Posted on 08/17/2011 9:03:24 AM PDT by MissesBush
Warren Buffett was in the New York Times today bragging about his low effective tax rate and saying how he would like to be paying more. Fellow Forbes contributor Tim Worstall weighed in quibbling about Mr. Buffet not factoring in the corporate taxes on Berkshire Hathaway's earnings. I'm just a simple CPA, whose firm won't even let him sign audit reports anymore. (That's true of all tax partners here by the way. I don't take it personally). I don't want to quibble with a quibble but apparently economists have a hard time figuring out the incidence of the corporate income tax (i.e. who is really paying it), so I think we can let go of that piece of the analysis.
Still Mr. Buffet is not sharing the real reason that he doesn't pay much in the way of income tax relative to his great fortune. The secret is hidden in plain sight. Mr. Worstall alludes to it when he mentions that Berkshire Hathaway does not in fact pay dividends. Mr. Buffet's secret which you can find blasted all over the Internet is one of his famous quotations:
Our favorite holding period is forever
You only pay income taxes at any rate on realized appreciation. An investment with a holding period of forever incurs a capital gains tax of 0%, while all along the holder can be getting wealthy from appreciation. That's the real reason Mr. Buffet does not pay a lot of income taxes.
(Excerpt) Read more at news.yahoo.com ...
If Warren Buiffet wants to give more money to the government I’d like to know who’s stopping him from doing so?
Hey, Warren, you could pay mine.
Is it really “giving from the goodness of your heart” if you’re giving money so you can write it off on your taxes? Let’s see old Warren be a real philanthropist and take no tax write-offs for charity. Whoops! The old tightwad doesn’t believe in that kind of charity. Have some more tapioca Warren.
The more taxes the more money his companies get from the Federal Government.
obozo is STILL repeating the same old tripe that Buffet’s secretary pays more in income taxes than Buffet does. It really gets old. Why isn’t there even one person with an ounce of common sense in that administration that can say - hey - you said that 3 years ago, think of something new!
THINK? What’s that?
There should be an “idiot tax” for any rich person advocating higher income taxes. The idiot tax would tax 25% of ASSETS, but only for idiots saying we need higher taxes..
Time to levy a “wealth” tax on the super rich..rather than a higher income tax on the struggling small business’s in the country. If that were the way we taxed the rich..Buffet would become a conservative real quick.
how to make a contribution to reduce the debt
You can make a contribution online either by credit card, checking or savings account at Pay.gov
You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it’s a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188
http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
maybe he’s out of stamps
Typical limousine lib. "Tax increases and privileged status for thee and not for me."
As has been said before -- Warren, ya want a tax increase? Fine, write a check and leave the rest of us the h@ll alone.
"Tax increases for thee and not for me, privileged status for me and not for thee."
It begs to wonder - if back in the day, we did what Buffett now wants, would Buffett have ever become what Buffett is now.
Warren Buffet is well known in Texas for talking his book. Nothing more than that.
You can bet that he has a payoff in mind down the road.
How many Samll to Medium sized businesses can afford to hire a full time tax lawyers and finanacial planners to not pay as much taxes?
Would a small business hire a tax lawyer for 90,000 a year to save even 80,000 a year on taxes?
Would a big business like G.E. hire a hundred tax lawyers and Financial Officers for $30 million to save 5 BILLION in taxes? They would be stuipid NOT to.
This is one of the reasons the economy is so far out of whack.
We need simplified tax laws with a lower rate that is applied EQUALLY across the board.
Otherwise the tax code becomes a make work program for accoutnants, a tax loophole for the big boys, and a burden on the back of the small and mid sized businesses.
Japan's economy boomed until they started listening to economic advisors foisted on them by the Clinton administration. It has been downhill ever since.
Still, I am in awe of how the corporations there still manage to stay healthy despite a higher tax rate than ours. They basically do what Buffett does-- they pay little or nothing in dividends on capital gains and hide their assets in more tax friendly countries abroad, repatriating portions of them basically only once per year to dress up their coroprate balance sheets for the end of the March 31 fiscal year.
If you sell yen in March and buy it almost any other time of the year, you are virtually guaranteed to make money in FOREX because almost all Japanese companies are buying yen in March to dress up their financial statements. You can't make as much as you used to because traders are very much aware of this technique, but you still can make it trading FOREX. At one time, even the Japanese Government's Bank of Japan did exactly that to get a double helping of revenues around the March 31 fiscal year end:
The dirty little secret is that Japan muddles through this little game of state sponsored socialism and keeps individual income taxes comparatively low for the middle class precisely because they have such a small portion of their society on the government teat. Almost everyone pays taxes.
There is not an army of imported ethnic lobbies which take far more in public services than they pay in taxes. Guest workers are tolerated only to the extent that they pay as much or more into the system as they take out. You might even call them racist and most Japanese won't even flinch if you did. They are proud of having a country which is overwhelmingly middle class and foreign workers who mostly appreciate the opportunities which Japanese society offers, rather than hating them for not giving them more. IOW, it could even be said that lack of diversity is their strength.
Damn good idea. Let them exempt the first five million or so and make it modest until it gets to 50 million or so, then confiscatory after a half billion.
You wouldn't even have to pass the tax bill, just introduce it and move it along toward passage before the Warren Buffet's and Teresa Heinz Kerry's of this country would start changing their tune really quick.
Can we abolish the use of the term loophole?
What we really mean is that a part of the tax code was written to allow [fill in the blank].
When we use the term loophole the suggestion is that it something unethical, illegal, or misused. The people who save taxes based on these regulations are just following the law. Nothing more or less. And, in fact, if a corporation did not use every deduction or exemption the managers and officers would be negligent in their fiduciary responsibility.
This is why we need to fix the regs, not get angry at people who follow them.
If he wants to go further he can fire all the CPA's he employs and hire H&R block to do his taxes... I suspect the group at the mall won't be able to 'save' him quite as much...
Buffet is in fact subject to a much higher marginal tax rate on his income than is his secretary. However, Congress has seen fit to incentivize certain economic behavior by offering tax breaks as a means to achieve their result. Think about the deductability of charitable contributions as a prime example. Now Warren can instruct his accountants to stop taking advantage of theses tax breaks, take the standard deduction, and pay his full "fair" share. There is nothing stopping Buffet from doing that. Why doesn't he?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.