Warren Buffett: Stop Coddling the Super-Rich

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    Aug 15, 2011 10:39 AM GMT
    The complete column can be read at http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?ref=opinion&pagewanted=print. Excerpts below.

    New York Times
    August 14, 2011
    Stop Coddling the Super-Rich
    By WARREN E. BUFFETT
    Omaha

    OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

    While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

    ... Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

    If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

    To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

    Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

    I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.
  • rnch

    Posts: 11524

    Aug 15, 2011 10:46 AM GMT
    southbeach jane, riddler and/or socalfitness protesting this thread in 5...4...3...2...1...



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  • GQjock

    Posts: 11649

    Aug 15, 2011 11:34 AM GMT
    Coddling???

    When public sector jobs are being shredded faster than they have been since the Great depression
    when we are contemplating raising the retirement age
    when we are talking about cutting back on Social security benefits and medicare and Medicaid coverage

    ..... and we're allowing the top 2% in this country to continue to hold on to billions of tax cuts that broke this country??

    Who's Coddling????
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    Aug 15, 2011 11:43 AM GMT
    GQjock saidCoddling???

    When public sector jobs are being shredded faster than they have been since the Great depression
    when we are contemplating raising the retirement age
    when we are talking about cutting back on Social security benefits and medicare and Medicaid coverage

    ..... and we're allowing the top 2% in this country to continue to hold on to billions of tax cuts that broke this country??

    Who's Coddling????


    Everything you write suggests that you're in agreement with Buffett. Are you just questioning his word choice? It seems to me a pretty apt word.
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    Aug 15, 2011 11:55 AM GMT
    No protest. Just wondering why Warren Buffett doesn't volunteer to pay higher taxes. It's all well and good to argue that others should be taxed more and to forget the fact that the primary reason Buffett isn't taxed higher is because he is taxed primarily through capital gains and not income taxes, but why don't we see more altruism by those who voluntarily give more money to the government?

    I mean it makes sense - if government spends money so altruistically and so efficiently, why do people just pay the minimum given there is an explicit line item on tax returns in the US (and Canada) that allow you to contribute more?
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    Aug 15, 2011 12:00 PM GMT
    riddler78 saidNo protest. Just wondering why Warren Buffett doesn't volunteer to pay higher taxes. It's all well and good to argue that others should be taxed more and to forget the fact that the primary reason Buffett isn't taxed higher is because he is taxed primarily through capital gains and not income taxes, but why don't we see more altruism by those who voluntarily give more money to the government?

    I mean it makes sense - if government spends money so altruistically and so efficiently, why do people just pay the minimum given there is an explicit line item on tax returns in the US (and Canada) that allow you to contribute more?


    Well, if Michelle Bachmann can rail against the passing of the stimulus bill but still actively lobby for funds from the bill, then Buffett can say that the super-rich should pay more and not actually do it.

    Who's forgetting that the primary reason Buffett isn't taxed more is because he's taxed primarily through capital gains as opposed to income?
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    Aug 15, 2011 12:03 PM GMT
    theatrengym said
    riddler78 saidNo protest. Just wondering why Warren Buffett doesn't volunteer to pay higher taxes. It's all well and good to argue that others should be taxed more and to forget the fact that the primary reason Buffett isn't taxed higher is because he is taxed primarily through capital gains and not income taxes, but why don't we see more altruism by those who voluntarily give more money to the government?

    I mean it makes sense - if government spends money so altruistically and so efficiently, why do people just pay the minimum given there is an explicit line item on tax returns in the US (and Canada) that allow you to contribute more?


    Well, if Michelle Bachmann can rail against the passing of the stimulus bill but still actively lobby for funds from the bill, then Buffett can say that the super-rich should pay more and not actually do it.

    Who's forgetting that the primary reason Buffett isn't taxed more is because he's taxed primarily through capital gains as opposed to income?


    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.
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    Aug 15, 2011 12:11 PM GMT
    riddler78 said
    theatrengym said
    riddler78 saidNo protest. Just wondering why Warren Buffett doesn't volunteer to pay higher taxes. It's all well and good to argue that others should be taxed more and to forget the fact that the primary reason Buffett isn't taxed higher is because he is taxed primarily through capital gains and not income taxes, but why don't we see more altruism by those who voluntarily give more money to the government?

    I mean it makes sense - if government spends money so altruistically and so efficiently, why do people just pay the minimum given there is an explicit line item on tax returns in the US (and Canada) that allow you to contribute more?


    Well, if Michelle Bachmann can rail against the passing of the stimulus bill but still actively lobby for funds from the bill, then Buffett can say that the super-rich should pay more and not actually do it.

    Who's forgetting that the primary reason Buffett isn't taxed more is because he's taxed primarily through capital gains as opposed to income?


    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    What a strawman argument, riddler. The debate has not just centered on income but also loopholes like carried interest. And the idea that Buffett is undermining his own argument by not paying more taxes voluntarily is also silly.

    Why not deal with the substance of his op-ed instead.
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    Aug 15, 2011 12:16 PM GMT
    Christian73 said
    riddler78 said
    theatrengym said
    riddler78 saidNo protest. Just wondering why Warren Buffett doesn't volunteer to pay higher taxes. It's all well and good to argue that others should be taxed more and to forget the fact that the primary reason Buffett isn't taxed higher is because he is taxed primarily through capital gains and not income taxes, but why don't we see more altruism by those who voluntarily give more money to the government?

    I mean it makes sense - if government spends money so altruistically and so efficiently, why do people just pay the minimum given there is an explicit line item on tax returns in the US (and Canada) that allow you to contribute more?


    Well, if Michelle Bachmann can rail against the passing of the stimulus bill but still actively lobby for funds from the bill, then Buffett can say that the super-rich should pay more and not actually do it.

    Who's forgetting that the primary reason Buffett isn't taxed more is because he's taxed primarily through capital gains as opposed to income?


    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    What a strawman argument, riddler. The debate has not just centered on income but also loopholes like carried interest. And the idea that Buffett is undermining his own argument by not paying more taxes voluntarily is also silly.

    Why not deal with the substance of his op-ed instead.


    Strawman argument? At best it's an ad hominem but it's not because it deals directly with the fact he is asking others to do as he says but not as he does. As for carried interest, this would likely not change his level of taxation either which comes from dividends and capital gains from Berkshire. Call it silly all you like, it doesn't make it any less true.
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    Aug 15, 2011 12:25 PM GMT
    riddler78 said
    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    Huh? I love the way you throw the word "hypocrisy" in there. I'm sorry but it's responses like that which have made me feel like it's not generally worthwhile responding to you. To me, that's not a serious or substantive response but an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.
  • rnch

    Posts: 11524

    Aug 15, 2011 12:26 PM GMT
    Christian73 said...Why not deal with the substance of his op-ed instead.


    because rid, like most of us, only read/see what they want to read/see.


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  • rnch

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    Aug 15, 2011 12:30 PM GMT
    theatrengym said.... an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.


    as is a lot of the GOP/teabagger's response to undebateable, hard numbers facts.

    confuse, diffuse, change the topic to emotional hot button issues...THIS is a page out of the GOP/teabaggger's game plan book.

    one of the reasons why they will be shot down in the next elections.
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    Aug 15, 2011 12:43 PM GMT
    theatrengym said
    riddler78 said
    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    Huh? I love the way you throw the word "hypocrisy" in there. I'm sorry but it's responses like that which have made me feel like it's not generally worthwhile responding to you. To me, that's not a serious or substantive response but an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.


    It's not your hypocrisy - you've done nothing hypocritical to my knowledge. It's Warren Buffett's hypocrisy - by definition.

