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06/28/2007 06:08 PM ID: 63303 Permalink   

Billionaire Wants to Pay More Taxes

 

Warren Buffet, who at $52 billion is the third richest man in the world, blasted the U.S. tax system for allowing him to pay a lower income tax rate than his secretary and his cleaning lady do.

A speaker at a fundraiser for Hillary Clinton, Buffet said, "If you're in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent."

Buffet's secretary was taxed at a rate of 30 percent of the $60,000 she earned last year. Buffet, without seeking tax shelters or loopholes, paid less than 18 percent of his $46 million in income last year in tax.

 
  Source: business.timesonline.co.uk  
    WebReporter: l´anglais Show Calling Card      
  Recommendation:  
ASSESS this news: BLOCK this news. Reason:
   
  38 Comments
  
  Thats a decent fellow  
 
Seems like a good guy to not play the tax dodge game and pay his dues. Heck, even fighting for the little guys.
 
  by: seniorgato     06/28/2007 06:12 PM     
  Love the world "luckiest"  
 
Not "best," "smartest," "most successful," but "luckiest." He's absolutely right.
 
  by: l´anglais     06/28/2007 06:16 PM     
  Meant to say 'love the WORD' NT  
 
 
  by: l´anglais     06/28/2007 06:17 PM     
  Go Buffet!  
 
 
  by: fballer23   06/28/2007 06:18 PM     
  Good for him....  
 
"If you're in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent."

That's what 99% of rich cronies just don't understand.
 
  by: Lurker     06/28/2007 06:20 PM     
  Well  
 
If he feels so horrible about having to pay less taxes than his maid and secretary, why didn't he just pay their taxes for them? Call it a bonus. Of course, he could just give it to me.
 
  by: ablindmansees     06/28/2007 06:28 PM     
  More from the source  
 
Lloyd Blankfein, the chief executive of Goldman Sachs, acknowledged in an interview yesterday that there were justified concerns about the huge profits generated by private equity firms and that he worried that income inequality was “poisoning democracy”. He also said that he would be voting for the Democrat candidate at the next election. Mr Blankfein is the highest-paid executive on Wall Street, earning $54 million last year.

Mr Buffett, who runs the investment group Berkshire Hathaway and is widely regarded as the world’s most successful investor, said that he was a Democrat because Republicans are more likely to think: “I’m making $80 million a year – God must have intended me to have a lower tax rate.”

Mr Buffett said that a Republican proposal to eliminate elements of inheritance tax, which raises about $30 billion a year from the assets of about 12,000 rich families, would broaden the disparity between rich and poor. He added that the Republicans would seek to recover lost revenue by increasing taxes for the less prosperous.

He said: “You could take that $30 billion and give $1,000 to 30 million poor families. Or should you favour the 12,000 estates and make 30 million families pay an extra $1,000?”
 
  by: l´anglais     06/28/2007 06:46 PM     
  @ablindmansees  
 
Why? Because that might satisfy his own morality, but it wouldn't do squat to fix the system, and he apparently knows it.
 
  by: velger   06/28/2007 08:17 PM     
  He's going to give most of it away  
 
Largest donation in American history. I remember seeing him comment on some bet he had with Gates, or some sort of dare, that he wouldn't actually donate the money to Bill's foundation. Bonus points for anyone who can find out what was said between them.

http://money.cnn.com/...
http://www.washingtonpost.com/...
 
  by: caution2     06/28/2007 09:03 PM     
  @velger  
 
It's a sensationalized argument anyway. So he only pays ~18% he's paying three times more in taxes than his cleaning lady makes in a year. You have to look at it in context. Furthermore a lot of his income comes from non-taxable means. This goes back to what you think is more efficient, trickle down economy or bottom-up. Besides, there's nothing stopping him from paying more in taxes than he is legally obligated to do.

Let's look at this from a mathamatical standpoint that someone else used, Mr. Buffet earned $46,000,000 for 2006. Assuming that his taxable income is a mere $1,000,000 he would have paid $177,000 being 17.7%. Now let´s assume that his receptionist's taxable income is a pathetic $10,000 for 2006 and unfairly taxed at 35% (US max rate), which would be $3,500.

He may be in a lower tax bracket, but he's definitely paying more. We live in a capitalist soceity, not a Marxist one, we don't steal from the rich and give to the poor, and I for one have no intention of trusting the government with more of my money than absolutely necessary for them to squander away.
 
  by: ablindmansees     06/28/2007 09:06 PM     
  As a free marketier  
 
Private equity is the biggest threat to democracy and capitalism we've yet met.
 
  by: GogeVandire   06/28/2007 09:59 PM     
  @Goge  
 
Interesting -- could you expound on that?
 
  by: sbenglish     06/28/2007 11:36 PM     
  Of course  
 
Recently, several banks tried to buy another, ABNAmro.

