Posted on 08/18/2011 10:18:12 AM PDT by SeekAndFind
Investors might hang on Warren Buffett's every word when it comes to financial advice, but Republicans are less than enthusiastic about the Oracle of Omaha's opinions on taxation. After the billionaire chairman of investment firm Berkshire Hathaway wrote an op-ed in the New York Times complaining that the mega-rich are undertaxed in comparison to the middle class, conservatives urged him to voluntarily send more of his own money to the Internal Revenue Service and leave others alone. Not only are they willfully missing Buffett's point, they're seemingly oblivious to the fact that in many ways his tax ideas mirror those of Ronald Reagan.
Hard to believe as it may seem, it has been a quarter of a century since the last comprehensive overhaul of the U.S. tax code. Under the Tax Reform Act of 1986, which was signed by President Reagan, the number of tax brackets was reduced, loopholes were closed, the top tax rate was lowered and capital gains were taxed at the same rate as ordinary income. Yet in the years since, Congress has steadily drilled loopholes back into the code while lowering the tax burden for wealthy people who make money through investments rather than labor. That was the source of Buffett's complaint.
"The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes," Buffett wrote. "It's a different story for the middle class; typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot."
(Excerpt) Read more at latimes.com ...
I don’t understand what all the brouhaha is all about. There is absolutely nothing stopping these ultrarich self indulgent and preachy gazillionaires from sending in an extra check to the government if they feel they are not paying enough.
I remember reading an article a while ago that said that Buffet paid a lower marginal tax rate than his secretary. Typical lib, make other pay!
Can we just please get on with raising Warren Buffett’s taxes to 95%?
That should be the GOPs first order of business when they return. Pass a bill raising Warren Buffett’s taxes to 95%.
Go ahead and put a 100% property tax on him as well.
Their liberal utopia fantasies are dying hard. They sound like the Duke Brothers at the end of Trading Places. Obama and his drones are still holding onto the delusion that the current rich benefits, pensions and give-ways can continue at their current levels and even increase if and only if rich white Republicans have their wealth confiscated at 90%. They refuse to let this go, this insistence on class warfare, that one man should pay for the welfare of another. The sophism of Marx and Engels was a confused, evil and ultimately unworkable political and economic system. Marxism ignored some basic tenants of human behavior. Sure they can make socialsim work for a few years at the point of a gun and by exterminating anyone opposed to it but ultimately it fails, it has always failed and will always fail. Just becuase you feel bad for that bum panhandling or that black mother of 7 with 7 different baby Dads does not give you the right to express your empathy by stealing my treasure. The entire underpinnings of modern Fabian socialism are coming down and it’s comical to see Magic Mulatto and guys like the author here screaming to “Turn those machines back on....”
I think this is the key paragraph in the article:
Hard to believe as it may seem, it has been a quarter of a century since the last comprehensive overhaul of the U.S. tax code. Under the Tax Reform Act of 1986, which was signed by President Reagan, the number of tax brackets was reduced, loopholes were closed, the top tax rate was lowered and capital gains were taxed at the same rate as ordinary income. Yet in the years since, Congress has steadily drilled loopholes back into the code while lowering the tax burden for wealthy people who make money through investments rather than labor. That was the source of Buffett's complaint.
“while lowering the tax burden for wealthy people who make money through investments rather than labor. That was the source of Buffett’s complaint.”
First of all, investment is a form of “labor,” that is if labor is what one does to earn money, short of someone else handing it over. Work smart, not hard.
More importantly, it was a stupid complaint. Everyone and his mother knows that such “unearned” income is double taxed. It is absolutely inane to measure Buffet relative to his secretary by taking into account the tax rate on one side while ignoring the other.
Most importantly of all, I don’t believe all this revenue talk is about closing loopholes and otherwise making things more fair. It’s about our central government controlling more of the national wealth. Targeting the wealthy is merely a convenience.
Buffoon opposes a flat tax ,does he not? Why? that would get rid of the “loopholes”.
Well, then, we know it must be one of the most miserable, under-handed, pro-rich, anti-poor positions on the face of the Earth since we know from the LAT that Reagan was Satan incarnate.
According to the IRS those paying taxes on income $1 million or over last year was 235,000. Suppose you tax at 100% all income over the magic $250,000 mark President 0 is always gassing on about. How much do you get? Let's round up and be as generous as possible.
You get about $300 billion. That is just about enough to run the Fed Govt for a single month.
You cannot tax your way out of this fiscal mess "Progressives".
Barf alert???
RE: There is absolutely nothing stopping these ultrarich self indulgent and preachy gazillionaires from sending in an extra check to the government if they feel they are not paying enough.
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You have to understand what Buffer really wants.
