Archive for September, 2011

The 1500

Background:
1) Warren Buffett wrote a deceptive op-ed to promote increased taxes on the wealthy
2) Obama proposed the ‘Buffett rule’ to raise taxes on high wage earners (which he called millionaires and billionaires but included people down to 200K salary).
3) The AP published a fact-check showing that high wage earners pay the largest chunk of taxes.
4) When I pointed some liberal friends to that article they replied with a link to a thinkprogress rebuttal.

This then is a rebuttal to that article. And the rebuttal begins by noting that thinkprogress agrees with the AP article then cites one fact from the article to prove their point.
That point? That 1% of people earning a million dollar salary last year paid no federal income taxes.

I’ll detour briefly to point out that thinkprogress has just agreed that million-dollar wage earners do pay the biggest share of taxes, they’ve merely narrowed the field to 99% of those earners.

You’re probably expecting me to debunk the claim about the other 1%. I don’t have access to the data. So instead I will take the bold step of assuming it is true. About 1500 people allegedly made $1,000,000.00 or more in a year and paid no federal income taxes.

Shall we get the pitchforks? Before we do, let’s unwind the dehumanizing effects of the class-warfare rhetoric and think about what we really know about these people.

1) they made 1 million or more in a year
2) they paid no income taxes that year
3) they must have had some pretty hefty deductions to offset that income. Note that I said deductions not loopholes. Loopholes are unintended consequences of tax law. Deductions are intentional aspects of the law where the government says that if certain things apply to you then portions of your income should not be taxed. For reasons that will be clear in a moment I am confident these were deductions not loopholes.
4) they did not get snared by the alternative minimum tax. The AMT can affect people with incomes down to the low 6 figures. So whichever deductions these people used were of sufficient significance to supersede the AMT.
5) it’s a safe bet that most of these 1500 were audited and found in compliance.

So I am comfortable that these 1500 used valid deductions and don’t deserve to be demonized. Further, they don’t deserve to have those deductions cancelled just because their income crossed an arbitrary threshold

It is also worth noting that–since these people are surely just barely over the 1 million mark–imposing an AAMT, as it were, would raise just under a half billion dollars. There was a time that a half-bil was a lot of money to the Feds. That time is gone.

My challenge then, to those who support the Buffett rule: find just one of these 1500 people. Determine what deduction(s) they used to offset their income. Then convince me, and the rest of the country that those deductions, though perfectly valid for people making 50K, 100K, 300K, and even 999K, should not be valid for people making 1000K.

If you cannot do that, then the Buffett rule is not the correct solution to the problem you perceive.

[note: this is my first wordpress blog post and was written using the iPhone app. Much to learn in terms of posting format, tools available, etc.]

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First message from pundit-errant

Welcome! I intend this blog to be mostly political but I’m sure I’ll touch many other topics as well. The title of pundit-errant is meant to indicate that I’m willing to go all sorts of places in conversation