Buffett: Stop coddling the super-rich

[Alma]

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

<i>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.</i>

 

[The Big Ragu]

Two things. The part you didn't quote. ... Buffett has done this before. Claiming his average tax rate is about 17.4 percent, while nearly everyone in his office pays a higher average tax rate (he claims 36 percent on average).

Everytime he does this, he gets called on it. He has done it over and over again, and over and over again, the flaw gets pointed out. His ignoring it, demonstrates that he has a politicized agenda.

His personal Federal income tax rate is so low because he owns the bulk of the shares in Berkshire, and in the U.S. we tax corporate income tax on any dividends (when you own a company, you take dividends, to the extent you can legally, to avoid paying the personal income tax; dividends are not taxed as income). If you include how he is taxed at the corporate level, before taking his distributions, his average tax rate is closer to 50 percent. And that has been demonstrated. And Mr. Buffett still makes the same disingenuous argument.

But aside from that, I have done a bit of work on this, and the average effective Federal tax rate in the U.S. is 19 percent. If Warren Buffet's employess are paying 36 percent on average, he either pays his workers extraordinarily well (as in ridiculously well), or they are not all that smart (which begs the question of how Berkshire does so well) and paying way more taxes than they need to.

 

[YankeeFan]

When is Warren going to propose a tax on wealth, instead of income?

That's where the money is, and he knows it.

And, if Government needs the money, and is such a good steward of it, why has he spent years planning his estate to make sure the Government doesn't get most of it?

 

[Ben_Hecht]

When is Warren going to propose a tax on wealth, instead of income?

That's where the money is, and he knows it.

And, if Government needs the money, and is such a good steward of it, why has he spent years planning his estate to make sure the Government doesn't get most of it?

Many of the big wheels are already eagerly paying a borderline version of a wealth tax with their substantial, focused charitable contributions.

I am fully, well-aware that is NOT the same thing . . . but I give kudos and credit to those who do it, as opposed to those who don't.

 

[Bob Cook]

I think Buffet wrote this so he can reroute the pitchforks and torches to someone else's house.

 

[poindexter]

Two things. The part you didn't quote. ... Buffett has done this before. Claiming his average tax rate is about 17.4 percent, while nearly everyone in his office pays a higher average tax rate (he claims 36 percent on average).

Everytime he does this, he gets called on it. He has done it over and over again, and over and over again, the flaw gets pointed out. His ignoring it, demonstrates that he has a politicized agenda.

His personal Federal income tax rate is so low because he owns the bulk of the shares in Berkshire, and in the U.S. we tax corporate income tax on any dividends (when you own a company, you take dividends, to the extent you can legally, to avoid paying the personal income tax; dividends are not taxed as income). If you include how he is taxed at the corporate level, before taking his distributions, his average tax rate is closer to 50 percent. And that has been demonstrated. And Mr. Buffett still makes the same disingenuous argument.

But aside from that, I have done a bit of work on this, and the average effective Federal tax rate in the U.S. is 19 percent. If Warren Buffet's employess are paying 36 percent on average, he either pays his workers extraordinarily well (as in ridiculously well), or they are not all that smart (which begs the question of how Berkshire does so well) and paying way more taxes than they need to.

Do you have a link to the flaw?

 

[heyabbott]

I think you also need to look at the cap on Social Security taxes. Someone making 250K/yr pays the same actual tax as someone making 105K/yr, but the effective rate is half as much.

 

[User 1019]

I thought he only wrote about beach songs ...

 

[Azrael]

Having stepped on a pop top, here's a rebuttal:

http://www.theatlantic.com/business/archive/2011/08/should-billionaires-pay-lower-taxes-than-you-do/243608/

 

[BrianGriffin]

When is Warren going to propose a tax on wealth, instead of income?

That's where the money is, and he knows it.

And, if Government needs the money, and is such a good steward of it, why has he spent years planning his estate to make sure the Government doesn't get most of it?

It seems like he's suggesting an increase in capital gains -- he says he's including that in his total tax and he must be considering the rate he claims to pay. If that's the case, wouldn't that be a tax on wealth in a way since it's return on investment and investing requires pre-existing wealth?

