You are persisting in reporting figures for federal income taxes only – that’s where you get your 50% of net worth. As show at myn website (http://fairsharetaxes.org), a millionaire investor class family can l easily keep their tax rate (again all taxes) 4% of income and investment gains and 0.4% of net worth. (and that’s despite spending abotu $100,000 per year and still adding to their net worth.)

You are persisting in reporting figures for federal income taxes only – that’s where you get your 50% of net worth. As show at my website, a millionaire investor class family can l easily keep their tax rate (again all taxes) 4% of income and investment gains and 0.4% of net worth. (and that’s despite spending about$100,000 per year and still adding to their net worth.

The 66% of corporations that pay no taxes do it by using the rigged corporate tax codes to eliminate profit on paper for the purposes of the irs filing. Why in the world would more than half the corporations bother to stay in business if they have no profits year after year. The ones that do declare a profits cut their taxes in the same way -they just can’t manage to use the rigged system to get their profits below 0.

Offshoring not an issue? “The Government Accountability Office (GAO), Congress’ investigative watchdog, has found that “a majority of America’s largest publicly traded companies and the U.S. government’s largest federal contractors use multiple subsidiaries in offshore tax havens to conduct business and avoid paying U.S. taxes,”GAO, searching publicly available data filed with the Securities and Exchange Commission, determined that 83 of the 100 largest publicly traded corporations and 63 of the 100 largest federal contractors maintain subsidiaries in countries generally considered havens for avoiding taxes. Dorgan and Levin said they requested the updated report from one several years ago because they are focused on combating offshore tax abuses, which they estimated cause $100 billion in lost U.S. tax revenue each year.”( that’s 8% of the federal deficit for 2011)

Another layman myth? Foreign investors pay taxes on dividends from from US companies only if they are silly enough to use a US broker. And even then they owe no US taxes on capital gains, which probably account for 80% of investment gains on equities. That’s why I think taxes need to be left in place (and made less easy to evade) at the corporate level. Otherwise those foreign investors get a virtually free ride on governement-provided infrastructure that US taxpayers pay for.

Also, ALL foreign investors who buy and sell U.S. assets on U.S. exchanges have a U.S. tax liability. They all pay tax. Now, they may not pay tax in their HOME country, but they certainly do here. Yet another layman myth.

And of course the middle class pays a larger percentage of their wealth in taxes than the wealthy: they have less wealth! That’s a dubious comparison. It is absolutely not true that many middle-class families pay 50% of their net worth in taxes every year, though. Effective tax rates for most middle class households is less than 10% of INCOME (not net worth, income). Mine was only about 12% this year, and I am in the highest-tax group in the nation: single, high-earner, no dependents, no significant write-offs to speak of.

A wealth-based tax would be a monumentally-bad idea. I would never support it.

We need to retain corporate taxes, otherwise foreign investors who have no US tax obligations would get a free ride. They would get the profits from all the economic infrasrtructure the US government (all US taxpayers) provide (Like public education of workers, pensions, roadways, cheap oil, cleanup of pollution, financial industry bailouts, domestic order, national support of basic science research….). Corporate taxes should be reformed eliminate all loopholes and offshoreing of profits, then the rate could be reduced substantially without loss of revenues.

If you take all the different taxes we now pay (income, social security, property, sales, excise) a struggling middle class family can easily pay four times more in taxes than a millionaire couple living off their investments. The working class family’s tax rate on income from work is seven times greater millionaire’s tax rate on investment gains and income. Middle class families often pay more than half their entire wealth (>50% net worth) in total taxes each year, a 2500-fold higher rate than the third richest man in the world, who pays about 0.02% of his net worth in total taxes each year. (For calculations: http://fairsharetaxes.org)

The only way to make taxes fair is to consider wealth, as well as income, in the determination of taxes. If we add tiny wealth tax on the wealthiest 20% (They now hold 87% of the nation’s household wealth), we could eliminate all payroll, sales and property taxes (which all disproportionately burden the middle class), cut income taxes, cut total tax payments by each middle class family by thousands, and eliminate the national deficit. As a demonstration of the power of even a tiny wealth tax: A 1% tax on the portion of any family’s net worth over 1 million dollars would cut the 2011 federal defict by 30%.

