Warren Buffet calls for higher taxes on the rich

[Bobblehead]

Originally Posted by Azure

I only said that he added $3 billion to his net worth and he never paid taxes on a dime of that money.

His net worth or change in it is absolutely irrelevant to any tax issues.

If you buy 100 stocks from $1million dollars each, then the stock price goes up to $1.50 then TA DA, your net worth has gone up $50 million dollars.

Should you pay tax on that? Because that is exactly what you seem to be proposing. Why should he pay a dime of tax on that money?

Now he sells that stock. His net worth doesn't change an iota when he sells, but he has now realized a capital gain and will need to pay tax on it.

You have a Papa Smurf trading card. One of only 2 in the world. You paid $1 million dollars. Then one day someone sells the other card for $2 million dollars. Look, your net worth just went up a million dollars! Should you pay tax on that? Your net worth went up $1 million, you better not have a loophole. Well, if you can't find a buyer for your card and end up selling it for $100K then you just realized a capital loss of $900K. It would have sucked if you had to pay tax on that mythical net worth.

Net worth and capital gains are not synonyms and your arguments are really poor.

[Azure]

Originally Posted by MarchHare

No, it's not hypocritical at all. Warren Buffett the CEO of Berkshire Hathaway has a responsibility to the investors in his company to deliver the maximum possible shareholder value. He would be failing his fiduciary duty if he were to publicly speak in favour of changes to the tax code that would negatively affect the value of his shareholders' stocks.

On the other hand, Warren Buffett the private individual can talk all he wants about increasing personal income taxes, including taxes on dividends and capital gains. It's particularly noble of him because he is -- quite literally -- volunteering to put his money where his mouth is.

I realize that. All I'm saying is that he's presenting a solution that won't fix the problem. Should the rich pay their fair rate? Absolutely. Will it fix the problem? Absolutely not.

Did Buffet come out and say that there are loopholes in place that need to be closed in order to increase revenues? No he didn't. So when he talks about paying 'fair rate'....and 'coddling the rich'.....he's being misleading at the very least because the coddling of the 'corporation' is the reason the US can't generate the revenues to combat their spending problem. Not because his tax rate is lower than his secretary's tax rate.

And the hell of it is, I agree that the rich should their fair rate just like everyone else. I'm just not naive enough to think that it'll fix the problem.

[Calgaryborn]

I think Warren Buffett is a billionare playing with hundreds of others in a million dollar poker game. He is just asking to raise the anti because he knows that will eliminate some of the less heeled competition.

[Azure]

Originally Posted by MarchHare

Right here:
Did you even read his op-ed piece? It's right in there.

You obviously didn't read my post. He is claiming that capital gains tax rates were elevated in the 80s and 90s, and the numbers actually indicate that the actual rate was cut to 20% in 1981, raised again in 1986, and cut again in 97.

He also talks about still investing despite the supposed higher tax rate and that it doesn't make a difference, but again, the numbers indicate otherwise. Revenues from capital gains tax rates grew 24% after the 8% reduction in 1981, and they grew again 74% after the reduction in 1997. That goes against what Buffet is saying.

Not that he personally didn't invest despite the so-called higher rate that was apparently secretly cut even though he doesn't want to mention it, but the market as a whole invested a lot MORE after the rate was cut in '81 and again in '97.

[burn_this_city]

Originally Posted by Calgaryborn

I think Warren Buffett is a billionare playing with hundreds of others in a million dollar poker game. He is just asking to raise the anti because he knows that will eliminate some of the less heeled competition.

Or maybe its not one upping the competition, and he's genuinely concerned about the finances of the country that enabled him to become ridiculously wealthy.

[MarchHare]

All I'm saying is that he's presenting a solution that won't fix the problem. Should the rich pay their fair rate? Absolutely. Will it fix the problem? Absolutely not.

[...]

And the hell of it is, I agree that the rich should their fair rate just like everyone else. I'm just not naive enough to think that it'll fix the problem.

I don't think Buffett thinks this alone will solve the deficit issue either (at least I didn't read his piece that way). Obviously there needs to be a combination of reforms to the tax code (both personal and corporate) and reductions in government spending. Buffett's op-ed is nothing more than a rebuke of the Tea Party branch of congress who absolutely refuse to consider any tax increases whatsoever. He's saying that increasing the amount of taxes the richest Americans pay is part of the solution (and one he's willing to accept), not the be-all-end-all answer.

[MarchHare]

You obviously didn't read my post. He is claiming that capital gains tax rates were elevated in the 80s and 90s, and the numbers actually indicate that the actual rate was cut to 20% in 1981, raised again in 1986, and cut again in 97.

