Stop Coddling the rich

Stop Coddling the Super-RichBy WARREN E. BUFFETT
Published: August 14, 2011
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Kelly Blair
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Times Topic: Income Tax
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Editorial: The Truth About Taxes (August 7, 2011) OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

Raising the S

There where two competing groups. One wanted to exploit and enjoy the resources that came with the power of winning an election. Or as they put it "to the victah goes da spoils"

The other wanted to raise the S. The others had been outside the walls that existed and believed it could get better- and that in any case the explotation and corruption was not working.

The S was really down and hurting. To some it meant Slum to others Scum ... there was little question that it meant the white trash of the Boston area to many outsiders...
Much of that was not deserved. But some of the pols

this is the crap we dont accept

See article below ... I think we can write a comparable tale...

The sums are little smaller (so far/ and/ or that we know about)... but the end result seems quite similiar... Taking money from a senior and then not reporting it as income ...

Looks like that could be two possible felonies.... wonder if anyone we know should be concerned about that?

One dime away...



By David Abel, Globe Staff
The elected tax assessor of Needham was arraigned in federal district court today on charges he failed to pay more than $100,000 in taxes on money he allegedly filched from an elderly woman, prosecutors said.

Kevin Foley, 53, who is also a longtime firefighter in Needham, pleaded not guilty to three counts of “willfully attempt[ing] to evade and defeat the income tax due … by concealing and attempting to conceal from all proper officers of the United States of America his true and correct income.”

“I wish not to comment,” Foley said after claiming to be indigent and in need of a public defender. A public defender representing him today declined to comment.

He was released on $50,000 bail and on condition that he have no contact with a 77-year old Needham woman, whom he allegedly stole money from, or her family.

Assistant US Attorney Robert A. Fisher said in court that Foley has failed to pay his taxes over the past 20 years.

“That’s including taxes on legally earned income,” Fisher said, noting Foley knew the woman well.

In the indictment, a grand jury charged that Foley withdrew cash from the woman’s bank accounts and purchased money orders for his personal use; endorsed checks drawn from her bank accounts to pay personal expenses including his mortgage; transferred money from her account to his bank accounts; used her ATM card to withdraw money for his own use; and withdrew money from her account to purchase a cashier’s check, which he used to by a boat for himself.

The indictment alleges Foley failed to pay $115,552 on nearly $500,000 in income between June 2006 and April 2010.

Neither the alleged victim nor her family members could be reached for comment.

Needham Town Manager Kate Fitzpatrick said the town is reviewing the charges and will decide soon whether he should be suspended from his position as a firefighter, which he has been since 1987. He was elected tax assessor in 2007.

“The town’s expectation is that our employees will conduct themselves to the highest moral and ethical standards, and we will act expeditiously to address illegal activity or other improper conduct,” she said in a statement.

If convicted, Foley could be sentenced to a maximum of 15 years in prison and be required to repay the taxes he owes.

He will have to reappear in court on June 16.

Shitting where you eat

As long as you did not take from your family or one of us then you could still be a good guy. If you robbed a bank, took payoffs, or had a no show job. That was OK and you could still be a good guy as long you could be counted on when it mattered. That is you where a stand up person.

The fakers where also held in low regard. These where the people who said all the right things but did not show up for the stand out ... hold the coffee party ... or otherwise get involved.

He's a good guy

One thing that always concerned Somervillians was whether someone was a "good guy".

This was the gut check on whether this person could be trusted- or was accepting of what it was- And, if he or she would be with you when it mattered.

Gratitude

One of lifes best learned lessons is being grateful for what we have. And, that we appreciate our gifts by making best use of them..

Be ready to recieve by listening - believing- embracing the messages and gifts.

One joy of life is that each of us is unique. We see things and experience things in a way that no one else does. If we want to keep this then giving it away seems to be a good approach.

Direction, Decisions, and follow through

The first step is knowing where we want to be. Its clear that making the right decisions are the most efficient and best path. But sometimes we make the wrong decision. When we do the best approach is to recognize that a change is needed. And the sooner we recognize and make the correction the more likely we are to get on the path we want.

It was not always clear where Somerville wanted to be. In some minds it was a city that did not deserve much and was happy being the runt of the litter. In others it was simply a city of opportunity to rape and pillage the terrain for personal gain- and what better than to have elected leaders who could be bought and dance on the end of the payoff string.

The revolution came with Lester. He saw an opportunity that was lurking in the minds of many. And he was swept into office.

The class of 1980

The reconcilation of the city was to come with the election Mike Capuano. Not a Lester Ralph person... a Somervillian with roots in the city who could be trusted... and an intellect with integrity who would not be bought.