A brillant man like him does not need people to tell him that he can send a check anytime he wants. But that is not what he wants to do.
We must Understand Warren Buffet’s “Tax-me-more” mentality...
First, let’s talk about the issue of -— “He can always write a check to Uncle Sam”.
I don’t think the man got to be Billionaire because he is stupid and doesn’t know that he can donate his money to Uncle Sam anytime he likes. HE KNOWS THAT, sohe does not need anyone’s advise.
Anyone calling for him to write a blank check to the government can’t see the forest through the trees.
Buffet knows that a “donation” to the US government (which is effectively what most FReepers are asking him to do) won’t even make a ripple in the government revenue stream.
But I think that he’s thinking -— If he asks everyone of the “super-rich” to do it with me (which is exactly the point of his article), then it makes more sense because of the COLLECTIVE amount.
So, if his Collective Amount is viewed from his own lenses, then, Buffet’s “I’m only going to do it if you make me” argument would make perfect sense.
He’s waiting to donate his money to the Gates Foundation because he knows that the best way to make an impact is for compounding to continue to work until he no longer has any control over it (aka death). The Gates Foundation is well funded until then, and probably has no immediate use of the money.
Anybody who has followed the career of the man will begin to understand his thinking -— Spending is an issue, but so is income inequality and THAT is what Buffet thinks he is trying to address... FAIRNESS ( misguided as he is ).
Buffet believes that sooner or later the income gap will shrink - either by choice or by force. I’m pretty sure he doesn’t want the latter (not that he would be around to see it.).
Just trying to go into the mind of the man folks, to find out why he’s asking to be taxed more.
Half of the tax is paid by the employer. His secretary pays no more than 7.5% payroll taxes. According to other sources his secretary earned $60,000. With one exemption, and the standard deduction she pays approximately $8000 which is around 13%. Not even close to more than 30% rate.
Buffet is ignoring the fact that Berkshire Hathaway as a C corporation pays corporate taxes. This years proxy shows that they paid at least 29%. Any capital gains distributed to Buffet would be taxed at 15%. So his rate is actually 44%. This does not even include his $175,000 wages and salary as reported by the company.
Buffet wants higher death taxes, because his insurance companies benefit from estate tax planning and sale of life insurance to pay the tax.
He advocated a tax code in this interview, based on consumption(not sales tax). Everyone has all their money in an unlimited IRA. It is only taxed when withdrawn from the IRA. Any one doubt that such an arrangement would benefit his business?
His comments are self serving and obviously less than a true picture of what he claims. I say prove what you are saying - show me all the tax returns.
And in return for the this compromise, the democrats promised to overhaul spending, including entitlement reform. All these years later, the democrats have continually thumbed their noses at any attempts to hold them to their end of the bargain. Meanwhile, those "loopholes" (some of them deductions taken primarily by the middle class) remained closed and the lower rates were gradually increased several times. Capital gains SHOULD be taxed at a lower rate if at all. Also, capital gains should be indexed for inflation; they are not.
The idea that Buffet's proposals for increasing capital gains taxes, or for increasing payroll taxes on higher wage incomes, or any of his other "tax-the-hell-out-of-the-upper-middle-class-so-they-can-never-approach-my-level-of-obscene-wealth" proposals are even remotely like Reagan's tax philosophy is completely ridiculous and idiotic. Reagan compromised with the democrats and signed THEIR tax reform law; it was NOT his proposal and had he known the rats would reneg on their end of the bargain he would have vetoed it.
I thought that the mega-rich have tons of tax lawyers and accountants to ensure that they pay minimal taxes. The mega-rich also donate many dollars to candidates that support their quest to avoid taxes.
Perhaps big boy Buffett can write an extra check or two, or report taxable income that falls on the tax side of the ledger.
Perhaps he can point out the loopholes that the mega-rich pay for and use, and help to close them.
The article total ignores the double taxation issue. Corporations pay a 35% tax rate. The remaining profits are sent out as dividends or retained, driving up share price. There is a further tax on that gain. So Mr. Buffet is paying, actually a much higher rate than he claims. It may seem fare to raise taxes on capital providers, doing so though will reduce the amount of available capital.
I disagree with you on a few points:
Very few, if any corporations pay anything near the 35% rate. Many pay little if any tax at all.
I am retired and live off the returns from stock mutual funds. The taxes on the corporations whose stock I own does indirectly effect my return, but I still get a good return. If the taxes on that return were higher it would not keep me from investing. I think this is true of most investors.
Double taxation exists everywhere, not just on the returns from stocks. For example I pay income tax, then buy something and pay sales tax. I could list lots of examples but I am sure you see my point.
See my post #16
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