 

[poindexter]

Having stepped on a pop top, here's a rebuttal:

http://www.theatlantic.com/business/archive/2011/08/should-billionaires-pay-lower-taxes-than-you-do/243608/

Good god, the article has been out a few hours and he's had to update it twice. Give a thousand monkeys a thousand days and they could type something better.

**** dude, just ask for the abolishment of sales tax while your at it, because you've already been taxed on that money you are spending as well!

 

[The Big Ragu]

Two things. The part you didn't quote. ... Buffett has done this before. Claiming his average tax rate is about 17.4 percent, while nearly everyone in his office pays a higher average tax rate (he claims 36 percent on average).

Everytime he does this, he gets called on it. He has done it over and over again, and over and over again, the flaw gets pointed out. His ignoring it, demonstrates that he has a politicized agenda.

His personal Federal income tax rate is so low because he owns the bulk of the shares in Berkshire, and in the U.S. we tax corporate income tax on any dividends (when you own a company, you take dividends, to the extent you can legally, to avoid paying the personal income tax; dividends are not taxed as income). If you include how he is taxed at the corporate level, before taking his distributions, his average tax rate is closer to 50 percent. And that has been demonstrated. And Mr. Buffett still makes the same disingenuous argument.

But aside from that, I have done a bit of work on this, and the average effective Federal tax rate in the U.S. is 19 percent. If Warren Buffet's employess are paying 36 percent on average, he either pays his workers extraordinarily well (as in ridiculously well), or they are not all that smart (which begs the question of how Berkshire does so well) and paying way more taxes than they need to.

Do you have a link to the flaw?

I could link to myself actually, but I am not comfortable doing it. Go back to 2007. I think it was 2007. Maybe 2008. Buffett was making the same exact argument. You can find multiple places -- then, as well as yesterday after his op ed -- that point out that his effective tax rate at the corporate and personal level is more like 50 percent.

 

[poindexter]

Two things. The part you didn't quote. ... Buffett has done this before. Claiming his average tax rate is about 17.4 percent, while nearly everyone in his office pays a higher average tax rate (he claims 36 percent on average).

Everytime he does this, he gets called on it. He has done it over and over again, and over and over again, the flaw gets pointed out. His ignoring it, demonstrates that he has a politicized agenda.

His personal Federal income tax rate is so low because he owns the bulk of the shares in Berkshire, and in the U.S. we tax corporate income tax on any dividends (when you own a company, you take dividends, to the extent you can legally, to avoid paying the personal income tax; dividends are not taxed as income). If you include how he is taxed at the corporate level, before taking his distributions, his average tax rate is closer to 50 percent. And that has been demonstrated. And Mr. Buffett still makes the same disingenuous argument.

But aside from that, I have done a bit of work on this, and the average effective Federal tax rate in the U.S. is 19 percent. If Warren Buffet's employess are paying 36 percent on average, he either pays his workers extraordinarily well (as in ridiculously well), or they are not all that smart (which begs the question of how Berkshire does so well) and paying way more taxes than they need to.

Do you have a link to the flaw?

I could link to myself actually, but I am not comfortable doing it. Go back to 2007. I think it was 2007. Maybe 2008. Buffett was making the same exact argument. You can find multiple places -- then, as well as yesterday after his op ed -- that point out that his effective tax rate at the corporate and personal level is more like 50 percent.

One thing he writes that doesn't make sense (I think you pointed out earlier) is that his employees are paying a federal tax rate of 35%, or even 41%... the top marginal tax rate is 28%, right?

What else is he including there? These employees must be making a s-load of money of their effective rate, after deductions, is at the top or even higher than the highest marginal rate.

 

[LongTimeListener]

Two things. The part you didn't quote. ... Buffett has done this before. Claiming his average tax rate is about 17.4 percent, while nearly everyone in his office pays a higher average tax rate (he claims 36 percent on average).

Everytime he does this, he gets called on it. He has done it over and over again, and over and over again, the flaw gets pointed out. His ignoring it, demonstrates that he has a politicized agenda.