Barclays, the winner, was pretty much ordered to drop thge bid by one of its share holders, this share holder being a private equity firm, who also happened to own part of a different bidding bank.

PE comes under no legal oversight, the recent bond collapse is quite possibly their handywork too.
 
  by: GogeVandire   06/28/2007 11:45 PM     
  @ablindmansees  
 
The issue is that, despite the mathematics of it, the plain fact is that the vast majority of the tax burden falls upon the lower and middle classes. It isn't about paying more or paying less -- it's about paying your fair share.
 
  by: velger   06/29/2007 12:55 AM     
  The first politican that supports..  
 
and gets a bill past for a FLAT tax rate will earn my vote and respect. A flat tax rate will eliminate all loopholes and other "perks"..
 
  by: CaveHermit   06/29/2007 02:54 AM     
  Different types of taxation  
 
What everyone is overlooking is the how differently Buffet and his secretary are being taxed.

His secretary is paying Wage Taxes. Over 90% of Buffet’s taxes are Capital Gains Taxes.

What’s the difference?

Wage Taxes is exactly what it implies: You’ve exchanged time and work for a wage and this money is taxed according to your income’s tax-bracket. Under this tax platform, the rich DO get taxed more than those earning less (your family and marital status will also affect this).

The majority of Buffet’s income comes from investments. This type of income is called Capital Gains. This tax is substantially lower than Wage Taxes due to the risk associated with this type of income. What risk?

1st scenario… Let’s suppose that you were fortunate enough to buy 1000 shares Enron stock in the early 90s and sell it @ $82 p/share when it peaked in January 26, 2001, before their notorious scandal. You would have been able to make quite a profit. This profit would be taxed as Capital Gains tax.
2nd scenario… Let’s suppose you bought you got to the game late and bought Enron stock when it peaked and held onto it. By the time the FTC released their lock-out of Enron stock (after FTC investigations), the stock was selling for pennies. You would have suffered a considerable loss.

Capital Gains taxes are considerable lower because if you come out ahead (scenario 1), you must give Uncle Sam a slice of your good fortune. BUT in the event you lose money (scenario 2), you’re the one left holding the empty bag and Uncle Sam doesn’t give anything back.

So, as you can see, it’s not a matter of rich getting tax breaks over the poor. In the situation with Buffet and his secretary, it’s all about HOW you make your income that will affect how you’re taxed.

The Dems are currently in the process of introducing legislation to raise the Capital Gains tax… and Wage Taxes. Damn them.
 
  by: CArnold     06/29/2007 02:58 AM     
  Well...  
 
Who would have guessed that people on SN support forced government wealth redistribution?
 
  by: _undead   06/29/2007 08:12 AM     
  Well...  
 
@_undead
technically all taxes are forced wealth distribution, and although Carnold gave a good explanation, i do think there needs to be tax reform in the USA.
The USA needs the money now anyways, too many loans overseas that undermine its economy
 
  by: tiggyfiggy   06/29/2007 02:11 PM     
  Buffet for President...  
 
I mean why not. Could be worse... oh wait a minute it is worse ;)
 
  by: zephan     06/29/2007 03:09 PM     
  A theory  
 
So many people against this idea have these nasty, sarcastic, bile-spewing personalities. My theory is that they're so greedy that they can't even defecate -- that seems too much like giving something away to them -- so they're constipated, grumpy and full of sh!t.
 
  by: l´anglais     06/29/2007 03:37 PM     
  I agree with Warren  
 
I know he’s not having any shortfalls putting gas in his limo or paying his utility bill. I know a lot of people around here that are really feeling the gas and utility price increases, and I have noticed how the food prices are soaring in the grocery stores due to transportation costs. Expect it to get rapidly worse and prepare for the fall of the empire. The civilization of oil is in its death throws. Unless we get fusion up and running on a viable scale we are doomed. I would like to see Warren put his riches into making Fusion a reality and ending the oil era.
 
  by: Valkyrie123     06/29/2007 04:05 PM     
  @Valk  
 
Sadly he's too busy making youth clubs for the underpriveledged.
 
  by: Gogevandire   06/29/2007 04:11 PM     
  To a few people on here  
 
Buffet is a great guy. I recently watched a mini-documentary on him and all of his employees love him, how could they not when he has such a postive mindset? This could probably be linked to his success as well, but that's just my opinion.


