Buffett Wants Tax Hikes For "Mega-Rich"

[04SCTLS]

Buffett Wants Tax Hikes For "Mega-Rich"

My friends and I have been coddled long enough by a billionaire-friendly Congress."

http://slatest.slate.com/posts/2011...p_ed_billionaire_investor_calls_for_tax_.html

Billionaire investor Warren Buffett thinks he and his “mega-rich” friends should pay more taxes.

“My friends and I have been coddled long enough by a billionaire-friendly Congress,” Buffett writes in a New York Times op-ed Monday. “It’s time for our government to get serious about shared sacrifice.”

In the op-ed, the so-called Oracle of Omaha calls on Congress to immediately raise the tax rate for households with taxable incomes of more than $1 million, with an additional hike for those making $10 million more.

Buffett notes that many investment managers are taxed at only a 15 percent rate on their investments but almost nothing in payroll taxes. He reveals his last federal income tax bill was $6,938,744, which was only 17.4 percent of his taxable income.

“While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” Buffett writes.

“These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species,” he writes. “It’s nice to have friends in high places.“

Buffett also threw cold water on the idea that higher taxes would discourage the rich from investing, saying that “potential taxes have never scared them off” in the past.


_______________________________________________________________

Buffett also threw cold water on the idea that higher taxes would discourage the rich from investing, saying that “potential taxes have never scared them off” in the past.

Buffett said higher taxes for the rich will not discourage investment.

"I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain," he said

"People invest to make money, and potential taxes have never scared them off."

This is what the armchair critics with no personal experience or success
just don't get.
They pretend to know something and rely on these silly theories they have faithfully convinced themselves of.
Potential taxes don't scare off investors and never have.
You usually can't wait for the tax rate to change before pursuing an opportunity especially if you're a startup.

 

[MAC1]

Who cares?!

 

[fossten]

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782

 

[04SCTLS]

I doubt this would affect anyone here.
The bottom of the top 1% is unfairly overtaxed and the top of the 1%
is undertaxed.

Buffett is saying that from his considerable experience a holy tenet of current conservatism is based on nonsense.

 

[04SCTLS]

Here's the whole op-ed

______________________________________________________________
Op-Ed Contributor

Stop Coddling the Super-Rich

By WARREN E. BUFFETT

Published: August 14, 2011

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1&hp

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. 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.
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.
I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.
Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.
The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)
I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.
Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.
Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

_______________________________________________________________

 

[shagdrum]

Unfortunately, Buffet's experience is not in an area that qualifies him to dismiss the laws of supply and demand. People like Buffet should consider how much they don't know. Of course, expecting that kind of humility is probably asking too much.

Nor has he provided any evidence or actual logical proof to back up his claims.

He is making a non-argument that those who want to agree with him will latch on to via fallacious appeal to authority reasoning.

Is is a baseless, subjective moral appeal and a dodge of economics.

It is funny how economics is always a big inconvenience to tyrants and their supporters...

 

[shagdrum]

Oh, and how about a critical examination of Buffet's "argument" instead of simply mindless praise...

Stephen Moore tackled Buffett’s argument last month that the rich pay less in taxes percentage-wise than the middle class (they don’t), but let’s lay that aside. And let’s lay aside the fact that capital gains are subject to double taxation and that the very rich produce lots of revenue for Uncle Sam when they die thanks to the estate tax. For the sake of argument, if we took Buffett’s advice, how much extra revenue are we potentially talking about here? According to the Journal, letting the Bush tax cuts lapse on households making over $1 million annually would mean additional revenue to the feds of $40-50 billion per year, or … three percent of the deficit. Every bit helps, and if you’re a liberal that’s proof positive of just how little is being asked of House Republicans in exchange for deeper spending cuts, but it’s also a testament to how unserious Democrats are about tax hikes as a budget solution. Taxing the rich won’t solve everything; it’ll barely help solve anything. It’s part of the Democrats’ list demands chiefly for political reasons, so that they have some sort of class-warfare victory to tout to their base when they bargain with the GOP, not because it’ll contribute anything significant towards closing the gaping deficit. In fact, in the clip below, Buffett actually suggests lowering rates on middle-class taxpayers to offset the hikes on the very rich. But why do that if the goal is to maximize revenue? And if the answer is “because it’ll stimulate growth and that will maximize revenue,” then why not apply that logic to the very rich too?​

Grasping at straws to dismiss basic economics only shows a lack of integrity.

