The ‘Buffett Rule’ For Millionaires – Would It Work?

President Barack Obama and Warren Buffett in t...
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Warren Buffet is a known millionaire – one that has worked his way through life and followed the tax rules. He has many employees. Recently, attention has been called to the fact that his secretary pays less in taxes (or is put to a lower tax rate than he).

Those that see this as impossible simply have not looked at the various head’s of company’s in the past. Yes, they make more money, but yes, they are responsible for a lot more and have to determine how to pay all the bills for a company, hire many employees and allocate benefits for those that work for them. This is why they are able to decrease their taxes because they have businesses and therefore have tax loops and breaks.

Having a business is how the world works. If no one is able to own a business because it is too expensive, then less people have work. One company may employ a variety of people. Their expenses are astronomical. By putting enormous tax burdens on employers, the employment situation will get very dire, more than it already is.

The “Warren Buffett Rule” takes place only in a society where everyone would be consider to make equal wages and pay out equally for where they work. Since that will never be the case, it would simply be impossible to do. By super taxing the very rich and those that own companies and strange predicament would happen. More people would lose their jobs because it would simply have to be.

Fair tax breaks for companies is the only clear way to keep an economy solvent. When companies can’t afford to pay people to work, then the people without jobs can’t afford to do anything and that stops the economy, putting it at far more peril than if people were employed.

The richest people spend more money. They keep a lot of things afloat when they go about vacationing and dining in expensive places. Taxing them enormously will keep them from doing what they need or want to do. When they are out and about they keep many people working in all different industries. That is the way that it will work to the benefit of most people.

Next time someone wants to know how much another is paying in taxes, the clear safe bet is to do your own, pay your own and be glad you have a job. The minute that a person succumbs to the argument of making the rich pay more than the poor, will in turn cause the poorest of all to become unemployed, virtually creating a mere depression of sorts.

The taxes should remain the same, at least for now. More jobs will have promise without raising any taxes. In fact, the more jobs that are created, the better the economy will improve. Otherwise there will be an economic disaster.

Michelle Heyward is a financial advisor, and helps consumers plan for greener pastures.  Did you know you can often save twenty percent on your auto insurance premiums by simply shopping around?  Visit Kanetix to do an auto insurance rate comparison.

Buffett Calls for Super Rich to Pay their Way

Warren Buffett has once again called for the Super Rich to be made to pay more taxes by Washington. Writing in an editorial piece for the New York Times Buffett declares that it is time the super rich played their part in the needed ‘shared sacrifice’ of our times and called for Congress to increase taxes on ‘millionaires and billionaires.’

In a passionate and persuasive editorial he points out that while most poor and middle class Americans are struggling, the mega-rich continue to enjoy incredible tax breaks. He notes that people like investment managers, who earn billions of dollars, are allowed to class their earnings as ‘carried interest’ which is taxed at a wonderful 15% rate of tax. In addition he notes that others get hold of stock index futures for around ten minutes and then have roughly 60% of their gains subject to tax at that same bargain 15%, as though they were long term investors.

Decrying the fact that Washington seems to be compelled to protect the superrich as if they were an endangered species, Buffett suggests instead that:

“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…”

Some people have pointed out the hypocrisy of Buffett calling for these super rich tax increases when only a few weeks before he had been lecturing the President on the fact that he was scapegoating private jet companies and the private jet industry.

But on the whole, most people agree with him and when Warren Buffett thinks the rich should be paying more taxes, it is perhaps time to listen.

Alex is a freelance journalist and financial blogger. He loves to write about baseball and jazz but spends most of his days writing about mortgages, markets and umbrella companies .