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  1. #21  
    Quote Originally Posted by moderateinny View Post
    He is smarter than that. He puts that money to better use helping others in more need than the US government.
    Your statement does not address my comment to his statement that he thinks he does not pay enough taxes. I simply point out that if he truly believes that he does not pay enough taxes, he can easily remedy that situation by paying any amount up to his total net worth to the US Treasury. Until he starts voluntary payments over and above what the law requires, I will cry BS on his position.

    What he does with he money is his private business. When he advocates tax increases then I have a stake in the game.

    For what it is worth, I agree that he is probably doing more for the economy and populace by investing than paying more taxes, but that was not the position he took, so to bring it into the conversation is a red herring.

    Quote Originally Posted by moderateinny View Post
    Not sure why you have to be "evil" to be "rich." There are those in the upper 1% of incomes that are quite nice and charitable people. Despite your apparent disdain for him, Mr. Buffet is one of them. But I think you're stating in the simplest of terms that you believe in a capitalistic society and for the most part, I would agree. But I have to wonder why you think a flat tax equates to communism?
    First, the "evil" and "rich" refer to the general slur often used by propoents of increased taxation on wealth, and was obviously used as sarcasim.

    Second, I did not exhibit distain for Mr. Buffett. My distain is rather for his statement. Odd though it may seem, I can oppose a position one takes while having no feeling pro or con for the person taking that position.

    Third, this is a simple thread on a web site, not a doctoral dissertation. Keeping things simple is merely polite and wise lest someone misread and/or misinterpret (intentionally or not) what one says.

    Which brings us to the Fourth and final point: I never addressed in any way the concept of flat taxation. In fact, I made no mention to taxation in aby way beyond stateing that Mr. Buffett is free to volunatrily increase his personal tax level up to 100% at any time he so chooses.

    What I did do was infer/refer to one of the key principles of Marx Communist Manefesto, "From each according to their ability, to each according to their need." It was not I who brought "need" into the discussion. I only rebutted the notion presented by pointing out that few would actually chose to live with only their "needs" and what "needs" are. Since this meshes so well with Communism, I used the inference, bringing the circle to a close with "evil" and "rich" as noted above.

    Not that it matters in this topic, but I happen to be a strong supporter of the Fair Tax bill (consumption tax), but not a flat tax.
  2. #22  
    I think there's been a misunderstanding of what Buffett said -- (though its in the original post I think)

    Though he makes a TON of money, for "doing" little -- his workers are burdened with a much larger percentage of taxes.

    This despite the fact that Buffett makes no special effort to avoid or lessen his obligations using common mechanisms available to the rich like tax shelters, overseas tax havens etc.

    This is at least in part to the way that payroll, sales, and property taxed are structured -- and most egregiously in the case of Soc. Sec. taxes. And the way that capitol gains and income taxes were tilted in favor for the rich by junior (and raygun in the 80's).

    Steve Balmer pays much less in percentage terms than most of you.
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  3. #23  
    The rich are not rich because of tax advantage, but because of a knowledge (their own or their aides) of (1) how to accumulate and maintain financial resources; and (2) how to take advantage of the laws as written. If you re-write the laws, the rich will adapt, while the poor will adopt.
  4. #24  
    Quote Originally Posted by shopharim View Post
    The rich are not rich because of tax advantage, but because of a knowledge (their own or their aides) of (1) how to accumulate and maintain financial resources; and (2) how to take advantage of the laws as written. If you re-write the laws, the rich will adapt, while the poor will adopt.
    I would agree with one minor change - the rich are not rich "entirely" because of tax advantages.
  5. #25  
    Quote Originally Posted by BARYE View Post
    I think there's been a misunderstanding of what Buffett said -- (though its in the original post I think)

    Though he makes a TON of money, for "doing" little -- his workers are burdened with a much larger percentage of taxes.

    This despite the fact that Buffett makes no special effort to avoid or lessen his obligations using common mechanisms available to the rich like tax shelters, overseas tax havens etc.