    That said, those who argue for higher taxes are rarely arguing for themselves to pay for higher taxes, but that of others.
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    Aug 15, 2011 12:59 PM GMT
    riddler78 said
    theatrengym said
    riddler78 said
    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    Huh? I love the way you throw the word "hypocrisy" in there. I'm sorry but it's responses like that which have made me feel like it's not generally worthwhile responding to you. To me, that's not a serious or substantive response but an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.


    It's not your hypocrisy - you've done nothing hypocritical to my knowledge. It's Warren Buffett's hypocrisy - by definition.

    That said, those who argue for higher taxes are rarely arguing for themselves to pay for higher taxes, but that of others.


    Except in this case, Buffett is calling for higher taxes on himself and his peers. In fact, a number of us on RJ have argued for increased rates that would directly impact our own taxes. Don't project your own selfishness on others.
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    Aug 15, 2011 1:08 PM GMT
    Christian73 said
    riddler78 said
    theatrengym said
    riddler78 said
    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    Huh? I love the way you throw the word "hypocrisy" in there. I'm sorry but it's responses like that which have made me feel like it's not generally worthwhile responding to you. To me, that's not a serious or substantive response but an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.


    It's not your hypocrisy - you've done nothing hypocritical to my knowledge. It's Warren Buffett's hypocrisy - by definition.

    That said, those who argue for higher taxes are rarely arguing for themselves to pay for higher taxes, but that of others.


    Except in this case, Buffett is calling for higher taxes on himself and his peers. In fact, a number of us on RJ have argued for increased rates that would directly impact our own taxes. Don't project your own selfishness on others.


    Then why would you not be willing to pay more than the minimum?
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    Aug 15, 2011 1:22 PM GMT
    riddler78 said
    Christian73 said
    riddler78 said
    theatrengym said
    riddler78 said
    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    Huh? I love the way you throw the word "hypocrisy" in there. I'm sorry but it's responses like that which have made me feel like it's not generally worthwhile responding to you. To me, that's not a serious or substantive response but an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.


    It's not your hypocrisy - you've done nothing hypocritical to my knowledge. It's Warren Buffett's hypocrisy - by definition.

    That said, those who argue for higher taxes are rarely arguing for themselves to pay for higher taxes, but that of others.


    Except in this case, Buffett is calling for higher taxes on himself and his peers. In fact, a number of us on RJ have argued for increased rates that would directly impact our own taxes. Don't project your own selfishness on others.


    Then why would you not be willing to pay more than the minimum?



    Buffet is calling upon everyone to pay their fair share, not ad-hoc volunteering.
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    Aug 15, 2011 1:26 PM GMT
    meninlove said
    riddler78 said
    Christian73 said
    riddler78 said
    theatrengym said
    riddler78 said
    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.


    Huh? I love the way you throw the word "hypocrisy" in there. I'm sorry but it's responses like that which have made me feel like it's not generally worthwhile responding to you. To me, that's not a serious or substantive response but an attempt to put me on the defensive by throwing a charged word in there. It's a cheap and quite transparent rhetorical trick.


    It's not your hypocrisy - you've done nothing hypocritical to my knowledge. It's Warren Buffett's hypocrisy - by definition.

    That said, those who argue for higher taxes are rarely arguing for themselves to pay for higher taxes, but that of others.


    Except in this case, Buffett is calling for higher taxes on himself and his peers. In fact, a number of us on RJ have argued for increased rates that would directly impact our own taxes. Don't project your own selfishness on others.


    Then why would you not be willing to pay more than the minimum?



    Buffet is calling upon everyone to pay their fair share, not ad-hoc volunteering.


    How do you define "fair share"? And why doesn't he set an example? The US depends disproportionately more on high income earners for their tax base than any other OECD country. One step I think we could all agree on as a starting point though would be to eliminate ad hoc tax breaks and a flatter tax but that reduces the opportunity for graft politicians of all stripes crave.
  • Lincsbear

    Posts: 2605

    Aug 15, 2011 1:48 PM GMT
    The situation here in Great Britain seems similar to the USA.Politicians talk eloquently of a 'we`re all in this together',but the burden`s falling disproportionately on middle and low income people when you examine the fine print of their proposals.
    The rich(or their proxies-mostly politicians) can always find reasons why someone else should pay more tax,but not them.
    The culture of 'selfish individualism' will always favour the rich at the expense of the poorer members of society.
  • rnch

    Posts: 11524

    Aug 15, 2011 3:07 PM GMT
    [quote][cite]meninlove said... Buffet is calling upon everyone to pay their fair share, not ad-hoc volunteering. [/quote]


    EXCELLENT reply icon_exclaim.gif


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    Aug 15, 2011 4:42 PM GMT
    rnch said
    Christian73 said...Why not deal with the substance of his op-ed instead.


    because rid, like most of us, only read/see what they want to read/see.


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    Why don't you deal with the substance of his op-ed?

    Lets deal with the substance of his op-ed.

    Warren Buffett has a horse in this race, because he makes billions of dollars off those "rich" who supposedly don't pay their fair share of income taxes ( which Warren Buuffett doesn't pay) because Berkshire-Hathaway owns insurance companies who's business it is to help with tax mitigation and estate planning. So a rise in income taxes or a change in the estate tax brings more revenues to his holdings. For that reason alone he has no credibility on this issue.

    Warren Buffett refers to raising income taxes and refers to the income taxes he paid, all the while knowing his deception. Warren Buffett does not pay Income taxes, he pays a capital gains tax and raising income tax rates will have no affect on him since the bulk of his income is in the form of capital gains.

    Warren Buffett also knows the hypocrisy of what he says will not be challenged because those he says it to have an agenda similar to his and most people like you don't look far enough into what he says to see his hypocrisy. Warren Buffett holds the bulk of his wealth in unappreciated stocks in Berkshire-Hathaway. What that means is that his wealth is sheltered from taxes because it can't be taxed until it is sold. So when you hear about how much Warren gives to the Bill and Melinda Gates foundation, what you don't hear about is that he gives unappreciated stocks for which he pays no taxes, the foundation pays no taxes when it converts the stock into cash because it is tax exempt , but Warren gets a big write off on his taxes because of the charitable give away ( Warren, BTW isn't against the charitable deductions in the tax code).

    When Warren passes what he chooses to pass along to his heirs, the same concept will be in place. Warren's heirs will pay no estate tax on the bulk of his estate because they will receive unappreciated shares in Berkshire-Hathaway, which will give his heirs both a tax free estate and a means of income through capital gains.

    The fact that Warren uses income tax throughout the piece when what he means is capital gains tax is rather telling. The fact that Warren only hints at the difference between passive and active income earners without explaining it is even more telling. People like Warren are passive income earners who earn the bulk of their income from investments (capital gains). Active income earners are those people who either earn their income in the employ of another or through their own businesses and pay their taxes at the income tax rates and not the capital gains rate. To include both types of earners in the same category is disingenuous.

    So why is it that you, Warren and other liberals don't actually deal with the substance of his op-ed ?

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    Aug 15, 2011 7:09 PM GMT
    riddler78 said
    theatrengym said
    riddler78 saidNo protest. Just wondering why Warren Buffett doesn't volunteer to pay higher taxes. It's all well and good to argue that others should be taxed more and to forget the fact that the primary reason Buffett isn't taxed higher is because he is taxed primarily through capital gains and not income taxes, but why don't we see more altruism by those who voluntarily give more money to the government?

    I mean it makes sense - if government spends money so altruistically and so efficiently, why do people just pay the minimum given there is an explicit line item on tax returns in the US (and Canada) that allow you to contribute more?


    Well, if Michelle Bachmann can rail against the passing of the stimulus bill but still actively lobby for funds from the bill, then Buffett can say that the super-rich should pay more and not actually do it.

    Who's forgetting that the primary reason Buffett isn't taxed more is because he's taxed primarily through capital gains as opposed to income?


    All of the "taxes on the rich" debate has centered around income. Just as long as you recognize the hypocrisy, I have no problems with it. It does however undermine his argument that he actually believes in the effectiveness and utility of paying higher taxes.




    Total BS.

    One person - even Warren Buffett - voluntarily paying more taxes, will NOT raise federal revenues enough to make a difference.
    The tax rate on ALL of the richest 1/2-1% of Americans must be raised in order to have any actual impact on raising revenues and reducing the National Debt.
    And the POINT of raising taxes on the wealthy is to pay off the National Debt.
    It's not about being mean to rich people.
    It's just the best way to raise revenues in order get our debt problem under control.

    We need to give Buffett credit for not being an unpatriotic selfish pig like so many of the Republican party's politicans and supporters.
    He's speaking out loudly and clearly about the need to stop coddling the rich.
    And he'll be glad to pay higher taxes after the Bush tax cuts expire in January 2013, just like he paid higher taxes back in the 1990's.
    For the good of our country.

    "Country First", remember?
    Or did you Repubs just use that slogan in 2008 in a dishonest way to try to BS folks into voting Repub?
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    Aug 15, 2011 8:36 PM GMT
    southbeach1500 said
    rickrick91 said
    The tax rate on ALL of the richest 1/2-1% of Americans must be raised in order to have any actual impact on raising revenues and reducing the National Debt.


    RickRick,

    The totality of the Bush tax cuts on an annual basis is about $60 billion.

    This year Obama-Pelosi-Reid are adding $1,650 billion to the debt.

    Please do the math and come up with a different rant so I don't have to keep correcting you on this point over and over and over again. Thanks.




    FYI - "the totality" of extending the Bush tax cuts over ten years would be 3.3 trillion dollars.
    http://thehill.com/blogs/on-the-money/domestic-taxes/117021-pew-outlines-cost-projections-for-extending-bush-tax-cus

    Our National Debt is already too damn big.
    We just can't afford to extend the Bush tax cuts.
    We need to work on REDUCING the National Debt, not be recklessly adding trillions of dollars of new debt in tax cuts to the rich that have a proven track record of failing to create a strong economy or to create strong job growth.
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    Aug 15, 2011 9:25 PM GMT
    And no one is stopping Buffett from donating to the government what he thinks is his "fair share". And neither is anyone stopping him from appealing to all of the other billionaires to do the same thing! After all, he already convinced a lot of them to give away most of their fortunes through philanthropy, which was awesome.

    But of course, people on here will still insist that "the super rich" are conspiring to "destroy" all of us. icon_rolleyes.gif
  • rnch

    Posts: 11524

    Aug 16, 2011 2:36 PM GMT
    rickrick91 said
    southbeach1500 said
    rickrick91 said
    The tax rate on ALL of the richest 1/2-1% of Americans must be raised in order to have any actual impact on raising revenues and reducing the National Debt.


    RickRick,

    The totality of the Bush tax cuts on an annual basis is about $60 billion.

    This year Obama-Pelosi-Reid are adding $1,650 billion to the debt.

    Please do the math and come up with a different rant so I don't have to keep correcting you on this point over and over and over again. Thanks.




    FYI - "the totality" of extending the Bush tax cuts over ten years would be 3.3 trillion dollars.
    http://thehill.com/blogs/on-the-money/domestic-taxes/117021-pew-outlines-cost-projections-for-extending-bush-tax-cus

    Our National Debt is already too damn big.
    We just can't afford to extend the Bush tax cuts.
    We need to work on REDUCING the National Debt, not be recklessly adding trillions of dollars of new debt in tax cuts to the rich that have a proven track record of failing to create a strong economy or to create strong job growth.





    ONCE AGAIN, southbeach jane is proven to be the innacurate liar that she is here on RJ.


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    Aug 16, 2011 4:14 PM GMT
    The super rich are an untapped source of revenue. When running a business, would you overlook a potential revenue source staring you in the face? No way. I say tax the super rich to high heaven and call that "fair".