Buffett Speaks The Truth

[Munchmasterman]

Originally Posted by Whirlaway

From the WSJ:

Barney Kilgore, the man who made the Wall Street Journal into a national publication, was once asked why so many rich people favored higher taxes. That's easy, he replied. They already have their money.
That insight is worth recalling amid the latest political duet from President Obama and Warren Buffett demanding higher taxes on "millionaires and billionaires." Mr. Buffett is repeating his now familiar argument this week, coinciding with Mr. Obama's Midwestern road trip on the economy. Since the media are treating Mr. Buffett as a tax oracle, let's take a closer look at some of the billionaire's intellectual tax dodges.

• The double tax oversight. The Berkshire Hathaway magnate makes much of the fact that he paid only 17.4% of his income in taxes, which he considers unfair when salaried workers often pay more. But Mr. Buffett makes most of his income from his investments, in particular from dividends and capital gains that are taxed at a rate of 15%.

What he doesn't say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%.






This onerous tax on capital is a U.S. competitive disadvantage in the global economy, which is why Congress agreed in 2003 to cut the rates on dividends and capital gains. Even as the rest of the world is cutting tax rates on corporate income, Mr. Buffett wants to raise U.S. rates in a way that would make America less attractive for investment. Under a sensible tax reform, the feds would impose either a corporate tax or a dividend and capital gains tax, but not both.

• The middle-class bait-and-switch. Like Mr. Obama, Mr. Buffett speaks about raising taxes only on the rich. But somehow he ignores that the President's tax increase starts at $200,000 for individuals and $250,000 for couples. Mr. Obama ought to call them "thousandaires," but that probably doesn't poll as well.

The President needs to levy his tax increase at such a lower income level because that's where the money is. In 2009, 237,000 taxpayers reported income above $1 million and they paid $178 billion in taxes. A mere 8,274 filers reported income above $10 million, and they paid only $54 billion in taxes.

But 3.92 million reported income above $200,000 in 2009, and they paid $434 billion in taxes. To put it another way, roughly 90% of the tax filers who would pay more under Mr. Obama's plan aren't millionaires, and 99.99% aren't billionaires.

Mr. Buffett says it's only "fair" to raise his taxes, but he's lending his credibility to raising taxes on millions of middle-class earners for whom a few extra thousand dollars in after-tax income is a big deal. Unlike Mr. Buffett, those middle-class earners aren't rich and may earn $250,000 for only a few years of their working lives. How is that fair?

• The charity loophole. For billionaires like Mr. Buffett, the single most important deduction in the tax code is for charitable giving. Middle-class earners can't give nearly as much money away to reduce their overall tax burden. Yet we don't hear Mr. Buffett calling for the elimination of that deduction in the name of fairness.

Editorial writer Mary Kissel on how Obama's taxes on "millionaires and billionaires" would hurt the middle class. Also, Bartley Fellow Charlie Dameron on Texas Governor Rick Perry's liabilities as a GOP presidential candidate.

Mr. Buffett has also already sheltered the bulk of his fortune from federal taxes by putting them into a foundation that will give the money away.

That's an act of generosity, but if the government's purposes are so vital, why doesn't he simply give the money to the IRS?

Rebecca Quick of CNBC put that question to Mr. Buffett in 2007. His answer: "Well, that's a choice and it's an option . . . If I had to give it to a single individual, or make some young Buffett a multibillionaire, or give it to the government, I'd absolutely give it to the government. I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government."

Mr. Buffett is no doubt right about the relative efficiency of private donors, but should billionaire philanthropists get such a large tax preference? Another case of fairness?

Mr. Buffett is one of the great stock-pickers of his time, and we don't begrudge him a single dollar of his wealth. We only wish that, having already made himself rich, he weren't so intent on making it harder for others to become rich too. If he's worried about being undertaxed, we'd suggest he simply write a big check to Uncle Sam and go back to his day job of picking investments.

Does anybody else think it is strange that the WSJ article gives a title to a tax deduction but offers no practical examples or income scenarios how it benefits anyone in particular? No allowable amounts or percentages? When I first saw this WSJ article posted, I was sure whirly had selectivly edited it. Nope. Talk about a nanny state. Now the WSJ says the same thing "adults" used to say to the "kids".

Cause I said so!

This article by the WSJ makes tax savings seem like the goal of giving money to foundations. Not increasing your net. In other words he gets the income that his “already been taxed” fortune generates and pays no federal taxes on the money he is going to give away using the foundation and it’s operating rules. Wouldn’t you come out better if you took the money you will owe on taxes in invest it for 6 month to a year? If you make $1 billion dollars, how much do you have to give away, to make ….more? The single point that the capital gains tax or the corp. tax should go was really the only thing that addressed investor’s concerns

I’m sorry I went and confused things by adding an actual number. I chose a billion because we are talking about a billionaire.



“But 3.92 million (approx 1.5% of the US population) reported income above $200,000 in 2009, and they paid $434 billion in taxes. To put it another way, roughly 90% of the tax filers who would pay more under Mr. Obama's plan aren't millionaires, and 99.99% aren't billionaires. To put it another way, a single guy/gal who makes $250,000 would owe an extra $1500. You know, an extra .6% of their total income.”

Sorry. Did it again. Went and added numbers to the wsj. Barney is spinning in his grave right now. A WSJ story without any numbers. A man many called the “Inventor of Modern Journalism”.Would he accept rhetoric without proof? No.

We’ve heard enough of the “F” word today. A fair ball is a ball in play and it’s not fair that the Yankees bought all those great teams. The first statement digital, the second analog (this statement addresses the way different groups use the word “fair”). It’s time for the “G” word. Get-‘ur-done! Stop bitching about being fair to 1.5% of the population. The sooner we pay this off the more money we’ll save. America is the country of “No”. We won’t take no for an answer.

The first economic group to attain the same status as “The Greatest Generation”.

“Middle America”. They gave unselfishly and answered America’s call. And saved us all.

Since Warren Buffet should keep his day job, so should these tools. Just report what you see and get the prices correct. Without further ado, some tax experts




http://ctj.org/taxjusticedigest/archive/2011/08/warren_buffett_is_right_the_wa .php


Warren Buffett Is Right, the Wall Street Journal Is Wrong



August 17, 2011 4:50 PM | Permalink |
Warren Buffett, the billionaire investor and CEO of Berkshire Hathaway, called for higher taxes for millionaires in a widely-noted op-ed this week. As expected, the Wall Street Journal reacted with a variety of misleading counter-arguments. We conclude that:

1. Buffett is correct that the tax breaks that benefit the wealthy investor class, like the capital gains and dividends preferences, are unfair.
2. The Wall Street Journal’s arguments that these types of investment income are double-taxed are incorrect.
3. Contrary to what the Journal claims, President Obama’s tax plan is in keeping with Buffett’s call for higher taxes on millionaires.

Billionaire Investor Is Right to Call for Higher Taxes for the Rich and End of Breaks for Investment Income
Buffett points out that middle-class Americans are being asked to “sacrifice” as Congress and the new twelve-member “super committee” search for ways to reduce the budget deficit, but millionaires have not been asked to sacrifice anything. He argues that the super committee should ask millionaires to pay at higher rates than they pay today and should also end or reduce special tax preferences for investment income, which makes up most of the income of millionaires.
Citizens for Tax Justice has long made the case that these tax preferences — the special low income tax rates for capital gains and stock dividends, should be repealed entirely.
CTJ offers the example of an heiress who owns so much stock and other assets that she does not have to work. She receives stock dividends, and when she sells assets (through her broker, of course) for more than their original purchase price, she enjoys the profit, which is called a capital gain. On these two types of income, she only pays a tax rate of 15 percent.
Now consider a receptionist who works at the brokerage firm that handles some of the heiress’s dealings. Let’s say this receptionist earns $50,000 a year. Unlike the heiress, his income comes in the form of wages, because, alas, he has to work for a living. His wages are taxed at progressive rates, and a portion of his income is actually taxed at 25 percent. (In other words, he faces a marginal rate of 25 percent, meaning each additional dollar he earns is taxed at that amount).
On top of that, he also pays the federal payroll tax of around 15 percent. (Technically he pays only half of the payroll tax and his employer pays the other half, but economists generally agree that it’s all ultimately borne by the employee.) So he pays taxes on his income at a higher rate than the heiress who lives off her wealth.
What make this situation even worse are the various loopholes that allow wealthy individuals to receive these tax breaks for income that is not really even capital gains or dividends. As Buffett explains, fund managers use the “carried interest” loophole to have their compensation treated as capital gains and taxed at the low 15 percent rate, while the “60/40 rule” benefits traders who “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.”
CTJ has found that if Congress simply repealed the preference for capital gains entirely, three fourths of the tax increase would be borne by the richest one percent of taxpayers. (See page 19 of this report for estimates.) The tax preference for dividends expires at the end of 2012 if Congress does not extend it.
The Myth of Double-Taxed Investment Income
The Wall Street Journal starts with the following complaint about Buffett’s argument that his capital gains and dividend income is insufficiently taxed:
“What he doesn't say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%.”
Anti-tax ideologues often claim that corporate profits are taxed twice, once under the corporate income tax and then again under the personal income tax when the shareholders receive them in the form of capital gains and dividends. There are several fatal flaws in this argument:
First, many corporate profits are not taxed, as GE, Verizon, Boeing, and many other corporations have demonstrated.
Second, two thirds of those dividends are actually paid to tax-exempt entities like pension funds or university endowments.
Third, a capital gain from selling a corporate stock is not necessarily a form of corporate profit. If stock value rises based on some expectation of a future increase in profits (which a drug company might enjoy after the FDA approves a new product, for example) that does not have anything to do with profits that the company has already received or paid taxes on.
In any case, the capital gains earned outside of tax-exempt plans are not taxed until shareholders sell their corporate stock at a profit, meaning those gains can be deferred indefinitely. Even when shareholders do report capital gains they often offset them with capital losses.
If one applies the logic of the “double-tax” argument more broadly, one would have to conclude that the wage and salary income of ordinary Americans is subject to several forms of taxes that wealthy investors don’t worry much about. For most Americans, income consists entirely of wages and all of it is subject to Social Security taxes and much or most of it is subject to the federal income tax. Then when people spend their income, a great deal of their purchases are subject to sales taxes.
Somehow the Wall Street Journal and its devotees only express concern over taxing income multiple times when wealthy investors are involved.
Ending Tax Cuts for Income Over $250,000 Actually Targets Millionaires
The Wall Street Journal also complains that, “Like Mr. Obama, Mr. Buffett speaks about raising taxes only on the rich. But somehow he ignores that the President's tax increase starts at $200,000 for individuals and $250,000 for couples.”
But President Obama’s plan does target millionaires. A recent report from Citizens for Tax Justice explains that if enacted in 2011, 84 percent of the revenue savings from Obama’s income tax plan would come from people who make more than $1 million annually.
What is often not understood is that Obama’s plan would leave in place the Bush income tax reductions for the first $250,000 of adjusted gross income (AGI) for all married couples (and the first $200,000 for all unmarried taxpayers).
A married couple with adjusted gross income of $250,001 would pay higher taxes on at most one dollar, and face a tax hike of only 3 cents at most. But even that tiny tax hike would be extremely rare, since almost all couples at that income level itemize deductions. Typically, couples would have to make more than $295,000 before they lost any of their Bush income tax cuts.
Married taxpayers with incomes between $250,000 and $300,000 would lose just one percent of their Bush income tax cuts, on average, under President Obama’s plan.
The Wall Street Journal calls taxpayers with AGI in excess of $250,000/$200,000 “middle-class.” CTJ estimates that in 2013, when the Bush tax cuts are scheduled to expire, only 2.6 percent of taxpayers will have adjusted gross income in excess of the $250,000/$200,000 threshold.
This shows that President Obama is asking too few, rather than too many, Americans to pay higher taxes than they do today

[Munchmasterman]

Originally Posted by Doove

Sourced.

Perhaps Whirlaway, when he gets done telling us the difference between playing golf and bike riding or working out (chirp chirp), can post a graphic indicating to what extent the Republican/Tea Partiers are on the side of the American people.

Thank God it included Rasmussen. A 56% there is higher than I expected.

[Laz]

Is there anyone out there that really believes that Congress would not squander any additional revenues it received. How about we agree that increasing taxes on the wealthy is ok whenever the budget is balanced and the increased taxes only go to reducing the deficit. Congress would then have more money to squander because less money would be spent on interest payments.

[nevergaveitathought]

Originally Posted by Laz

Is there anyone out there that really believes that Congress would not squander any additional revenues it received. How about we agree that increasing taxes on the wealthy is ok whenever the budget is balanced and the increased taxes only go to reducing the deficit. Congress would then have more money to squander because less money would be spent on interest payments.

thats the issue in a nutshell. some just want to take the focus off the issue and and say pay no attention to the man behind the curtain...... the rich arent paying their fair share ya know, they say.........that line probably has been focused grouped and has been found to confuse the confusable and rile the resentful and salivate the covetous.... so the great and powerful use it... and so they sit atop the people and pass out crumbs to those who toe the line...damaging the country while exclaiming the virtuousness of their caring position....

where is truth and principal and self pride among the people? will all vote themselves a paycheck til the bitter end? i think there is a great awakening

but the great beast of liberalism will thrash about and continue its great damage even in its throes of pain whilst being cast aside

[Munchmasterman]

Originally Posted by nevergaveitathought

thats the issue in a nutshell. some just want to take the focus off the issue and and say pay no attention to the man behind the curtain...... the rich arent paying their fair share ya know, they say.........that line probably has been focused grouped and has been found to confuse the confusable and rile the resentful and salivate the covetous Talk about a line from focus groups.... so the great and powerful use it... and so they sit atop the people and pass out crumbs to those who toe the line...damaging the country while exclaiming the virtuousness of their caring position....

where is truth and principal and self pride among the people? will all vote themselves a paycheck til the bitter end? i think there is a great awakening

but the great beast of liberalism will thrash about and continue its great damage even in its throes of pain whilst being cast aside

So let's just say "fuck it!" and not try anything.

Since anything we do will only really help the people in power, let's just wait another year and a half. Yeah, that's it. We'll just keep on keepin' on.

You just waxed lyrical on a set of lines to totally confuse the issue. I would reply with you are a wellspring of confusion that flows across our great nation, turning from a babbling brook of bullshit, into a raging and roaring river of ruinous recriminating rectal refuse.

The issue isn't that the rich don't pay their fair share. The issue is where can we get the money we need. Who can afford to pay more than their fair share and suffer the smallest injury?

Repealing the Bush tax cuts, which looks like about 66% of voters want combined with spending cuts, will either happen or the republicans will explain why they chose the tyranny of the minority to combat a super majority of the population. Democrat or republican’s vote, plus the votes of moderates equal 66%.

How quickly they forget.

[WTF]

Originally Posted by Munchmasterman

So let's just say "fuck it!" and not try anything.

.

Munch, you forget you are debating a person steeped in beliefs, not facts.

People like him are the free loaders. They want wars and military until it comes time to pay for them. They love them some welfare for the rich but hate giving to poor anything.

They speak of focus groups and do not have the good sense to realize that they are a GOP's focus groups wet dream. Frank Lutz, gets a hard on for misinformed folks like him.

They do not understand science. They are emotional in their thought process. They need to learn wtf science is. But of course, they are to scared of God to actually learn something.

[Laz]

How about letting Congress and the president act resposibly before we discuss how they can steal more money from the citizens. That is doing something. How about throwing out idiots that are more interested in pushing their agenda and beliefs down the throat of the people regardless of the cost or even if it is a good idea. There are people in both parties that fit that description with Obama being one of the worst.

We have been doing the same thing for decades and expecting different results. We cannot expect elected officials to be resposible. They have proven they are not. We need to have lagal constraints such as a balanced budget amendment to force responsible behavior.

[Doove]

Originally Posted by Laz

How about throwing out idiots that are more interested in pushing their agenda and beliefs down the throat of the people regardless of the cost or even if it is a good idea. There are people in both parties that fit that description with Obama being one of the worst.

The fact that you would say this with 23 polls staring you in the face showing that, by a 2 to 1 margin, the American people wanted what Obama wanted, only to have the opposite shoved down our throats by the arm twisting bullies on your side of the aisle, speaks volumes.

[Laz]

Polls are worthless and used to support a persons point of view. How a question is asked the questions that are not asked and numerous other things allow people to determine the results and then wave them around as fact. There are far more people that feel like me. The other thing is my statement applies to a lot of issues not just 1 item as your response implies. As to the tax issue I wonder what the result would be if a poll question asked do you want congress to eliminate all waste before stealing more money?

[Guest040616]

Originally Posted by Laz

Polls are worthless and used to support a persons point of view. How a question is asked the questions that are not asked and numerous other things allow people to determine the results and then wave them around as fact. There are far more people that feel like me. The other thing is my statement applies to a lot of issues not just 1 item as your response implies. As to the tax issue I wonder what the result would be if a poll question asked do you want congress to eliminate all waste before stealing more money?

Let me guess.

You regularly attend parties where the only thing served is Tea? Do you prefer yours sweet or unsweet? With or without ice? With mint or without? Hot or cold?

Laz, you've been busted!

[Doove]

Originally Posted by Laz

Polls are worthless and used to support a persons point of view. How a question is asked the questions that are not asked and numerous other things allow people to determine the results and then wave them around as fact.

All 23 of 'em?

There are far more people that feel like me.

Uh huh. You base that on??????

As to the tax issue I wonder what the result would be if a poll question asked do you want congress to eliminate all waste before stealing more money?

Without giving one example of poor questioning, you whine about the results of 23 different polls because they didn't use your absurd line of questioning.

What a tool.

[surcher]

Originally Posted by Laz

Polls are worthless and used to support a persons point of view. How a question is asked the questions that are not asked and numerous other things allow people to determine the results and then wave them around as fact. There are far more people that feel like me. The other thing is my statement applies to a lot of issues not just 1 item as your response implies. As to the tax issue I wonder what the result would be if a poll question asked do you want congress to eliminate all waste before stealing more money?

Ok, where's the poll that supports your point of view and the far more people who feel like you? Feeling is emotional and it's unfortunate you and those others feel rather than think! With that rational, I

[Laz]

Bigtex:

Yes I am a fiscal conservative and support the Tea Party in that view.

Doovie and Surcher:

My belief in how people feel is not based on anything but my opinion and conversations with people I know which I have more faith in than some that post here. Yes I know that is also biased because most of the people I associate with are rational. If I had the money or desire I could easily craete 23 polls that support me.

You did not address what you think the results would be if my question was asked you just keep pushing the same idiocy of the Democratic party. Before you get your panties in a twist I believe ther are plenty of Republicans that are just as irresposible.

[Guest040616]

Originally Posted by Doove

All 23 of 'em?



Uh huh. You base that on??????



Without giving one example of poor questioning, you whine about the results of 23 different polls because they didn't use your absurd line of questioning.

What a tool.

It is not just 23 polls, it includes Faux's favorite Tea Party poll, Rasmussen where 56% were in favor of raising raxes and the Wall Street Journal where 62% were in favor!

It is apparent those sipping the watered down Tea are wayyyyyyy out of the mainstream!

But we already knew that!

[SkyDriver]

Instead of raising Buffet's taxes, lets bring his secretary's down. Raising Buffet won't help her.