I think you misunderstood what he was saying. His use of the verb "elevated" wasn't to state that capital gains taxes were increased at the time, but that they were higher then than they presently are (i.e. elevated in comparison to today's rates). I'm pretty sure Warren Buffett has a very acute understanding (certainly better than either of us) of historical changes to the capital gains tax rate.

[Cowboy89]

Originally Posted by Calgaryborn

I think Warren Buffett is a billionare playing with hundreds of others in a million dollar poker game. He is just asking to raise the anti because he knows that will eliminate some of the less heeled competition.

This is sooo off base that you should probably stop talking in this thread to avoid further embarassment. I am self described right-winger and I constantly face-palm everytime you try to argue for certain conclusions that we mutually share. If you disagree with Buffet on this then stick to a policy vs. policy arguement rather than make baseless claims of hypothetical hidden motives.

If you think that Buffet's goal with these comments is to become personally richer at the expense of others (Which I think is preposterous because at this point in his life he is likely to be long dead by the time the real effects of a change in policy are felt), then you don't understand how he makes his money.

[Mccree]

Originally Posted by Bobblehead

Now he sells that stock. His net worth doesn't change an iota when he sells, but he has now realized a capital gain and will need to pay tax on it.

.

Not that it matters much but his net worth does change and in fact is lower by the tax he pays.

[Calgaryborn]

Originally Posted by Slava

I'm not bothering with most of this thread, but I just find it shocking that a guy who can afford it says he should be paying more in taxes (along with people of similar status) and there are people who won't accept that at face value. Its really bizarre...

I suspect that even the Tea partiers would consider a tax increase on this select group. Even if they shouldn't have to pay more they can afford it.

The thing is that there isn't going to be a tax increases to this select group alone. It wouldn't produce enough income to help the government. When this come to Congress it will be Obama's old plan of taxing everyone who earns over 200 thousand dollars. This will hurt too many small businesses. They are already struggling.

When the economy shrinks the government needs to follow. It's as simple as that.

[Bobblehead]

Originally Posted by Mccree

Not that it matters much but his net worth does change and in fact is lower by the tax he pays.

Probably.

But then how would azure's methodology work - he has a net worth, but then he pays taxes, so that lowers his net worth, so he actually paid too much tax.....


Taxes - do you want them simple or do you want them fair? Pick one.

[Azure]

Originally Posted by Bobblehead

His net worth or change in it is absolutely irrelevant to any tax issues.

If you buy 100 stocks from $1million dollars each, then the stock price goes up to $1.50 then TA DA, your net worth has gone up $50 million dollars.

Should you pay tax on that? Because that is exactly what you seem to be proposing. Why should he pay a dime of tax on that money?

Now he sells that stock. His net worth doesn't change an iota when he sells, but he has now realized a capital gain and will need to pay tax on it.

You have a Papa Smurf trading card. One of only 2 in the world. You paid $1 million dollars. Then one day someone sells the other card for $2 million dollars. Look, your net worth just went up a million dollars! Should you pay tax on that? Your net worth went up $1 million, you better not have a loophole. Well, if you can't find a buyer for your card and end up selling it for $100K then you just realized a capital loss of $900K. It would have sucked if you had to pay tax on that mythical net worth.

Net worth and capital gains are not synonyms and your arguments are really poor.

Again, I never said that he should be taxed on his net worth. My point is that he can add $3 billion to his net worth year by year, but not get taxed on it because the US doesn't tax stocks until a dividend is paid, or until some stock is sold. Which is fine, but he doesn't mention it. He's talking about increasing the estate tax, which he avoids paying because of his amazing donation to the Gates Foundation. He also wants to increase the income tax rate, which won't help much because he doesn't exactly make a lot of 'income.' His net worth increases through stocks, which aren't exactly taxed. Should they be? I think you quite clearly pointed out why they shouldn't be.

So is he being forthright and honest about being taxed 'fairly?' Not sure how much his taxes would increase with a higher rate considering he makes less than a million dollars 'income' from BH.

Should he pay the 30% that his secretary pays? Absolutely. Everyone should pay fair rates. But for the tenth time, it won't solve anything.

[Azure]

Originally Posted by MarchHare

I don't think Buffett thinks this alone will solve the deficit issue either (at least I didn't read his piece that way). Obviously there needs to be a combination of reforms to the tax code (both personal and corporate) and reductions in government spending. Buffett's op-ed is nothing more than a rebuke of the Tea Party branch of congress who absolutely refuse to consider any tax increases whatsoever. He's saying that increasing the amount of taxes the richest Americans pay is part of the solution (and one he's willing to accept), not the be-all-end-all answer.

I agreed with that part of his argument. I'm just saying he's not being open about how he gets away with paying lesser rates.

[firebug]

Originally Posted by Azure

Again, I never said that he should be taxed on his net worth. My point is that he can add $3 billion to his net worth year by year, but not get taxed on it because the US doesn't tax stocks until a dividend is paid, or until some stock is sold. Which is fine, but he doesn't mention it.

