Pirate's Cove

While we’re at it, why not take away all the amortization and other breaks companies receive? Let’s nail them with higher taxes, especially companies like Progressive Insurance, General Electric, and Heinz. Take away all the breaks for the sports and entertainment industries

(Politico) The Oracle of Omaha came on the show yesterday and promoted his plan to impose a minimum 30 percent tax on millionaires and billionaires. Warren Buffett said such a tax was necessary because fully a quarter of the 400 richest Americans (who averaged $200 million in income) paid a tax rate of less than 15 percent – and six of those super-rich individuals paid nothing at all.

The reason they pay those percentages is because many don’t actually have much earned income. Some have none. Hence, low tax rates. Plus, they are also able to make massive charitable donations, reducing liability. Anyhow, that’s why so many of those rich liberals advocate to raise their income tax rates. They aren’t worried about it.

FOMJ (Friend-of-Morning-Joe) Steve Rattner has also called for similar increases in tax rates for the ultra-wealthy, with particular emphasis on the capital gains tax and dividends rate. As Steve noted in his New York Times oped, “We need at least $4 trillion of long-term debt reduction, with a substantial portion – on the order of $1.2 trillion — coming from new revenues.”

What we really need is about $16 trillion in debt reduction, and, oh, to pay for the unfunded liabilities, which is somewhere between $75 and $200 trillion dollars.

Mr. Rattner advocates a top capital gains rate of 28 percent.

That’s the rate paid during much of the Clinton years, till it was lowered to 20% in 1997. I say, let’s do it. Let’s put all those rich liberals on the hook. Let’s watch them squeal when they realize that their talking points regarding raising their taxes has come home to roost.

If politicians really want to make millionaires and billionaires pay at a tax rate that most of us endure on April 15th, their moral pangs would be soothed more effectively by following Buffett’s minimum tax plan or focusing on raising the tax rates on capital gains and carried interest. As Mr. Buffett told me yesterday, the richest Americans won’t be affected by the President’s plan to push the top marginal income tax rate back to 39.6 percent. It may be a great punchline on the campaign trail, but hiking the top rate will do little to impact the richest of the rich.

Buffet knows that an income tax increase would mean nothing. Raise his capital gains tax? Big.

Would this mean more revenue into the treasury? Depends on how these “evil rich” people respond. Do they invest more and work their portfolio’s to make up for the lost income? Or do they hold back and shelter it? Not cash in their stock? Move it overseas? Not invest in new businesses?

And the second question is, does anyone believe that the government would do anything other than spend any new revenues instead of using it towards debt and deficit reduction?

Read: Joe Scarborough: Hey, Let’s Raise Capital Gains Taxes On Uber-Rich »

Really, who would have thought this would happen?

(UK Telegraph) In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election. (snip)

Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.

With every action, there is some sort of reaction. In this case, those with money take it somewhere else, someplace that would appreciate the investment. Furthermore, those with money will always be able to find ways to shelter it and remove it from taxation. Instead of taxing the “rich”, why not find creative ways to get them to pump the money into the economy? You want them to spend it, you want them to invest it, you want them to create businesses. No, they don’t create businesses to create jobs, they do it to make money for themselves and investors. But, as a sidebar, they create…..jobs!

Does anyone think left leaning Hollywood creates movies to create jobs? No. They generally do it to make money. How about far left Progressive Peter Lewis, owner of Progressive Insurance? Think he’s in it to provide jobs? Nope. To make money.

And what happens when people are working? They are paying taxes. Income taxes to the state and federal governments. Sales tax. Property tax. Wealth is created. Wealth flows. If you tax the hell out of people with money, there will be less money invested, less money in business creation, and, consequently, less money coming in to the treasuries.

Read: Surprise! After Raising Taxes On Millionaires In England, 2/3rds Bolt For Greener Pastures »