Why Does Warren Buffet Want to Pay More?

[Jackie S]

Warren Buffet can pay more taxes anytime he wants. Simply fire all of the accountants and lawyers he pays to find every deduction that is afforded to him, and do a simple short form like many of us out here do.

I have no deductions that amount to enough to lower my tax burden. 95 percent of my income is earned income.

After about his first $400,000, he will simply be paying 39 percent. That is, if he actually has any earned income. Maybe his W-2, if he even gets one, says $1.

[Munchmasterman]

Originally Posted by JD Barleycorn

At long last you find you have amassed over $2 million. Congratulations! You're rich and it only took you 20 years to get there. Now you put your money in investments and stop working. You were smart again and your investments gross about $100,000 a year. That is not income. It is taxed at 15% and not 38%. Do you feel bad because of that? Remember, that money already got taxed when you make it (in a legitimate profession). So now it gets taxed again. Wrong as usual. Your net increase is taxed. You don't pay more taxes on the original 2 mil. You pay taxes on the money the 2 mil makes Do you really feel that you should pay more?

Let me ask you about the spending? That curve in the graph is spending. It is going up pretty fast under Obama. If you had to take a pay cut doesn't it make sense to start spending less? Obama doesn't believe that. He is spending us into bankruptcy. Don't think that can happen? Study history and look at Greece. Bush spent too much but he does have somewhat of a reason; he was fighting terrorism which included two wars, new armored humvees, new armored vehicles, new aircraft (drones), new command centers around the world. Obama is paying for everything you mentioned too. Plus a crashed economy. Obama hasn't signed any big military contracts for ships, planes, or armor. Bush did the hard work and Obama is trying to take the credit. Signing the contract doesn't cost anything. You pay as you go. It takes years to build a ship and longer to finance it. Look at the carriers being built right now. They were approved almost ten years ago. It is like a highway up here. It was started in 2007 (Bush was president) and finished last year. Biden came down to talk about how much Obama was doing??? It was a Bush project and Obama wanted credit.Quotes? Text of speeches? Anything to back up your take on the subject?

The Bush tax cuts did not cause the recession. The tax cuts did not CAUSE the recession. They are responsible for a large part of our national debt. They also didn't keep the recession from happening or help dig us out after we got zapped. How did something that was in place for almost seven years before the bubble popped and was resigned by Obama twice cause this problem? The housing bubble burst pulling billions out of the economy.As usual, you over simplify. The causes are much more complex than this. People started losing their jobs. People who aren't working are paying less in taxes. Millions are not paying the taxes that they used to. That is how you increase revenue (like JFK and Ronald Reagan), You can increase revenue while growing the economy at a good rate by increasing taxes too. Like Clinton. you increase the number of people working and they pay taxes.

8 of 14 subs were contracted on Dec 22 2008. 1.5 years from keel laying to launch and 6 months from launch to delivery.
Of the last 3 carriers, contracts were awarded (1 of them) 0n Jan 26 2001. and (2 of them) on Sept 10, 2008. Using your 10 year number, Bush had nothing to do with the planning. 1 was bought the first week of his Presidency and 2 in the last month of it. It takes @ 3 years from laying the keel to launch and 2 years from launch to delivery.
22 destroyers built under Bush, 15 under Obama.
Of the 14 cargo and ammunition ships, 6 built under Bush, 8 under Obama

http://shipbuildinghistory.com/history/navalships.htm


"THE naval ships under construction in Austal's yard on the Mobile River in Alabama are only small by military standards: the littoral combat ship (LCS), pictured above, is 127.1 metres long, with 76 berths and room for 210 tonnes of cargo. It is designed for mine hunting, anti-submarine warfare and surface-warfare close to shore. The joint high speed vessel (JHSV), which will ferry troops and equipment, is 103 metres long with 312 seats and room enough on the top deck to park a helicopter. The contracts Austal won from the United States Navy do not seem small either: $3.5 billion in late 2010 to build 10 LCSs, and roughly $1.6 billion to build 10 JHSVs. (By way of comparison, Nimitz-class aircraft carriers, of which the navy has 10, are nearly 333 metres long and cost $4.5 billion each.) To the navy, these small ships are a big deal: 27 of the 55 new battle-force ships the navy plans to build between now and the end of FY2016 are either LCSs or JHSVs it builds in an assembly-line fashion that will eventually be able to crank out two JHSVs and two LCSs each year.".

http://www.economist.com/blogs/schum...l_shipbuilding


Bush entered into 2 un-funded wars (1 of which many consider to be unnecessary), bought the senior vote with the Medicare prescription plan (also un-funded). The cost for all 3 of these has increased, most if not all, each year since. Not only did he increase spending, he greatly reduced revenues with the tax cut. Obama only had a national economy in complete meltdown. No big deal.

[gnadfly]

Originally Posted by Jackie S

Warren Buffet can pay more taxes anytime he wants. Simply fire all of the accountants and lawyers he pays to find every deduction that is afforded to him, and do a simple short form like many of us out here do.

I have no deductions that amount to enough to lower my tax burden. 95 percent of my income is earned income.

After about his first $400,000, he will simply be paying 39 percent. That is, if he actually has any earned income. Maybe his W-2, if he even gets one, says $1.

Exactly. He'll also continue to pay the 1% Medicare tax on an unlimited amount of line 7 income.

Warren Buffett is just using his influence to drive the govt and markets from which he will profit.

Munchmasterman x 14,000 still equals 0

[Guest123018-4]

Nothing is stopping him from paying more. He can pay all he wants.
Buffet takes very little salary and pays taxes on his dividend income at a rate to him of 15 percent. Before he gets his dividends the money that is paid out is taxed at the corporate rate about 39 percent. The net result is income that is taxed at a hair under 50 percent. That figures out to half of your income from your investment.

SubS corporations are taxed as if the money was individual income so that the rate is less. Most small businesses are taxed this way. When Obama increases the taxes on those the rate will go up for small businesses as well.

[JD Barleycorn]

Deb, why so paranoid? You are beautiful (I think we all agree with that) but you really don't know how to have a cogntive argument. Where did you get the leopard skin?

[JD Barleycorn]

Munchie your post was a little confusing with all the different add ons and colors. You do mention contracted as your standard. Okay do you acknowledge that a contract is signed only after negoiations and planning. So a contract entered into in 2008 (when Bush was president) was planned years earlier during the Bush years. In fact most contracts entered into the first couple of years of Obama were probably funded by a much earlier congress. Remember all the blame being thrown around about the lack of armored humvees in Iraq. When do you think they were built? Not under Bush. They were contracted and built under Clinton. This doesn't exclude Bush from problems later in the wars but the early stuff is left over from Clinton, good or bad. The same thing goes for Obama. The early years of any spending came from Bush. So if you want to give credit or blame on the stimulus you have to give it to Bush. However, you have to blame Obama for how it was wasted and not the program itself.

[TheDaliLama]

..........see what happens when providers drink.

[gary5912]

[QUOTE=TheDaliLama;1051967940]..........see what happens when providers drink.[/QU
and she is from Cal. on top of that

[Texas Contrarian]

The thread title's question is based on a completely false premise.

Warren Buffett has absolutely no intention of paying significantly more in taxes, and even under the most aggresssive of the current tax increase proposals he would be under no compulsion to do so. However, he wishes to volunteer other wealthy individuals to pay more!

First of all, consider what a miniscule portion of Buffett's aggregate wealth accumulation ever appears on a tax return as "taxable income."

An op-ed that he wrote last year (calling for higher taxes on the wealthy) stated that he paid tax at an effective rate of about 17.4%, leaving him with a tax liability of about $7 million. That suggests that his "taxable income" was around $40 million. Let that sink in for just a minute. $40 million. Notice that that's less than one-tenth of one percent of Buffett's estimated $50 billion net worth, and almost certainly not much more than a couple of percentage points of the dividend income Buffett's portion of Berkshire Hathaway received from subsidiaries.

The simple and obvious point is that you could raise tax rates back to 1990s levels and it would hardly make any difference to Buffett.

Another important point is that if Buffett really did want to pay more tax, he could own most of that stock directly rather than through a corporate holding company sheltering vehicle such as Berkshire Hathaway. Most people don't realize that such corporations get an 80% exclusion on dividend income paid by companies in which they have greater than a 20% stake. Thus businesses owned by Berkshire Hathaway can upstream large amounts of cash to the holding company, which in turn pays corporate tax on dividend income at a rate of only 20% of what an individual holder would pay. (And no one is proposing corporate tax rate increases, only individual top-bracket rate increases.)

That's a big part of the reason Buffett's company is such a fantastic compounding machine. He can amass wealth on a mostly tax free basis, and he's been doing it for decades. Of course, almost all of Buffett's net worth will go the the Gates foundation and other charitable causes. Good for him. He obviously feels that they'll choose a more deserving set of beneficiaries that the U.S. government. (Hard to disagree with that opinion!)

What Buffett is essentially saying is that he wants and expects you to pay more tax if you are moderately affluent (but not rich), but he will make other choices regarding what to do with his money. The same is the case with many other wealthy individuals. I'm not telling you that that's right or just or fair; I'm simply telling you that's the way it is.

On the other hand, if you're affluent (but not wealthy) you may have no way to easily and conveniently escape increased levels of taxation. If your income sources are primarily salary, fees, or commissions, you'll pay a higher rate. If you're wealthy and they're primarily capital gains, you'll have choices regarding timing of realization, selling in a tax year in which you can partially or wholly offset with losses, choosing instead to borrow against an appreciated asset, etc. Those are just a couple of the reasons capital gains tax rate increases never raise anywhere near the revenue predicted by their supporters. In Buffett's case, a capital gains tax increase would affect him little, if at all. He hardly ever sells anything.

The long and short of it is that if Buffett were taxed at the rate he advocates for very high incomes, he might have to fork over about an additional $5 million each year. If you do the arithmetic and put that in perspective, you'll find it's equivalent to a person with a net worth of $1 million forking over an extra Benjamin. Not exactly a heavy burden.

But that's not all. Buffett is a wonderfully savvy investor, but he's also one of the ultimate crony capitalists. He's cut himself some amazing deals over the years, and he's very heavily invested (through Berkshire Hathaway) in a number of financial firms such as banks and insurance companies. So it behooves him to be on a first-name basis with as many powerful people in government as he possibly can. That way, he can have a better chance of greasing the regulatory skids in order to complete a sweet deal, or of at least maximizing his chances of achieving effective damage control if something goes wrong.

For Warren Buffett, forking over a rather miniscule (for him!) amount of money is another very sweet deal if his lobbying efforts on behalf of the U.S. Treasury curry favor with powerful people who have the potential to make things either much easier or much more difficult for him.

[CuteOldGuy]

Thanks, Cap'n, for pointing out what a phony bastard Buffett is.