GREG MANKIW: Warren Buffett Doesn't Tell You About How He's A Master Of Tax Avoidance

In a NYT Op-Ed today, Warren Buffett argued that the rich should pay a certain minimum tax, and he explained to activist Grover Norquist that it's preposterous to think that businessmen would forgo profitable deals merely because the rate of tax on the profits would go up.

Basically because he's a rich, successful guy (which is why a lot of people are listened to on a lot of subjects).

To that end, economist and former Romney advisor Greg Mankiw has a short post talking about Buffett as a master of "tax avoidance," wherein he lists four things Buffett does to avoid paying taxes.

* Berkshire never pays a dividend (so the jump in dividend tax hikes don't effect him).

* Berkshire only trades long-term (so short-term cap gains, which are taxed at income tax rates don't effect him).

* His children won't pay income taxes on any assets that are bequeathed to them, so an income tax hike doesn't affect him.

None of these are wrong or illegal or anything. And giving your money away to charity is admirable. So the point isn't that Buffett is doing anything wrong, but that he's advocating policies which will have very little effect on him. So if we're going to listen to him because of who he is, it's not preposterous to note how little of an effect rule changes would have on him.

Other folks, in the past, have charged that Buffett specifically benefits from the tax proposals he backs.

I agree....

as far as his "charity" money, I say its hardly charity....

you and I would LOVE to be able to send our money to our favorite causes instead of having to pay taxes...

this is what Buffoon is doing....he's giving his money to his concerns and his likes...he's choosing where to send his taxes instead of the govt doing whatever with it...

its not illegal....but lets just all understand that he's getting a lot out of the deal....he gets to act all superior and elitist while he dodges taxes..

I think that extending SS tax to ALL the income before tax deductions/credits to ALL zillionaires would be a good start....

make it progressive so the more money they make the more they pay....

you want to hear screaming and threats?...try making the limousine liberals pay for their beloved social programs/SS without exception....

Ok, here’s just ONE little, actually rather large example of subsidy buffett/berkshire gets.

Burlington Northern Santa Fe railway is a major freight line owned outright by Berkshire Hathaway.

Some of us may recall how legally(buffett lobbyists) blocking the canadian shale oil pipeline buildout is a bigtime boost in freight revenue, since BNSF oil tankers are transporting this crude (a la the rockefeller/railroad trust back when, with the exception being that canadian oil producers haven’t been able to take over the railroad like rockefellers did with transport rebates such that they had NO transportation costs). BNSF is paid VERY WELL by US buyers and canadian producers to transport oil all the way down to our refineries to make-—whatever (jet fuel,gas, kerosene diesel). BTW this cost is borne by, US in gas prices. A pipeline would blow those costs away.

But here’s the icing: BNSF is the host railway for major Amtrak routes. Amtrak has to lease those, with a contract that includes supposed maintenance (BNSF probably does this OK but if NOT if damage is untimely to passenger service, Amtrak has to PAY them to maintain). Additionally, amtrak fares are subsidized by US as well, so he gets a piece of that indirectly.

So,Buffett gets US subsidy dollars for his private rails, as well as other cushy govt. cash. Sweet, and damned expensive to taxpayers. Say nothing about his other bizes that get other subsidies (let’s not forget BizJet, using US airports and subsidized FBO air centers). Sweet again.

All that and sheltered non-taxed wealth— and Buffett says the “rich” should pay a fixed rate. He SURE won’t be paying it. The “Ratschild of the Plains” a sage— part of the problem and deceitful farce.

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