5.02.2008

Taxing and Fairness

Freakonomics takes on taxing and fairness for wealthy vs working people here:

So that got me to thinking about how fair the tax system really is. Do the well-off pay their fair share, or do they also deserve a tax break?

Well, let’s start with the ultra-rich. Bajillionaire Warren Buffett has argued that he isn’t being asked to pay his share. He went around his office, asking people what share of their income they pay in income taxes. Buffett’s 17.7 percent tax rate compared a bit too favorably with the 30 percent tax rate paid by his secretary.

So it appears that the tax system favors the super-rich over working stiffs.

And Buffett went a step further, putting his money where his mouth is. Last November he issued a challenge to his fellow billionaires:

I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists.

So far, no-one has taken him up on this bet.

2 comments:

Cheryl Hentz said...

Jef,

On this very topic, the current episode of "Eye on Oshkosh" features two men from the Institute for Wisconsin's Future, which is seeking to close the corporate tax loopholes for some of the nation's largest companies doing business in Wisconsin, yet not paying any corporate income tax. The show has been running all week and can be seen tomorrow (Saturday) at 6 p.m. on Oshkosh's cable access channel 2, but I'm sure we will be repeating it in the near future. More information on this problem and what the IWF is doing about it can be found at the web site for the Institute for Wisconsin's Future.

Eric said...

Jef,

What we need is capital gains indexing. No one would argue that the lower capital gains rate is a bad idea for the average person's 401k. It makes no sense though for the ultra-rich to pay such a low rate for their base income. Perhaps start the capital gains rate at a lower percentage than current for the least wealthy and a slowly rachet it up until we get to those with $500K income paying the standard 33%.