Posted on 10/11/2005 6:56:11 AM PDT by stevestras
The appearance of Bill Gates and Warren Buffett at the Lied Center last week was a reminder of the fluidity in American society that allows talent and drive — not birthright and connection — to earn power and wealth.
Although both men came from comfortable backgrounds, neither was born to that old wealth stratum of American society that sometimes seems to be tantamount to an aristocracy.
Dressed casually, they sat on a couple of stools, cracking jokes, speaking plainly, fielding unscripted questions. “They seemed like ordinary people, very normal, very knowledgeable and funny,” observed Yong Zhao, a University of Nebraska-Lincoln graduate student from China.
Their appearance is an example of the sort of inspiring, indelible personal experiences that are an important part of a university education. This sort of special event — even last year’s entertaining visit by rocker Tommy Lee fits the category — is part of a full and varied campus life.
The audience of 1,800 was UNL business students. The appearance will be shared with all Nebraskans next year on NET.
Their comments veered widely from the humorous — Gates admitted that colleagues at Microsoft blow him away when he plays video games like Halo 2 — to the profound — Buffett defined success as being loved by the people you hope love you.
If any students came to the session with a preconception that all the nation’s rich and powerful share the same low-tax political philosophy, they went away with a different impression.
Both Buffett and Gates said that they should pay more in taxes. “The rich should bear a somewhat higher proportion than they are now,” Gates said.
“I’m paying less than half of what I was paying years ago when I was making a lot less,” Buffett said. “There are people fighting in Iraq paying higher rates than mine.”
Perhaps most encouraging was the belief expressed by both billionaires that everyone can help make the world a better place.
Gates suggested that students gain an exposure to living conditions in other places. “Things are improving and there are places for people to jump in.” Buffett told one student that she — and by extension every individual — changes the world every day by the way she behaves around other people.
At a time when American society seems rife with cronyism and Enron-style corruption at high levels, the comments from the two icons of business success, delivered in a relaxed, ordinary, disarming style, provided reassurance that basic American ideals endure — that merit, hard work, optimism and decency can prevail.
In that Mr. Gates, at least, draws a very modest salary from Microsoft, he pays a comparatively small amount of money in ordinary income taxes, payroll taxes, etc.
Microsoft pays a small dividend, so Mr. Gates pays 15% in federal income taxes on that amount, which is still very small in relationship to his wealth.
Otherwise, Mr. Gates pays taxes on income from any other investments he may have (still relatively small compared to the wealth in his shares of Microsoft), and will pay capital gains tax from time to time when he sells shares of Microsoft (or other smaller investments). Capital gains are a maximum of 15% on the gain at the federal level.
Thus, part of the issue is that Mr. Gates probably just doesn't generate a whole lot of income, in comparison to his wealth, and what income he generates annually is likely nearly all dividends and capital gains, which are both taxed at a maximum federal rate of 15%.
But remember that any dividends he receives are paid out of after-tax corporate profits, and thus have have already been taxed at the federal corporate income tax level (and Microsoft pays federal corporate income taxes at a rate of about 35%). As well, capital gains come from investments usually acquired initially with after-tax income.
These hypocrites can cut a check to the US Treasury any time they want.
Why don't they form a "rich guys who don't pay enough taxes club" and sign up everyone they know who can afford it? They can start with Gates dad. He's a billionaire.
World Unimpressed with Bill Gates’ Puny $168m Donation - September 23rd 2003
Charities around the world were shocked today to learn that Bill Gates had pledged 168 million dollars in the fight against malaria.
“Quite frankly, I was disappointed.” Chuck Hankman, the manager of a local branch of Oxfam announced. “I mean, 168 million sounds like a lot, but to people like Bill Gates it’s next to nothing.
“I managed to secure a $46,000 a year wage for my job at Oxfam – but I give nearly $2,000 a year of that to charities. Mr Gates is worth 46 billion – to parallel what I donate he would have donate 2 billion. It just exposes what a cruel hearted bastard the billionaire is. He earns far too much for what he does, all that excess money should be going to charity...
