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|Subject: Re: Is your 401(k) Inadequate For Retirement||Date: 8/2/2008 4:17 PM|
|Author: ChurchyLaFemme||Number: 13770 of 20147|
That's why capital should be taxed lightly. It creates jobs, which in turn leads to lots of other taxes being paid. None of Buffet's employees created a single job.
Sure they did. The bought groceries, cars, houses, TV's, may have paid somebody to mow their lawns, etc. That creates jobs as well. 2/3 of the economy is powered by consumer spending.
Without you, they would not have had the work. Without them, you would have found a different electrician, plumber and carpenter. You were the more valuable participant in the interaction because you created their livelihood. Their taxes should be based on their earned income. Yours should be based on whatever kind of income you receive. If you earned money in the past, paid taxes on those earnings, then chose to risk some of what was left over by investing in, say, stocks, and made a gain, you should be taxed lightly on that gain because you took a risk and your investment helped do the kinds of things that Buffet has done.
I was the more valuable participant? Why, because hiring them makes me superior somehow? Without them (and it doesn't matter who it was), I wouldn't have gotten as much done. As it happens, I happen to know all these guys and wouldn't hire anyone else without a serious recommendation. People aren't just "resources" to be used up and tossed aside. I hire them because they're good at what they do. They work for me because they know they'll get paid on time and in full and that I'll cooperate. They also know I'm a good customer who doesn't moan, whine and kvetch about things.
What's the big deal with taxing capital? It's already taxed at a lower rate than income. For this year and the 2 subsequent ones, I will pay no taxes (with restrictions) on capital gains should I choose. As a matter of fact, 2008's "allotment" has already been used up. Even when LTCG was taxed at 28%, it was still below the marginal income tax rate for most people having significant assets and high income.
Even without the realization of capital gains, I pay less in taxes than people at the same income level who have earned income simply because unearned income is not subject to the regressive payroll taxes for SS and Medicare. Quitting the work force was the biggest single tax cut I've gotten until the 0% LTCG rule kicked in for 2008, 09, 10.
You should stop worshipping Buffett, especially since he doesn't worship himself or regard himself the way the late Leona Helmsley regarded herself. If you want to worship a billionaire, worship Larry Ellison, the founder and CEO of Oracle. The joke in Silicon Valley is that the difference between Larry Ellison and God is that God doesn't delude Himself that he's Larry Ellison.
You want to think of yourself as superior to working stiffs because you've "made" it and they haven't, have at it. Useless advice, most likely, since that's apparently the attitude you have anyhow. Me, I prefer a bit more humility, a bit more empathy and a bit more compassion. Not every one can be an Übermensch.
28% marginal last year (AMT rate). Probably 15% this year.
Wife retiring from the workforce?
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