His personal Federal income tax rate is so low because he owns the bulk of the shares in Berkshire, and in the U.S. we tax corporate income tax on any dividends (when you own a company, you take dividends, to the extent you can legally, to avoid paying the personal income tax; dividends are not taxed as income). If you include how he is taxed at the corporate level, before taking his distributions, his average tax rate is closer to 50 percent. And that has been demonstrated. And Mr. Buffett still makes the same disingenuous argument.

But aside from that, I have done a bit of work on this, and the average effective Federal tax rate in the U.S. is 19 percent. If Warren Buffet's employess are paying 36 percent on average, he either pays his workers extraordinarily well (as in ridiculously well), or they are not all that smart (which begs the question of how Berkshire does so well) and paying way more taxes than they need to.

Ragu, on the debt ceiling thread, you continually argue the old trope that the rich are getting screwed because the poor don't pay any Federal Income Tax -- ignoring that federal income tax is a very narrow measure that doesn't come close to including all the taxes paid, and that in terms of overall taxation the rates are barely progressive if they are progressive at all. Here you argue that Warren Buffett is painting an inaccurate picture by limiting his argument to the Federal Income Tax instead of the full taxation picture.

Which is it -- is federal income tax an accurate measure of taxation? No, it is not, and you are acknowledging it here.

Your own politicized agenda comes shining through.

 

[Point of Order]

How can anyone disagree with this?

 

[YGBFKM]

Sentience?

 

[Point of Order]

You guys can parse it all you want, but when the richest guy in the world pays the lowest tax rate in his office we have problems. Period.

 

[Inky_Wretch]

You guys can parse it all you want, but when the richest guy in the world pays the lowest tax rate in his office we have problems. Period.

Why do you and Buffett hate the job creators and trickle-downers?

 

[User 11148]

Two things. The part you didn't quote. ... Buffett has done this before. Claiming his average tax rate is about 17.4 percent, while nearly everyone in his office pays a higher average tax rate (he claims 36 percent on average).

Everytime he does this, he gets called on it. He has done it over and over again, and over and over again, the flaw gets pointed out. His ignoring it, demonstrates that he has a politicized agenda.

His personal Federal income tax rate is so low because he owns the bulk of the shares in Berkshire, and in the U.S. we tax corporate income tax on any dividends (when you own a company, you take dividends, to the extent you can legally, to avoid paying the personal income tax; dividends are not taxed as income). If you include how he is taxed at the corporate level, before taking his distributions, his average tax rate is closer to 50 percent. And that has been demonstrated. And Mr. Buffett still makes the same disingenuous argument.

But aside from that, I have done a bit of work on this, and the average effective Federal tax rate in the U.S. is 19 percent. If Warren Buffet's employess are paying 36 percent on average, he either pays his workers extraordinarily well (as in ridiculously well), or they are not all that smart (which begs the question of how Berkshire does so well) and paying way more taxes than they need to.

Ragu, on the debt ceiling thread, you continually argue the old trope that the rich are getting screwed because the poor don't pay any Federal Income Tax -- ignoring that federal income tax is a very narrow measure that doesn't come close to including all the taxes paid, and that in terms of overall taxation the rates are barely progressive if they are progressive at all. Here you argue that Warren Buffett is painting an inaccurate picture by limiting his argument to the Federal Income Tax instead of the full taxation picture.

Which is it -- is federal income tax an accurate measure of taxation? No, it is not, and you are acknowledging it here.

Your own politicized agenda comes shining through.

I've never got the sense that Ragu's argument is that the rich are screwed by the not-rich not paying much in the way of income taxes. Rather, I've interpreted his arguments to be that the not-rich aren't as savvy consumers of government as they might be otherwise.

And Buffett is being disingenuous. His effective tax rate, when you factor in the fact that his firms' profits are first taxed via the corporate income tax, is much higher than 17.4 percent.

 

[Boom_70]

Using Warren Buffett quotes as a validation of increased taxes has become a cliche.

Are we all expected to roll over just because Warren Buffett said it.