CArnold:

Hi, it's banshee9898. Nice explanation of the capital gains tax, I didn't know all of that.

I also agree that we don't nessicarily need to pay more taxes, I believe we just need better tax management. Remember the news story that came out the day before 9/11 that said over 2 trillion (trillion with a T) of our tax dollars are unaccounted for? Talk about tax reform... :P



Valk:

I think you're right and I see the same thing happening. As does Ron Paul. IMO we've got at least a few more years until it can get really bad. And if we attack Iran, that'll give us a few more years still (even though by doing so things would likely get much worse worldwide than if we didn't). No worries tho, the first step to evading a trap is to know that it exists. :D

 
  by: QuestioningAnswers   06/29/2007 06:21 PM     
  actually  
 
they don't like to be called rich chronies they prefer to be called "Fat Cats" chronies? that's shear poppycock!
 
  by: DRK   06/29/2007 11:54 PM     
  it's about time rich people stopped being greedy  
 
now if someone could just convince bill gates, this country might be able to get back into decent shape
 
  by: yerpdizzle   06/30/2007 04:07 AM     
  in India  
 
In india long term captail gains(1 year) are 0%.
This is in equity.
 
  by: ajfrod   06/30/2007 02:02 PM     
  @yerpdizzle  
 
Bill Gates actually *gives away* vast amounts of his fortune through the Bill and Melissa Gates Foundation -- you might want to read up on that.
 
  by: l´anglais     06/30/2007 04:04 PM     
  @CArnold  
 
"The majority of Buffet’s income comes from investments. This type of income is called Capital Gains. This tax is substantially lower than Wage Taxes due to the risk associated with this type of income. What risk?"

What risk indeed for investors like Buffet? He's certainly not going to lose anything that hurts on the stock market. Now, for the average investor, I can see where there is a true risk/reward system at play, because day trader types really can lose a good chunk of their wealth on a bad investment.

What I don't like about low capital gains taxes is that they encourage the whole investor culture. In corporate boardrooms, this invisible mass of a company's investors becomes God -- a God which apparently only cares about the value of their holdings right then and there. So corporations are not only stifled from taking risks of their own for fear that investors will bail out if that risk entails enduring a period of falling stock value, but corporations are also encouraged to ignore laws set up to protect society if those laws inhibit profitability.
 
  by: l´anglais     07/01/2007 04:03 PM     
  capital gains vs wages  
 
I understand the economic incentives described by carnold, but still, it has never really sat well with me that those who earn without working are taxed less than those who earn by getting up and working everday.

Why should a rich person who has the means to get richer solely on investments (which are not necessarily risky or beneficial to the economy) be taxed less than those doing 40+ hour weeks struggling to get by?
 
  by: reverend j roach     07/02/2007 06:22 AM     
  @Langlais  
 
87.5% of the FTSE 350 is owned by pension funds and savings plans.

Why is Buffet less likely to lose money than anyone else?
Well, beyond he's smarter than most fund managers, but frankly so are children.

@Rev
"I understand the economic incentives described by carnold, but still, it has never really sat well with me that those who earn without working are taxed less than those who earn by getting up and working everday."
I get up and go to work everyday, I'm just very frugal and save and invest as much as I can so that one day I wont have too.
You get up and go to work everyday, to where exactly?
Where did that work place come from?
Why, from capital provided by private investors, and if that company should bankrupt, you'll get your wages, but they wont get back their investment.

If you feel you can get rich from risk free investments, I encourage you to try.

Had you bought river diamonds shares at 1pm GMT today, abnd sold them now, you could have made 36% profit in a few hours.
You could have bought research now shares this morning, and sold them 10minutes later for a 40% loss, you could have bought them when they hit bottom, but of course you dont know when thats going to be.
In this case, you could have bought them at 210 and sold them a few hours later for 250.

For "safe" investments, if you have $10,000 to spare, you can get 3.65% net yield on a 1 year fixed bond.
It has to be a full year though.
Hardly stellar returns, my current account isnt much worse.
 
  by: Gogevandire   07/03/2007 05:03 PM     
  @Goge  
 
I wasn't clear -- I'm more talking about reality, in which Buffet could lose well over half of his wealth and never personally miss it.

"Where did that work place come from?
Why, from capital provided by private investors, and if that company should bankrupt, you'll get your wages, but they wont get back their investment."

So they've banned partnerships and sole proprietorships now, have they? What about if Rev. works for the government or a non-profit?

Also, I had a company that I worked for go out of business, and I got two things -- jack was one of them -- even though I was due a week's worth of pay. That happens all the time in America -- a colleague of mine worked at a place where nobody was paid in anything but promises for the last month before the company went out of business, and in the end, they all walked out with the company's computers.