All that said I have no problem eliminating personal income taxes on icapital gainss and dividends , providing:
1-Corporate taxes are reformed as outlined above so that they are actually paid
2-Wealth is finally recognised as the major measure of ability to pay and so taxed for the wealthiest 20% or so.

For more, see http://fairsharetaxes.org

1) The first flaw in your argument is that Buffet is “1/3 owner of the company”, that is not true if Berkshire Hathaway is a publicly traded company, which it is (symbol: BRK). Buffet owns 1/3 of the SHARES in that company. NOT the same thing. It grants him voting rights, a measure of control and access to all the desks and buildings he wants should the company go under. He is no more an “owner” of Berkshire Hathaway, however, than I am of Disney despite my owning stock in that company. There’s a reason people call them “shareholders” and not “owners”…they are different things.

Now, if this were a privately held proprietorship, partnership or even some certain form of a limited liability, then the profits of the company are actually the income of the owners (in this sense they actually ARE owners) and thus the tax liability is paid by them. The company doesn’t pay the taxes, aside perhaps from some forms of sales tax, but most states allow exemptions for goods purchased for resale. The owners pay the taxes on their personal tax forms. In this instance, individuals and companies are not taxed twice.

2) As a shareholder, Buffet has made an investment in Berkshire Hathaway. Let’s make the numbers simple so you can keep up. Let’s say a 1/3 ownership of the stock of Berkshire Hathaway costs $1. Buffet has given that money to the company to invest in the company so that it can grow, purchase supplies, improve processes, whatever. With that $1 invested ($1 doesn’t exactly end up going to BH directly, there are fees and other things that chip away, but they’re unimportant for the purposes of this analogy), Berkshire Hathaway decides to purchase a bag of potato chips from the vending machine as merchandise to sell. Let’s say they then sell that bag for $1.25. Well, then, they’ve made themselves a nice 25% margin on their investment in a bag of chips! That’s not profit, though. Profit is what’s left over after all expenses necessary for that sale to have been completed (shipping, vending machine rental, building rental, employees, insurance, bonuses, etc, etc, etc). Whatever’s left over is then taxed and those taxes are paid for by BH, not Buffet.

But, what about Buffet? Well, he’s sitting on a share of BH that cost him $1. Since sales have been so good for BH, the analysts are happy and decide that the stock price should now be $1.25 (keeping in mind that stock prices have very little in actual common with how well a company performs, it’s more in line with if they’ve performed to the analysts satisfaction). Did Buffet make a profit? Nope, his shares are still only worth $1, that’s what he paid for them. If, however, he decides to sell that share at the higher price, then HE has made a profit 100% independent of the dealings of BH and must pay taxes on that capital gain. If, however, he decides to hold on to the shares, then he pays no taxes…and thus isn’t taxed at all, let alone twice.

I think you need to reread the article you posted, BTW. It specifically states that double taxation occurs when a company pays taxes, and then individuals pay a dividend tax on dividends received. As you stated, BH doesn’t pay a dividend, therefore double taxation does not apply. Your argument has nothing to do with the argument you’re trying to make. You’ve conflated two misunderstandings of how business and taxation work, and it makes it sound like you’re purposefully trying to make the tax situation in the US out to be worse than it actually is. The fact is, for the last 50ish years in the US, the tax brackets have moved very little (+- 2-3% in either direction regardless of which party’s in power) aside from the top-most bracket of which Buffet is a member. But, in recent years, even that’s not the case. An interesting tidbit: the tax rates have typically been higher under Republican Congresses, the bastions of lower taxes. Interesting, right?

Buffet is right, owning shares merely grants you a percentage of the real property should a company fail. Once you own them, you don’t pay taxes on them over and over again. Why would you? If the company makes a profit, it pays taxes on that profit. Buffet doesn’t pay anything at all. Why would he? HE didn’t make any profit. The value of his shares may go up, and his overall worth would go up, but worth isn’t taxable, only income. Since the stock pays no dividends, there is no income. If he SELLS the stocks at a profit, yes, he will pay taxes on that profit. But, that’s external to the company’s taxes or profits.

And, yes, the Enron shareholders felt the burden of their investments shady dealings, but that wasn’t the fault of the government or taxes, it was the fault of the officers of the company. The stock market is legalized gambling with no rules, though. You lose, you lose.