Tax Inequality

Interesting read from the NYT.

Several highlights:

Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

It is no mystery that 10% of ten thousand is not the same as 10% of a hundred thousand or a million. However, I was under the impression that usually the case was that people with higher income paid a higher percentage in taxes. Mr. Buffet's counterexample doesn't prove that this isn't the case, but I can't imagine it is too far from being representative. If anyone has hard figures on this I'd be interested to see them.

By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible.

Another big(er) moral dilemma, but this one is widely known.

The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.”

I think it is also widely known that this simply does not happen. The article gives some more evidence supporting this. Certainly it does not happen by fighting unnecessary wars while giving cost-inefficient (at best) contracts in silver plates to big contractors.