    This is at least in part to the way that payroll, sales, and property taxed are structured -- and most egregiously in the case of Soc. Sec. taxes. And the way that capitol gains and income taxes were tilted in favor for the rich by junior (and raygun in the 80's).

    Steve Balmer pays much less in percentage terms than most of you.
    I agree. I find it odd that someone would take Mr. Buffett to task because he had the audacity to be honest about an unfair tax code. As you've said he doesn't go out of his way to shelter his money and avoid paying taxes like so many others with his wealth do. For all we know, maybe he does pay extra taxes...he never said that he didn't did he? Moreover, whose to say he isn't taking what he feels he may pay in taxes if the system were more fair and plowing it into an employee profit sharing program or something?
    Last edited by moderateinny; 11/03/2007 at 11:17 AM.
  6. #26  
    Quote Originally Posted by mgriffith View Post
    Your statement does not address my comment to his statement that he thinks he does not pay enough taxes. I simply point out that if he truly believes that he does not pay enough taxes, he can easily remedy that situation by paying any amount up to his total net worth to the US Treasury.
    How do you know he doesn't?

    Until he starts voluntary payments over and above what the law requires, I will cry BS on his position.
    BS over his position that the system is unfair? How do you know what he does to make things right for his employees? How do you know he isn't directing some of that money back into the government by way of lobbyist he employees to fix the system? I doubt he does. But I also doubt either of us really knows.

    What he does with he money is his private business. When he advocates tax increases then I have a stake in the game.
    Well at least your honest. Not everyone that owns a business and lives the American dream are afraid to be responsible citizens and play on a level playing field.

    For what it is worth, I agree that he is probably doing more for the economy and populace by investing than paying more taxes, but that was not the position he took, so to bring it into the conversation is a red herring.
    I guess we'll just have to agree to disagree. I don't see how it's a red herring at all. You act as though his voluntary extra taxes would somehow change the system - it would not. He is one of the brightest and most respected investors in the world for a reason and I'm sure that he knows full well that he can leverage his celebrity and status as one of the super-rich to try and change the system, however, paying extra taxes will hardly put a dent in a very complicated system and the process to change it. So until the system in fixed and congress can balance a checkbook, I for one don't blame the guy for throwing good money at a bad system. Nor am I calling his use of the media to bring attention to the unfair tax system a red herring - in fact, I respect the man all the more.

    First, the "evil" and "rich" refer to the general slur often used by propoents of increased taxation on wealth, and was obviously used as sarcasim.

    Second, I did not exhibit distain for Mr. Buffett. My distain is rather for his statement. Odd though it may seem, I can oppose a position one takes while having no feeling pro or con for the person taking that position.
    My apologies. I'm pleased to hear you are only disagreeing with his position on the tax code and not his personal character or integrity.

    Third, this is a simple thread on a web site, not a doctoral dissertation. Keeping things simple is merely polite and wise lest someone misread and/or misinterpret (intentionally or not) what one says.

    Which brings us to the Fourth and final point: I never addressed in any way the concept of flat taxation. In fact, I made no mention to taxation in any way beyond stateing that Mr. Buffett is free to volunatrily increase his personal tax level up to 100% at any time he so chooses.

    What I did do was infer/refer to one of the key principles of Marx Communist Manefesto, "From each according to their ability, to each according to their need." It was not I who brought "need" into the discussion. I only rebutted the notion presented by pointing out that few would actually chose to live with only their "needs" and what "needs" are. Since this meshes so well with Communism, I used the inference, bringing the circle to a close with "evil" and "rich" as noted above.

    Not that it matters in this topic, but I happen to be a strong supporter of the Fair Tax bill (consumption tax), but not a flat tax.
    Well it seemed more than a bit rhetorical which is why I asked you to clarify your position. It's good to hear that a sensible flat tax bill would make sense to you as well.

    Moving right along.... regarding consumption tax - why do you favor it over a flat income tax?
  7. #27  
    Quote Originally Posted by moderateinny View Post
    How do you know he doesn't?
    <snip>

    Well it seemed more than a bit rhetorical which is why I asked you to clarify your position. It's good to hear that a sensible flat tax bill would make sense to you as well.