 

[04SCTLS]

Oh, and how about a critical examination of Buffet's "argument" instead of simply mindless praise...

Stephen Moore tackled Buffett’s argument last month that the rich pay less in taxes percentage-wise than the middle class (they don’t), but let’s lay that aside. And let’s lay aside the fact that capital gains are subject to double taxation and that the very rich produce lots of revenue for Uncle Sam when they die thanks to the estate tax. For the sake of argument, if we took Buffett’s advice, how much extra revenue are we potentially talking about here? According to the Journal, letting the Bush tax cuts lapse on households making over $1 million annually would mean additional revenue to the feds of $40-50 billion per year, or … three percent of the deficit. Every bit helps, and if you’re a liberal that’s proof positive of just how little is being asked of House Republicans in exchange for deeper spending cuts, but it’s also a testament to how unserious Democrats are about tax hikes as a budget solution. Taxing the rich won’t solve everything; it’ll barely help solve anything. It’s part of the Democrats’ list demands chiefly for political reasons, so that they have some sort of class-warfare victory to tout to their base when they bargain with the GOP, not because it’ll contribute anything significant towards closing the gaping deficit. In fact, in the clip below, Buffett actually suggests lowering rates on middle-class taxpayers to offset the hikes on the very rich. But why do that if the goal is to maximize revenue? And if the answer is “because it’ll stimulate growth and that will maximize revenue,” then why not apply that logic to the very rich too?
​

Grasping at straws to dismiss basic economics only shows a lack of integrity.

But you miss the point he's addressing, the unfairness of the super rich not paying more than even the mere rich who pay a lot of taxes.
I have to pay the full rate because in an S Corp all my profits are deemed salary.
Why should the money managers get such a free ride comaratively?

 

[04SCTLS]

Unfortunately, Buffet's experience is not in an area that qualifies him to dismiss the laws of supply and demand. People like Buffet should consider how much they don't know. Of course, expecting that kind of humility is probably asking too much.

Nor has he provided any evidence or actual logical proof to back up his claims.

He is making a non-argument that those who want to agree with him will latch on to via fallacious appeal to authority reasoning.

Is is a baseless, subjective moral appeal and a dodge of economics.

It is funny how economics is always a big inconvenience to tyrants and their supporters...

He has provided his experience and accomplishments which are more valuable and impressive than IMO some non successful pundit's or scholar's opinion.
You don't get to be the richest professional investor in America by being wrong much although Buffet did have some humble pie last year but that was once in 30 years.

 

[shagdrum]

Experience and accomplishments in ONE area don't make you an expert in ALL areas. To assume as much is the root of hubris.

Buffet is a tremendous investor, but his is a terrible economist.

Where is his economic argument?

There isn't one. It is only a moral appeal masquerading as an economic argument to the economically illiterate simply because it talks about taxes. Being wise in one area does not mean you are incapable of being a fool in other areas.

It should be noted that Buffet has a bit of a conflict of interest in his arguments.

There is no economic component to Buffet's moral posturing, making his "argument" irrelevant. The veracity of the claims he gives are highly questionable. But, regardless of all that, we are to believe him simply because he is a highly successful investor?!

To apply your logic, you would show absolute faith in Buffet preforming open heart surgery on you. He is an extremely accomplished investor, so he must be knowledgeable in medicine, cardiac health and surgery to, right?

I thought you were all about reason over faith.

