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CrazyKball

CrazyKball
Location
Kentucky,
Birthday
October 27
Bio
Father, Husband, Reader, Writer, Lawyer and Banker. For the record, I'm not crazy. I have a dog named Cannonball. He is an 85 pound black standard poodle. He is KBall for short. His smaller sister is Penny. I like my privacy. I want to write about things that matter to me without attribution. I have a job that I like and my company would not want my opinions to upset my clients. I am a liberal democrat that is fed up with politicians that only want to keep their jobs and their power. I am not just an athiest, I am an ex-catholic. There is no god. We are mammals and prove that fact every day. The earth will be better off when we are extinct. Someday, very soon by any relative measurement of time, I will be ashes, a nutrient for the soil. Only my descendants will remember me, and only for a generation or so. In fifty thousand years, the earth will begin to heal itself from our largess, once the last of us have fallen or escaped the planet. It matters to me that no one reads my blog. I would like an audience of appreciative fans who challenge me and call me on my bullshit. But that is not likely to happen. I am not a nihilist. I have a son. If you have a child, you can't pretend you don't care about society, politics, religion, history, science, injustice, intolerance, war, famine and disease. You have to care because you care about your child. So even though, he too, will die and be nothing very soon, I want things for him, many, many things. I love and cherish my son, my wife, my reputation, my career, our health, and my dogs (not always in that order). I care about children who suffer, preserving nature, peace in all its forms, tolerance of our many differences, and learning as much as I can about everything. I realize that my embrace of mortality and impermanance means that no effort of humanity endures. No matter. My moral belief is in our duty toward our planet and each other. I am happiest when I lift another up or preserve or appreciate joy and beauty. And my happiness from these things spreads to others. It doesn't last, so I keep at it, everyday. At the end of my time, what little there is, no one will soon recall me or what I did, good and bad, and that's okay by me as long as I know I am doing my best with what I am and what time I have. In the end, I am the only judge that matters and my final verdict is lost with me anyway.

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Salon.com
OCTOBER 17, 2011 4:45PM

Buffett's Rule is No Big Deal

Rate: 0 Flag

Warren Buffet says that he pays less income taxes by percentage of income than his secretary.  He wants an income tax surcharge of about 5% created for persons earning over $1 million in a year, and he wants to apply it to earnings and investment income such as qualified dividends and long term capital gains currently taxed at just 15% regardless of the taxpayer's modified adjusted gross income (MAGI - this is the actual bottomline upon which the tax table is applied, after all deductions and credits).

 

Pundits and politicians have been going bonkers over this.   

 

Let's make sure this is in proper perspective.  If a nuerosurgeon's MAGI is $1,000,000 a year, all from her medical practice, she pays 35% on all of this income above about $380,000.    So she pays $320,00 in federal tax.  That is an actual tax rate of 32%.  

 

Oh, and if she lives in Kentucky, she pays 6% state tax and about 2.5% local taxes, another $95,000.  Oh, and she pays social security and medicare tax, another 10.4% for SSA (she's self employed) up to $106,800 and 2.9% for Medicare, total $25,600. 

 

So, altogether she pays  $440,600 is taxes, not counting property taxes, sales taxes, auto taxes, insurance taxes, airline taxes, alcohol taxes, cigarette taxes, gas taxes, and various other taxes, some voluntary and some not.

 

Now, our neurosurgeon earning $1 million this year, pays 44% in taxes.  Her income is definitely among the very highest in the country. 

 

Let's say that she also earned another $500,000 in dividend and long term capital gains.  The proposal is that this money be taxed at 15%, plus Buffett's extra 5%, or 20% total.  The same rate that applied to everyone before the Bush tax cuts in 2003.  Big deal!

 

My point is that high earners do pay a great deal in taxes.  But Buffett's proposal doesn't even return the tax code the rates that applied in 2002.  This is not the big deal people are making it out to be. 

 

Guess what the highest tax rate was in 1980?  70% for all earnings over $215,000.  Sounds high?  In 1960, it was 91% on all earnings over $400,000. 

 

Just saying...

  

 

 

 

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As you point out In 1960 the tax rate for incomes over $400,000 (inflation adjusted $3.19 million) was 91%. We have regressed a long way. About the neurosurgeon: By the time he or she takes advantage of all the allowed deductions, the actual rate paid will be a lot less. All the same, I agree with you Buffet's rule is no big deal.