    Moving right along.... regarding consumption tax - why do you favor it over a flat income tax?
    Yet again you cite me as taking a position I did not. At no time did I state or infer that a "flat tax" makes sense. In fact, I stated precisely the opposite - that I do not support a flat tax.

    Perhaps I am being a tad dense (though I do not believe this to be the case). How could you possibly conclude that I support such a system?

    For the record, Mr. Buffett's investment successes do not qualify him as a tax expert any more than you or I. I would go so far as to posit that he is probably less aware of his personal tax levels than less wealthy citizens due to the fact that he almost certainly does not prepare his own taxes.

    For this reason, I am less inclined to take his statements on tax levels and approaches too seriously, just as I would not take advice on brain surgery from a dentist too seriously; while one might not be totally ignorant in a given area this is no reason to take them as an expert based on minimal knowledge.

    And, yes, this applies to all us posting herein.
  8. #28  
    Quote Originally Posted by mgriffith View Post
    I do not support a flat tax.
    I open to all views on this. Why would you not support a flat tax?
    Last edited by HobbesIsReal; 11/03/2007 at 03:12 PM.
  9. #29  
    Quote Originally Posted by mgriffith View Post
    Your statement does not address my comment to his statement that he thinks he does not pay enough taxes. I simply point out that if he truly believes that he does not pay enough taxes, he can easily remedy that situation by paying any amount up to his total net worth to the US Treasury. Until he starts voluntary payments over and above what the law requires, I will cry BS on his position.
    I think Mr. Buffet's (and Bill Gates' .. he said this on Charlie Rose) point is that people like Buffet pay less % of their income than people like his office workers.

    This is not just about an isolated case, him. He is pointing to an issue with our tax system. His mailing a check to the Treasury will not fix (what he considers) a skewed and unfair system
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  10. #30  
    Quote Originally Posted by moderateinny View Post
    regarding consumption tax - why do you favor it over a flat income tax?
    As a matter of principle and considering the manner in which taxes and duties were originally intended to be carried out at the Federal level, what right does the federal government have to one's personal (non-property) income, thereby reducing one's personal economy before income is even received.
  11. #31  
    Quote Originally Posted by mgriffith View Post
    Yet again you cite me as taking a position I did not. At no time did I state or infer that a "flat tax" makes sense. In fact, I stated precisely the opposite - that I do not support a flat tax.

    Perhaps I am being a tad dense (though I do not believe this to be the case). How could you possibly conclude that I support such a system?
    It was not intentional and I certainly am not accusing you of being dense. Its just that I think most consider a consumption tax to be a type of flat tax and since you said you supported a consumption tax I presumed you meant that variant of a flat tax (in the context Hobbes and I were discussing).

    So then...you support a consumption tax, but not a flat one. I'd like to understand more about the consumption tax plan you have in mind if you care to share it with us.

    For the record, Mr. Buffett's investment successes do not qualify him as a tax expert any more than you or I. I would go so far as to posit that he is probably less aware of his personal tax levels than less wealthy citizens due to the fact that he almost certainly does not prepare his own taxes.

    For this reason, I am less inclined to take his statements on tax levels and approaches too seriously, just as I would not take advice on brain surgery from a dentist too seriously; while one might not be totally ignorant in a given area this is no reason to take them as an expert based on minimal knowledge.

    And, yes, this applies to all us posting herein.
    Here again I think I'll just politely agree to disagree with you about Buffett. I am reasonably sure he knows a lot more about taxes than most on this board. You think his public cries about an unfair tax code are BS - I do not share that opinion.
  12. #32  
    Quote Originally Posted by treosensei View Post
    Isn't this the truth! Mr Buffett pays only 17% of his salary to taxes, while his employees, who are obviously paid significantly less than he, pay at least, if not more than 30% of theirs. ........
    It is true. However, one gets this result because Mr. Buffett conflates two taxes, income tax and FICA, and because he treats only tax withheld from salary. Mr. Buffett's employee pays both FICA and income tax on one hundred percent of her salary while Mr. Buffett pays FICA on only the first part of his salary. However, he pays that 17% on hundreds of millions of dollars of other income. This analysis also ignores the infamous alternative minimum tax (AMT) that Mr. Buffet pays but his employee does not.