What is he supposed to say? "My net worth increased last year just like many of yours and I paid no taxes on this just like you didn't because in the United States we have never had to pay taxes on unrealized gains"

Originally Posted by Azure

He's talking about increasing the estate tax, which he avoids paying because of his amazing donation to the Gates Foundation.

Buffet is avoiding having an estate, not avoiding estate taxes. I think he would be happiest if nobody paid estate taxes ;-). He believes the transfer of excessive wealth between generations of a family is unethical. He wants his kids to have enough money that they can 'do what they want (for work), but not enough to do nothing'.

He is a fascinating man. And far more compassionate and generous than any of god-bothers that like to preach to the rest of us.

Originally Posted by Azure

He also wants to increase the income tax rate, which won't help much because he doesn't exactly make a lot of 'income.' His net worth increases through stocks, which aren't exactly taxed. Should they be? I think you quite clearly pointed out why they shouldn't be.

So is he being forthright and honest about being taxed 'fairly?' Not sure how much his taxes would increase with a higher rate considering he makes less than a million dollars 'income' from BH.

Should he pay the 30% that his secretary pays? Absolutely. Everyone should pay fair rates. But for the tenth time, it won't solve anything.

Fair taxes wont solve anything?

[Mccree]

Originally Posted by Bobblehead

Probably.

But then how would azure's methodology work - he has a net worth, but then he pays taxes, so that lowers his net worth, so he actually paid too much tax.....


Taxes - do you want them simple or do you want them fair? Pick one.

I don't want to put words in his mouth but I THINK he is saying it is easier to increase your NET WORTH if you pay very little taxes. Buffet was able to obtain a higher net worth by using the lower tax rate and "loopholes"

I prefer the Canadian Tax System over the US system. I think it has the best of both worlds. Not perfect but better than the US.

[BlackEleven]

Originally Posted by Calgaryborn

I think Warren Buffett is a billionare playing with hundreds of others in a million dollar poker game. He is just asking to raise the anti because he knows that will eliminate some of the less heeled competition.

I think you may be confusing Warren Buffett with this fellow.

[Tinordi]

Originally Posted by Calgaryborn

I think Warren Buffett is a billionare playing with hundreds of others in a million dollar poker game. He is just asking to raise the anti because he knows that will eliminate some of the less heeled competition.

Man...

Do you even listen to yourself?

Warren Buffet's fellow investment bankers and hedgefund managers are on such a margin that an increased tax rate would wipe them out?

Plain, old fashioned, stupidity.

[MarchHare]

Slightly off-topic, but since it's been mentioned, Buffett is in favour of estate taxes. This article is from 2007, and it sounds like he feels not taxing estates stifles innovation and progress (i.e. without an estate tax, children of the super-rich don't need to achieve anything for themselves since they can just live their entire lives on old money).

http://www.reuters.com/article/2007/...42383020071114

"Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline," Buffett said. "A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."

Buffett, the chief executive of Berkshire Hathaway (BRKa.N) questioned any effort to further cut taxes for the wealthy.

"Further shifting of this burden away from the super-rich is not the way to go," he said.

"In a country that prides itself on equality of opportunity, it's becoming anything but that as the gap between the super-rich and the middle class is widening."

[MarchHare]

Originally Posted by Mccree

I don't want to put words in his mouth but I THINK he is saying it is easier to increase your NET WORTH if you pay very little taxes. Buffet was able to obtain a higher net worth by using the lower tax rate and "loopholes"

Actually, according to Buffett himself (whether you believe him is another issue, I suppose), he doesn't employ a personal accountant and doesn't take advantage of tax shelters available to him.

[afc wimbledon]

Originally Posted by Calgaryborn

I suspect that even the Tea partiers would consider a tax increase on this select group. Even if they shouldn't have to pay more they can afford it.

The thing is that there isn't going to be a tax increases to this select group alone. It wouldn't produce enough income to help the government. When this come to Congress it will be Obama's old plan of taxing everyone who earns over 200 thousand dollars. This will hurt too many small businesses. They are already struggling.

When the economy shrinks the government needs to follow. It's as simple as that.

Two points, when goverments contract in a contracting economy it has the effect of amplifieing the contraction, thus taking a recession into a depression.
The problem is not what goverments do during a recession, it is what they due during a boom, goverments, under a Keynsian system need to contract during periods of growth and then expand during recessions to slow the contracting effect.

Second point, I believe individuals and business are taxed seperatly therefore in increase on income tax should have no effect what so ever on business, it is also very simple to ensure this, that the tea party morons and their very smrt very rich shepherds don't call for this is a clear sign they don't care or believe tax increases for the over 250,000 will affect small businesses at all.