Tag: Berkshire Hathaway

Warren, Tax Dodge

A common tenet of finance is that rich people are rich because they don’t spend money frivolously. What I learned from this book was that amassing great gobs of cash involves not just industry, a great deal of thrift is involved, such as applying a strangle hold on that fortune. One way of bulking up your fortunes is to never share it with the government, something Warren Buffett has down to a science:

This one’s truly, uh … rich: Billionaire Warren Buffett says folks like him should have to pay more taxes — but it turns out his firm, Berkshire Hathaway, hasn’t paid what it’s already owed for years.

That’s right: As Americans for Limited Government President Bill Wilson notes, the company openly admits that it owes back taxes since as long ago as 2002.

“We anticipate that we will resolve all adjustments proposed by the US Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years … within the next 12 months,” the firm’s annual report says.

It also cites outstanding tax issues for 2005 through 2009.

Obvious question: If Buffett really thinks he and his “mega-rich friends” should pay higher taxes, why doesn’t his firm fork over what it already owes under current rates?

Good question, is this another example of those sanctimonious progressives wagging their finger at us with a ,”Do as I say, not as I do”? Much like Al Gore calling every AGW skeptic a racist all the while producing his own carbon footprint the size of Montana, Warren runs fast and loose with his tax policy advice to the president, how about the IRS goes after these rich hypocrite tax dodges, that’s got to be good for a few billions.

Tapping the rich/propagating class warfare is such a tired old meme, you would hope that Obama would come up with something new for 2012, but it has paid dividends before, and with even more people less wealthy then when he started his pilgrimage of wealth distribution, it will still play.

Fact is, unlike most other folks, Warren Buffett gets most of his income from dividends and capital gains, which are nominally taxed at 15 percent.

Yep, we have already discussed that here. The only people that can afford to live on dividends and cap gains are those wealthy enough to have amassed stock holdings capable of throwing off large sums of cash, hardly the same thing as earning a salary with a real job.

There’s more. Obama, and co-conspirators like Buffett, claim to want to slap only “millionaires and billionaires.”

But in 2009, for instance, fewer than a quarter-million taxpayers (less than two tenths of 1 percent) reported income over $1 million — and their combined bill was less than $200 billion.

Raise the top tax rate on them by 13 percent, as Obama wants (from 35 percent to 39.6 percent) and you bring in only another $26 billion, tops — and that’s if your tax hike doesn’t stifle the economy and kill jobs (which it surely would). Yet what’s $26 billion in a world of $4 trillion federal budgets with trillion-dollar-plus deficits?

That’s why that whole ,”Make rich people pay their fair share”, is such bullshit, you can’t get there from here, it won’t be nearly enough and is piddling for any real deficit reduction.

But don’t think America is the only place with big mouth well-heeled leaders of industry bent on offering themselves up on the alter of fairness:

The move follows an open letter by 16 executives and wealthy French, including Europe’s richest woman, L’Oreal heiress Liliane Bettencourt, who offered to pay a “special contribution” in a spirit of “solidarity” because they had benefited from the French system.

So, pay up madem, by all means, if you feel so called, write that check, oh, you want other rich people to follow suit? How presumptuous.