    I grant you that it is inequitable but it has more to do with FICA than income tax. As I understand it, a couple with income of $70K pays a lot of tax but no income tax.

    On the other hand, the working man pays 15% tax on his first dollar and never pays any income tax.

    The Democrats want to maximize income tax rates while pretending that the social security tax does not exist. They want high rates even if the impact is to lower total revenues. The Republicans almost get tired of demonstrating that they can increase total revenues while reducing marginal rates.

    (Keep in mind that the saver/investor, who provides the capital for the job, has a choice about where to create that job. He can create it here, where the tax on the first dollar of labor is 15%, or in India where it is 1%. He also always has a choice between using labor, on which there is a high tax, or capital on which he gets a deduction.

    Those people who think that "off-shoring" is a new phenomenon don't get it either. For sixty years IBM and GM plants all over the world have been bidding on the right to produce each new product. The plant with the lowest total cost of production, including transportation, for that product and market got the jobs. What is new is that for chips and software, the cost of transportation disappears.)

    I grant you that there is inequity in the system. I want to see it fixed. However, the fix is not nearly as simple as treosensei, lifes2short, and Charlie Rangel would like you to think.
    Last edited by whmurray; 11/03/2007 at 08:11 AM.
    Up the next election, my citizens; always the next election.
  13. #33  
    Quote Originally Posted by whmurray View Post
    It is true. However, one get this result because Mr. Buffett conflates two taxes, income tax and FICA, and because he treats only tax withheld from salary. Mr. Buffett's employee pays both FICA and income tax on one hundred percent of her salary while Mr. Buffett pays FICA on only the first part of his salary. However, he pays that 17% on hundreds of millions of dollars of other income. This analysis also ignores the infamous alternative minimum tax (AMT) that Mr. Buffet pays but his employee does not.
    Actually, I think it has more to do with the fact that the bulk of his income comes from capital gains and dividends, which are taxed at 15%.
  14. #34  
    Quote Originally Posted by whmurray View Post
    The Democrats want to maximize income tax rates while pretending that the social security tax does not exist. They want high rates even if the impact is to lower total revenues.
    Their latest proposal (by Charlie Rangel) is revenue neutral, gets rid of AMT, lowers taxes on people making $200K or less, raises taxes on those making more.
    http://firstread.msnbc.msn.com/archi...25/430574.aspx

    Quote Originally Posted by whmurray View Post
    The Republicans almost get tired of demonstrating that they can increase total revenues while reducing marginal rates.
    Just like others get tired of debunking this myth. (Summary of findings from non-partisan CBO: at the current rates of taxes, lowering taxes raises revenues, but not total revenues).
    http://www.cbpp.org/9-27-06tax.htm
    Last edited by aprasad; 11/03/2007 at 07:36 AM.
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  15. #35  
    Quote Originally Posted by samkim View Post
    Actually, I think it has more to do with the fact that the bulk of his income comes from capital gains and dividends, which are taxed at 15%.
    My understanding is that he is talking about comparable, i.e., salary, income. Mr Buffet's marginal rate on investment income is the AMT rate. You and I may benefit from 15% on capital gains but Mr. Buffet does not.

    (Actually, most of my dividends, interest, and capital gains are in my retirement fund. Taxes on those are deferred until I withdraw them, but then I pay ordinary income rates. Because I had one-time income last year, on top of the ordinary income tax on those withdrawals, I also paid AMT.)

    (Keep in mind that most of Mr. Buffet's fortune is unrealized. As my sister likes to remind me, "Until you have sold, and paid the taxes, it is all paper.") He does not sell his Berkshire Hathaway stock. That is what he is giving to Bill and Melinda to give away. If he is like me, he pays AMT rates on the dividends on that stock.)

