President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010.
In theory, the federal income tax rate is based on the progressive taxation system. A progressive tax is a type of tax system in which the tax rate increases based on level of income. In essence, the wealthy pay a larger tax percentage compared to those with lower incomes. However, as Warrant Buffett’s 2010 tax returns revealed, the federal income tax rate in practice actually decreases on those making significantly large incomes. Buffett earned $63 million last year, yet paid around $7 million in federal income tax and a mere $15,300 in payroll taxes. All said Warren Buffett, who is worth around 50 billion dollars, paid 17.4% in total federal taxes (income and payroll taxes) while the average American worker paid around 33%.
Warren Buffett has been championing increased taxes on wealthy Americans for years. Back in 2007, Buffett offered a million dollars on NBC Nightly News with Tom Brokaw to any member of the Forbes 400 that could prove they paid a greater tax burden than their employees.
“I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average tax rate for the Forbes 400 will be less than the average of their receptionists.”
Not one member of Forbes 400 has taken Mr. Buffett’s million dollar challenge. Greta Van Susteren of FoxNews posted on her blog several ways Warren Buffett could better spend his time by voluntarily paying more taxes.
Meanwhile, the nation is in the middle of a tax debate concerning the exact fairness of the federal tax code. From Herman Cain’s 9-9-9 plan to Occupy Wall Street, the American people are divided on whether or not the American wealthy is paying too much or too little in taxes. However, the majority of the current debate is based on economic theory and political ideology. Should the debate be placed on hold until more members of the top 1% release their tax returns?
Posted in Economic Policy, Taxes, The Budget, The Economy, The Recession, Wall Street
Tagged Buffett, Economic Policy, Forbes, Herman Cain, Tax, Tax rate, Taxes, United States, Warren Buffett
Mitt Romney knows how to treat America’s sick economy with his business experience. (05:38)
Posted in Campaigns, Presidency, The Budget, The Economy, The Recession, Unemployment, Wall Street
Tagged Barack Obama, Budget, Campaigns and Elections, Colbert Report, Economic Policy, Government debt, Mitt Romney, Presidency, Republican, Republicans, Stephen Colbert, unemployment, Wall Street
Working on Wall Street always meant great pay, fabulous perks and year-end bonuses that would make you feel as if you’d won the lottery. But that was before the Great Recession. Now, unemployed traders and bankers are finding out that high-paying jobs are nearly impossible to come by, as layoffs and slow economic growth continue in the finance sector. (10/11/10 ABC News, Tara Murhpy) … Read Article
1. What factor accounts for the lower salary in the financial sector according to Heidi Shierholz?
2. According to Shierholz, unemployment rate is expected to remain high for the next several years. How long before the economy recovers to the pre-recession unemployment rate? How many jobs will it take to maintain a steady unemployment rate relative to the population growth?
In a recent poll MPSL students were asked their opinion about the statement that “The Troubled Asset Relief Program (TARP) helped to prevent another Great Depression.” The result: about 58% Strongly Agree that TARP helped to prevent another Great Depression; about 12% Agree; about 6% Disagree; while 24% Strongly Disagree. In a similar nation-wide poll by the Pew Research/National Journal Congressional Connection, 38% of Americans think that the loans to the banks helped to prevent a more severe economic crisis; 54% think it did not help; while 8% is unsure.
Critics of the Troubled Asset Relief Program (TARP) believe it was a bailout for Wall Street at the expense of Main Street. What do you think?
The $700 billion government bailout of the financial system ends on October 3. The debate continues as to whether the program benefited Wall Street at the expense of Main Street. Republicans try to capitalize on the unpopularity of the program in an election year while Democrats are forced to defend the program as having saved the country from another Great Depression. This article sheds light on the contending opinions over the program. (9/30/10 ABC News, Matthew Jaffe) … Read Article
1. What, according to the Congressional Oversight Panel, is the greatest consequence of the TARP?
2. Why is the TARP unpopular among many taxpayers?
Posted in Banks, Bureaucracy, Congress, Economic Policy, Elections, Political Parties, Presidency, The Economy, The Recession, Unemployment, Wall Street
The recent financial fiasco with big banks leaves consumers now having a second thought about doing business with banks. The Early Show’s financial contributor Vera Gibbons compares banks and credit unions. Would a credit union be a better alternative for you? (12/17/2009 CBSNewsOnline)
1. How would you determine which credit union to join. What are some specific signs to look for?
2. Compare bank and credit union rates for car loans and home loans as reported in the video. How do credit unions compare with banks in overall satisfaction rate?