You sound familiar...
Looks like "the fix is in" for the next election.
"Unbelievable that someone can find fault with this.. "
The fault I find is preaching to impressionable young students as though this complicated situation is so simple. They are basically saying that the tax cuts Bush passed are wrong and I'm sure many students will believe them. It plays right into the "rich get richer" under Bush theme.
"And is the Lied Center the real name of the place or is the writer being ironic?"
Too funny. The Lie(d) Center is pronounced Leed, but it's a good play on words in this situation.
He may be actually telling the truth. He has never taken much of a salary. His wealth comes from the appreciation of his BH stock, the gains on which are not taxed until he sells some, which he never does except through his charitable foundation, which doesn't pay taxes. He lives modestly, as I am given to understand, and BH stock doesn't pay dividends I believe. So his taxable income is quite small.
Buffet seems to be unaware of a lot of things. Surprisingly his personal finances and company structure.
With the debate on repealing the tax on dividends Buffet complained that if the tax on dividends were repealed he would pay far less in taxes on his BH income than he does now. An enterprising reporter decided to investigage.
There was a big problem with Buffet's claim. BH doesn't pay dividends!
Relax Comrade. Even if the soldiers were paying taxes, Bill Gates made $1,000,000 in salary last year. That puts him in the 35% tax bracket. Plus 15% of any capital gains on MSFT stock sales. The average soldier is in the 10% or 15% tax bracket.
No, I don't think they do have a gaggle of lawyers. They don't need to. It's very simple. As long as they don't sell any of their stock, the gains on the stock are not taxed. See my post 48.
Military members in a forward deployed zone actually do pay taxes, but they are reimbursed. If I recall correctly, there's something like a 30 day lag.
In effect, you are correct, though.
Bill Gates is a wildly successful businessman, but decency and ethics certainly don't apply to his company and by extension to him. They constantly try to patent/copyright software "concepts" to try to strangle and gum up the works in trying to write software. I suspect someday they will try to copyright the word "the" claiming they were the first to use it.
Dear Toddsterpatriot,
"Relax Comrade. Even if the soldiers were paying taxes, Bill Gates made $1,000,000 in salary last year. That puts him in the 35% tax bracket. Plus 15% of any capital gains on MSFT stock sales. The average soldier is in the 10% or 15% tax bracket."
Mr. Gates also receives modest dividends of 32 cents per share on his shares in Microsoft. Yahoo! Finance reports that he owns about 1 billion shares (which seems very low to me, but who knows?). He thus receives about $300 million in dividends annually, taxed at 15%, federal rate.
However, to offset his federal income taxes, he has his contributions to charity, which over the last 10 years or so have probably exceeded his actual taxable income (since he gives away shares of Microsoft, and thus gets a deduction at the full market value). I don't know how that intersects with the AMT, but I imagine that he doesn't quite pay the entire 15% on the $300 million.
sitetest
What taxes are included in this 65%?
The regressive tax policy - a jolly good idea! This might be a winning ticket in 2006/2008.
And Buffet and Gates, Sr (don't know about Jr) are FOR DEATH TAXES......but, I'll bet they have trusts and all sorts of other vehicles set up to avoid taxes.
The reason why the "rich" pay a lower effective tax rate is because they get a lot of tax benefits through charitable donations, deductible interest, paying higher state income taxes, etc.
Why do we provide these tax breaks? To encourage the very activity for providing the tax breaks. We want people to give to charity, build homes, and keep the tax burden at the state and local levels.
Bill.. Warren... just shut up and pay your damn taxes, we don't want to hear the woes of being a member of the super-rich elite. Either that, or make some effort at getting a FLAT TAX passed. Yeah, THAT'S really likely, huh?
Easy answer: FLAT TAX.
IIRC, there is a limit to the charitable deduction. And the AMT is 26% or 28%. So anyone dumb enough to think a soldier in Iraq pays more in taxes than Bill Gates is probably too dumb to cross the street.
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