    These illustrations are complicated, almost as complicated as the law on which they are based. One should not base one's decisions about tax policy on sound bites.
    Up the next election, my citizens; always the next election.
  16. #36  
    When he compares his taxes to those of his employees, he is making a statement about equity, not about whether or not he pays "enough tax." Mr Buffet gives away, mostly to the Bill and Melinda Gates Foundation, not only most of his income but most of his capital.

    Some here have suggested that instead of doing this, he should just give his fortune to the US Treasury (like Ted Turner, he could give it to the UN). His decision to give it to the Gates, rather than the Treasury, is a choice about who is to make the decisions. Since Mr. Buffet intends to give it away in any case, he is saying that he thinks the Gates will do a better job of spending it than will the government.

    The implications here that Mr. Buffet is somehow "evil" because he does not give his fortune to the government, is a statement about one's own choice about who should decide who will benefit from his generosity. I am with Mr. Buffet.

    Like Mr. Buffet, I too intend to die broke. In the meantime, I prefer to decide for myself rather than have the government do it to me. I do not mind paying taxes for roads and defense but I do not want to pay them so that the politicians can give my money to their constituents rather have me give it to my grandchildren.
    Up the next election, my citizens; always the next election.
  17. #37  
    Taxes on long term capital gains is 15% under both regular taxes and under AMT.

    Read the last paragraph in this article:
    http://www.businessweek.com/magazine...0/c3984067.htm

    The article explains how capital gains can affect "lesser-rich" by reducing their AMT exemption.. but ultra-rich are way beyond these effects of AMT exemption.

    "To add insult to injury, the rich don't have these problems. The impact of the AMT shrinks in the very top brackets, so by the time investors make $1 million, they are paying an effective rate of about 16% on their gains."
    Last edited by aprasad; 11/03/2007 at 09:26 AM.
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  18. #38  
    Aprasad is correct. The reason the effective marginal tax rate on capital gains can be over 20% for many people affected by AMT is that their AMT exemption may be reduced by 1/4 of the gains. Once the AMT exemption hits zero, the effective marginal rate for long-term capital gains is back to the actual rate of 15%.
  19. #39  
    Quote Originally Posted by whmurray View Post
    When he compares his taxes to those of his employees, he is making a statement about equity, not about whether or not he pays "enough tax." Mr Buffet gives away, mostly to the Bill and Melinda Gates Foundation, not only most of his income but most of his capital.

    Some here have suggested that instead of doing this, he should just give his fortune to the US Treasury (like Ted Turner, he could give it to the UN). His decision to give it to the Gates, rather than the Treasury, is a choice about who is to make the decisions. Since Mr. Buffet intends to give it away in any case, he is saying that he thinks the Gates will do a better job of spending it than will the government.

    The implications here that Mr. Buffet is somehow "evil" because he does not give his fortune to the government, is a statement about one's own choice about who should decide who will benefit from his generosity. I am with Mr. Buffet.

    Like Mr. Buffet, I too intend to die broke. In the meantime, I prefer to decide for myself rather than have the government do it to me. I do not mind paying taxes for roads and defense but I do not want to pay them so that the politicians can give my money to their constituents rather have me give it to my grandchildren.
    Here here! Nicely said.
  20. #40  
    Quote Originally Posted by whmurray View Post
    Some here have suggested that instead of doing this, he should just give his fortune to the US Treasury (like Ted Turner, he could give it to the UN). His decision to give it to the Gates, rather than the Treasury, is a choice about who is to make the decisions. Since Mr. Buffet intends to give it away in any case, he is saying that he thinks the Gates will do a better job of spending it than will the government.
    Though I'm not one of those to make the suggestion, somehow, I knew someone would make this claim. However, it assumes much more than can be legitimately qualified. It is a choice, I agree. However unless Mr. Buffet has made such a statement, the assumption is out on a limb by itself. Mr. Buffet is able to strike a deal with the Gates Foundation as to what his funds will be allocated for, whereas Mr. Buffet is unable to have any say in how the Treasury utilizes his donation. In fact, I would reserve judgment that an extra bonus check written by Mr. Buffet to the Treasury would be subject to the same treatment as income tax revenues. That's a particular area I'd like to see further discussed.
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