 

[shagdrum]

But you miss the point he's addressing, the unfairness of the super rich not paying more than even the mere rich who pay a lot of taxes.

I am not missing the point. The "point" is A) questionable, and B) irrelevant.

Moral arguments only distract from the real issue of fixing the economic mess we are in.

Myopically pursuing high minded moral ideals and ignoring economic reality are how we got into this mess in the first place. Buffet would have us double down on that same approach.

 

[compshmoe]

Oh, and how about a critical examination of Buffet's "argument" instead of simply mindless praise...

Stephen Moore tackled Buffett’s argument last month that the rich pay less in taxes percentage-wise than the middle class (they don’t), but let’s lay that aside. And let’s lay aside the fact that capital gains are subject to double taxation and that the very rich produce lots of revenue for Uncle Sam when they die thanks to the estate tax. For the sake of argument, if we took Buffett’s advice, how much extra revenue are we potentially talking about here? According to the Journal, letting the Bush tax cuts lapse on households making over $1 million annually would mean additional revenue to the feds of $40-50 billion per year, or … three percent of the deficit. Every bit helps, and if you’re a liberal that’s proof positive of just how little is being asked of House Republicans in exchange for deeper spending cuts, but it’s also a testament to how unserious Democrats are about tax hikes as a budget solution. Taxing the rich won’t solve everything; it’ll barely help solve anything. It’s part of the Democrats’ list demands chiefly for political reasons, so that they have some sort of class-warfare victory to tout to their base when they bargain with the GOP, not because it’ll contribute anything significant towards closing the gaping deficit. In fact, in the clip below, Buffett actually suggests lowering rates on middle-class taxpayers to offset the hikes on the very rich. But why do that if the goal is to maximize revenue? And if the answer is “because it’ll stimulate growth and that will maximize revenue,” then why not apply that logic to the very rich too?​

Grasping at straws to dismiss basic economics only shows a lack of integrity.

Double Taxation on Capital Gains

Under the old law, a corporation could sell its assets to a purchaser and liquidate within 1 year without an imposition of a corporate level tax on its capital gains type property. Only the shareholders would be taxed on the gain, which was defined as the money, and FMV of property received, less their stock basis. For example, if a shareholder received $100 and had a stock basis of $20, his gain would be $80. The gain would also have been taxed under the old capital gains rate to a maximum of 20%.

Although capital gains are now taxed at the same rate as ordinary income, an S corporation does not pay tax on the gain attributable from the sale of its capital assets, that gain is only taxed once at the shareholder level. By contrast, a C corporation pays a corporate level capital gains tax, and if the remaining gain is distributed to the shareholders, the shareholders will pay tax on the amount of gain they receive.

While some tax advisors believe that a C corporation shareholder can sell his stock and a corporate level tax on the transaction, in reality a well-informed purchaser will not buy corporate stock. Purchasers will want to acquire the assets of the corporation since they receive a new basis in the assets of the corporation equal to the purchase price.

For example: Assume a corporation is worth $100, the adjusted basis in the assets of the corporation is $50 and the shareholder's basis in his stock is $10. If a purchaser buys the shareholder's stock for $100, the purchaser will have a $100 stock basis, but the corporation's basis in its assets remains at $50. But if the purchaser acquires the corporation's assets at $100, he will now have a basis for depreciation and amortization equal to his purchase price (less the amount allocated to goodwill). Because there is only one level of taxation for an S corporation, an asset sale may be successfully accomplished; however, an asset sale for a C corporation will usually cause a double tax.

When an existing C corporation converts to an S corporation, only the post-S conversion appreciation in the corporation's assets will qualify for single level tax treatment, unless the corporation's assets are sold more than 10 years after the date of conversion. This 10-year restriction is to prevent a C corporation with appreciated assets (and subject to double taxation on the sale of those assets and subsequent distribution of proceeds to its shareholders) from converting to an S corporation in order to achieve a single level of taxation.

 

[shagdrum]

Does this cut and paste job have a point?

Specifically some point relevant to what you were responding to?

 

[Calabrio]

There's an easy answer to this.
Scrap the existing tax laws. Scrap the income tax.

Tax consumption, not income.
AND NOT BOTH.

If that's the case, capital gains revenue wouldn't be taxed any differently than earned money. Super rich spend a lot more than the poor. Generations of American aristocracy preach wealth redistribution when, in reality, they pay little in taxes since they generate little income. If consumption were taxed, then they'd feel the pinch while weekending out in the Hamptons or on the Cape.

If that were the case, there'd no longer be any reason to pay CEOs in stock options rather than salary, to avoid punitive taxation, that lead to managerial decisions designed for short term market gains rather long term strength.

 

[THEMOJOMAN]

Propaganda

Oh, and how about a critical examination of Buffet's "argument" instead of simply mindless praise...

Stephen Moore tackled Buffett’s argument last month that the rich pay less in taxes percentage-wise than the middle class (they don’t), but let’s lay that aside. And let’s lay aside the fact that capital gains are subject to double taxation and that the very rich produce lots of revenue for Uncle Sam when they die thanks to the estate tax. For the sake of argument, if we took Buffett’s advice, how much extra revenue are we potentially talking about here? According to the Journal, letting the Bush tax cuts lapse on households making over $1 million annually would mean additional revenue to the feds of $40-50 billion per year, or … three percent of the deficit. Every bit helps, and if you’re a liberal that’s proof positive of just how little is being asked of House Republicans in exchange for deeper spending cuts, but it’s also a testament to how unserious Democrats are about tax hikes as a budget solution. Taxing the rich won’t solve everything; it’ll barely help solve anything. It’s part of the Democrats’ list demands chiefly for political reasons, so that they have some sort of class-warfare victory to tout to their base when they bargain with the GOP, not because it’ll contribute anything significant towards closing the gaping deficit. In fact, in the clip below, Buffett actually suggests lowering rates on middle-class taxpayers to offset the hikes on the very rich. But why do that if the goal is to maximize revenue? And if the answer is “because it’ll stimulate growth and that will maximize revenue,” then why not apply that logic to the very rich too?​

Grasping at straws to dismiss basic economics only shows a lack of integrity.

BUFFETT is saying that crap for propaganda. He's just trying to keep the windows of his Limo from being blasted with bricks or bullets.

 

[THEMOJOMAN]

Buffett

There's an easy answer to this.
Scrap the existing tax laws. Scrap the income tax.

Tax consumption, not income.
AND NOT BOTH.

If that's the case, capital gains revenue wouldn't be taxed any differently than earned money. Super rich spend a lot more than the poor. Generations of American aristocracy preach wealth redistribution when, in reality, they pay little in taxes since they generate little income. If consumption were taxed, then they'd feel the pinch while weekending out in the Hamptons or on the Cape.

If that were the case, there'd no longer be any reason to pay CEOs in stock options rather than salary, to avoid punitive taxation, that lead to managerial decisions designed for short term market gains rather long term strength.[/QUOT

Then why didn't he give the money that he gave Bill Gates' foundation to the US TREASURY? Write them a check TODAY,BUFFETT and then SHUT UP

 

[fossten]

He has provided his experience and accomplishments which are more valuable and impressive than IMO some non successful pundit's or scholar's opinion.
You don't get to be the richest professional investor in America by being wrong much although Buffet did have some humble pie last year but that was once in 30 years.

You can't help yourself, can you? So much self contradiction it's amusing.

 

[fossten]

Surprise: Warren Buffett’s company owes back taxes

“We anticipate that we will resolve all adjustments proposed by the US Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years … within the next 12 months,” the firm’s annual report says.

It also cites outstanding tax issues for 2005 through 2009.

Obvious question: If Buffett really thinks he and his “mega-rich friends” should pay higher taxes, why doesn’t his firm fork over what it already owes under current rates?