You're really quite stupid, aren't you?
 
  by: l´anglais     07/05/2007 06:44 PM     
  Ouch  
 
Gotta love it when the attacks get personal.
 
  by: ablindmansees     07/05/2007 06:54 PM     
  @l'anglais  
 
"You're really quite stupid, aren't you?"

99% of the world thought that of Columbus when he said the world was round... Guess who got the last laugh?


Goge is actually right on cue with his assessment. If you think he's not, open an account on eTrade, put in $5K and pick out a few stocks of your choice. Within a few days, you'll see just how volitile and risky investments become.
 
  by: CArnold     07/06/2007 08:22 AM     
  @QuestioningAnswers  
 
Hey Banshee!
Long time no hear! Great points. I agree with most of what you said...

Ultimately, a smaller government would equate to smaller taxes and greater quality of life for all.

This is where Dems and Repubs disagree...

Dems want big gov't. Bigger gov't = more taxes.

Repubs believe in small gov't and more free enterprise.

IMHO, free enterprise is the way to go. Heck, it's lent itself to the development of our country as a the primary SUPER-power in economy, exports (believe it or not), and human rights.

Good to see you back BTW. And I think your new "handle" suits your personality much more faithfully. :-)
 
  by: CArnold     07/06/2007 08:41 AM     
  @Gogevandire  
 
I understand the risks of investment, but wouldn't the risk almost cancel itself out. Meaning, the chance of great reward is balanced out by the possibility of great loss.
So shouldn't it be taxed the same? It's just like gambling. You win some, you lose some
 
  by: tiggyfiggy   07/06/2007 08:53 AM     
  @Langlais  
 
I wasn't clear -- I'm more talking about reality, in which Buffet could lose well over half of his wealth and never personally miss it.

"He'd still have lost it, and since he's started dabbling in futures in now, he could lose a lot more than he's got."


"Where did that work place come from?
Why, from capital provided by private investors, and if that company should bankrupt, you'll get your wages, but they wont get back their investment."

So they've banned partnerships and sole proprietorships now, have they? What about if Rev. works for the government or a non-profit?

"Do you known what Capital is?
Really, not as a word you can use in a sentance, do you known the meaning of the word?.
If he works fgor a sole trader or a pertnership, those will have capital, if its his partnership/sole trader, he will have put in part of the capital.
If he worls for the government, then he's paid by us, and government spending doesnt help the economy long term."


Also, I had a company that I worked for go out of business, and I got two things -- jack was one of them -- even though I was due a week's worth of pay. That happens all the time in America -- a colleague of mine worked at a place where nobody was paid in anything but promises for the last month before the company went out of business, and in the end, they all walked out with the company's computers.

"Dont get paid on promises then, I wouldnt.
When Daewoo motors wenmt under a friend of mine drove off in a brand new car, and yes with her computer in the back seat."

"You're really quite stupid, aren't you?"

No, you just have no idea what your talking about, and you really dont seem interesated in learning.

http://www.LSE.co.uk.
Youve got an imaginary £5000, go to that site, make imaginary trades, come back in a week and tell us how much of a profit you've made, if its so easy.
If your really sure its so easy, put real money into E trade like carnold suggested.

 
  by: GogeVandire   07/06/2007 08:57 AM     
  @Tiggy  
 
"Meaning, the chance of great reward is balanced out by the possibility of great loss.
So shouldn't it be taxed the same? It's just like gambling. You win some, you lose some"

Except you dont get tax relief on your losses.
Thats the entire point.

Your stock get a take over bid and doubles in price over night, the governments right in there for its 30 pieces of silver.
Your stock, lets say your an oil exploration firm, spends everything on a failed project, your left with nothing, and the govertment isnt interested.
 
  by: GogeVandire   07/06/2007 09:04 AM     
  Carnold  
 
Hey thanks, I would have had this handle sooner, but didn't get banned soon enough :P.

I agree that smaller government and free enterprise is the way to go. I'd just like to see it more in action. Now we've got the department of homeland security which IMO is an expansion of government, not to mention the patriot act which is now permanent and the government's new spy powers.

I also am unsure where this $8.4 billion a month for a never ending war is ultimately going to come from. I may be wrong, but it looks to me like this eventually means higher taxes no matter what we do.

Either way, it seems to me that even if we voted for smaller government and lower taxes, we ended up getting the exact opposite. Gotta love war.
 
  by: QuestioningAnswers   07/09/2007 07:31 AM     
 
 
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