Warren Buffett on taxes

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http://www.theglobeandmail.com/report-o ... le2129471/

When someone with this kind of profile and acumen starts pointing out that the United States is undertaxed, I am encouraged. But I doubt that the message will penetrate.

You do realize the tax hikes that Warren Buffett is pushing for won't have him pay that much more than he already pays (if it even hikes his taxes by a penny).

Show your math.

I think the most important point is the common sense statement:

All of the rehetoric around taxes as a disincentive to growth fails to take into account the simple truth: it never hurts you to earn an extra dollar.

As long as there is a buck to be made, someone will be there to make it.

Not that I'm against our more strident conservatives "going galt", as long as it means that they disconnect from the internet.

As for the wealthy moving away because of their tax rates, typically they move away from some other country to come here, so I'm pretty sure we've got some wiggle room to increase their rates without becoming totally noncompetitive in the rich snob market.

I can do even better.

Then there is the President's curious fascination with Warren Buffett, not exactly Mr. Popularity on Wall Street these days. Although Obama is an Ivy-educated citizen of the world, and president of the most powerful nation on earth, one has to wonder: Is Warren Buffett the only successful American the President knows?

"I don't need another tax cut, Warren Buffett doesn't need another tax cut," the President proudly professed to the American people.

But let's examine why that statement is so unnerving to investors hoping to see their lawmakers engage in an honest budget debate. For starters, Warren Buffett undoubtedly files one of the most unique tax returns in America, replete with tens of millions in capital gains and virtually no earned income. Judging from his tax returns in recent years, Buffett "earns" about $500,000 in salary and fees as a corporate director, but cashes out tens of millions more in capital gains and dividends stemming from his $45 billion dollar stake in Berkshire Hathaway.

As such, he pays about 17 percent of his "income" in taxes. To be sure, this rate is low, especially compared with the millions of Americans who are paying twice as much (35 percent) with virtually no deductions.

The bulk of these so-called "rich" Americans earn less than $500,000 a year before taxes, and hardly qualify as "rich" in Buffett terms, merely quite comfortable. These Americans proudly paid their taxes this week, a task that, in states like New York, means nearly 50 percent of their earned income goes to the government.


Read more: http://www.nypost.com/p/news/business/b ... z1VDJBoGK4

I'm confused. Berkshire Hathaway has never paid a dividend.

They are also not really about cashing out, having famously stated "our favorite holding period is forever".

It essentially means, he's not going to be affected by the tax hikes that are being proposed because he would be in a loophole category.

Absolute nonsense. Here's his full op-ed:

http://www.nytimes.com/2011/08/15/opini ... &seid=auto

I don't particularly give a damn what he says, I'm looking at the facts. The facts are, because of how his taxes are set up and how he gets his money, he won't be affected.

He said raise rates on dividends and capital gains as well. You are just unable to read it because of your serious issues with reality.

You seriously think there won't be loopholes? Also the company he owns stock in apparently doesn't pay dividends.



As long as he doesn't sell his stocks, he can't be taxed on them.

Spin, spin, spin, little boy.

Here's the math.

Buffett says that he paid $7 million in taxes, and he claims he's taxed at a 17% rate. Let's suppose he's paid the $7 million every year since he was a baby, 80 years. That's $560 million he's paid in taxes.

What's the total income he's ever earned? Various sources say his net worth is $50 billiion - $50,000 million. That's how much money he's made in his lifetime. So his actual lifetime tax rate is only $560 million out of $50,000 million, or only a sliver over 1%.

1%. That's Buffett's real tax rate.

Buffett avoids paying taxes by keeping the vast majority of his real income off his tax return, mostly in the form of unrealized capital gains. Increasing the tax rates is no threat to him. Triple the current income tax rate to 100%, and that will still only be 3% to Buffett.

The fact is, Buffett saying to raise taxes on "millionaires" that are worth less than 1% of what he is, is like the average American saying to raise taxes on McDonald's cashiers because they make so much more money than the average starving Somalian.

When Buffett starts talking about how to tax 40% of his Berkshire Hathaway shares away from him, I'll start paying attention. Until then, he's just trying to save his own skin at the cost of people poorer than himself.

Look up the term "deemed disposition." The reckoning comes sooner or later. Unless someone figures out how to avoid dying.

That's silly math because the long term capital gains rate used to be much higher and was frequently adjusted by new schemes. It only dropped to 15% under Bush in 2003. To suggest that Buffet would not be affected by tax hikes to investments is just crazy.

From his op-ed: