21, 2011, 08:30:06 PM »
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen