Tuesday, October 25, 2005

In financial news

I think it is only the ridiculously wealthy that understand money. Bill Gates and Warren Buffet are ridiculously rich. Here's part of Mr. Buffet's opinion on the flat-tax:

We have, in my view, a taxation system that’s much too flat already. If you look at the payroll tax—which is over 12% now, and that applies on the first $80,000 or $90,000 of income—Bill and I pay practically none of that in relation to our income... What has gone on in this country in recent years is a huge benefit to the very rich and not that much relief to people down below.

That is exactly true, when I was billing a ridiculous amout for my services I could cap my FICA contributions. This amounted to a huge tax break after the magic $90,000 income mark. This means that in proportion to income you've got to cap the income tax bracket out before you start paying a bigger tax rate than you do making less than $90k, and then that's only by 1% or 2%. So the shclub who's eeeking out a living ~$65,000 is paying a greater percentage of his income in taxes than the guy making $130k.

Take the time to read the Fortune article, it's quite enlightening.

No comments: