Warren Buffett Says its Fair to Raise Taxes on Rich

Discussion in 'Economy' started by Toro, Jun 29, 2007.

  1. Toro
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    Toro Diamond Member

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    Buffett is, of course, the world's greatest investor.

    http://www.washingtonpost.com/wp-dyn/content/article/2007/06/27/AR2007062700097.html

    And a rebuttal from Greg Mankiw

    http://gregmankiw.blogspot.com/2007/06/mr-buffetts-tax-bill.html
     
  2. Care4all
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    Care4all Warrior Princess Supporting Member

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    i disagree that he ignored the corporate taxes and should have added them to his taxes.

    for example, he owns a shoe company that produces comfort sandals for women... the estimated corporate taxes that the shoe company will have to pay, is incorporated in to the wholesale price of the shoe....thus, it is the consumer that pay's the company's taxes, or corporations taxes, NOT the stockholders, could be argued successfully.

    care
     
  3. RetiredGySgt
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    RetiredGySgt Platinum Member

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    Let me see if I have this right.... Companies added the amount of projected corporate taxes to the sale price of merchandise and services they render, is that your claim?

    Now I am no tax expert but as I understand it, the TAXES they pay are based on how much they MADE. So it would seem to me, that charging MORE to cover future taxes would in fact cause MORE taxes to be taken from the Corporation.
     
  4. Toro
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    Toro Diamond Member

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    Who ultimately pays for a corporate tax - the shareholders or the consumer - is dependent upon the elasticity of the demand curve, i.e. its slope. In other words, the less price responsive demand is to changes in price, the more the consumer will pay the tax - think cigarettes and gas - and the more responsive demand is to change in the price, the more the shareholders will pay. In reality, it is somewhere in between.
     
  5. Care4all
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    Care4all Warrior Princess Supporting Member

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    That makes sense!
     
  6. red states rule
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    red states rule Senior Member

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  7. red states rule
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    red states rule Senior Member

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    The companies know what their taxes will be - they simply raise the price of their goods to cover

    The tax is based on their profit not their gross sales

    When the cost of doing business goes up, the companies will find a way to cover the expense - not at the expense of their bottom line
     
  8. Toro
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    Toro Diamond Member

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    They don't.

    That's the point.

    Truly wealthy people are not burdened by the tax on their salary. Their salary is relatively low compared to their total compensation. Instead, their large gains are derived from dividends (taxed at 15%) and capital gains (taxed at 15% long-term).
     
  9. Toro
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    Toro Diamond Member

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    That is not necessarily correct.

    Sales tax is taxed on revenues, for example.

    Also, the effect of a tax on corporations depends on the slope of the demand and supply curves.

    Eventually, all corporate taxes are borne by people. However, who are effected by the tax differs.
     
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  10. red states rule
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    red states rule Senior Member

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    We are talking about corporate income taxes

    The folks who buy their products and services pay the taxes

    Libs will never understand when they attack business and add to the cost of doing business - it is a tax on the people
     

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