Tag: Warren Buffett

What a Co-inky-dink!

I was terribly surprised to find out that one of the world’s richest guys whom offered lip service to Obama’s “tax the rich” class warfare nonsense back when his insurance companies stood to make huge financial gains if the Feds jacked up taxes, and especially estate taxes, on the rich, ended up having another one of his companies making out like a damn bandit after the WH killed the Keystone XL pipeline. One of Warren Buffets companies, Burlington Northern, a railroad company in true Monopoly – the game for you illiterates – fashion, which makes oodles of money hailing oil from Canada stands tomake even more money after Obama’s cancelation of the XL pipeline.

Bleh, nothing to see here. It’s not like this WH has a history of such crony capitalism writ large. I mean the billions we sank into so many dubious green companies & technologies, only to see massive failures and no serious positive return of any value to speak of, for example, was actually just another series of “accidental misinvestements”. Yeah, sure. The US administration that has done the most during its tenure to abrogate itself the ability to use the law as a cudgel and allow it to pick which companies and ideas are winners and losers, and which despite all the facts to the contrary has decided they will spurn fossil fuels in favor of unicorn farts – green technology – even if it causes massive pain to the average American they so pretend to care about, just happens to make another decision that hurts the average citizen, but benefits the very people they pretend to so hate for being wealthy.

I see why Buffet loves this guy and feels it is a great idea to back his class warfare shenanigans. There is some huge money to be made here, and all it takes is the kissing of these champions of the little people’s asses. Of course, I remind you all that the only evil entities are these rich oil companies. And then only the “rich oil companies” that don’t end up being the largest contributors to the political campaigns of democrats like BP was for Obama. There is a pattern here, isn’t there? I am sure all the three letter DNC propaganda outlets will be stumbling over each other to report this tidbit or anything like it too. In the mean time, the leftists will tell us that when a rich guy like Buffet tells us we should be happy to get taxed harder, by collectivists that will then piss that money away buying votes with all kinds of stupid schemes, that we should take his advice. That he is actually making even more money because of these schemes, and is also likely to get himself an exclusion from these class warriors for a nice donation to their campaign funds, should not dissuade us people trying to keep government from fleecing us from bending over and liking what follows.

Feeding Him Slow Pitches

In another installment of ,”Aren’t you glad you don’t live here?”, I present the president’s latest trip to the Bay Area. Into the belly of the beast, where the criticism is the loudest because the locals are hurting and just itching to blame someone for their problems, let’s hope he brought his “A” game with him to placate the angry mob. Oh wait, this is California, he gets more reach arounds here then at the CBC:

Wow, that screwfest was absolutely XXX rated, I need a cigarette after that.

The WH really must issue bullet points to all the talking heads because he sounds strikingly just like Elizabeth Warren, if Mass. does not work out for her she can certainly pull a Hillary and carpetbag right here in the Golden State, she would be more popular then boob jobs.

All of the beams that hold this socialist house erect has already pretty much been annihilated, all that stuff about no one making it on their own, how the intricate village is designed so that all the villagers (when they are not tending to the village idiots) are all cogs in the wheel, working together to move the collective forward, the wants and needs of the many. So any individual achievement is only possible because the village provided the tools necessary for that achievement.

This guy who wants his taxes raised happens to be another Warren Buffett, one of those incredibly rich folks who do not work, do not earn a salary, and do not pay income taxes, yet he thinks he can speak for all those in the work force that do pay taxes on that income, what a chowderhead.

I was watching Obama listen in earnest to the question with a nodding head like ,”OK, is this guy smart enough to read the question off of the card we gave him without gaffing it like I’m prone to do?”.

It should be noted that he and the crowd are of one mind, that the effusiveness permeating the room was felt by the whole audience and that they are reflective of a good many folks here in California where the consensus opinion is that the vision was not realized only because the opposition is “too blind to see”, that if folks would just get out of his way and allow the man, the smartest man to ever be in the WH btw, to wield his magic then we would not be in this fix and all would be right with the world. And raising taxes on people like him would be an important first step.

I understand that the class warfare“tax debate” is all Obama has left, really. He is not going to start a “cut spending debate”, or a “lets eliminate all the BS regulations so businesses can grow and hire more people debate”, or even a “maybe it’s not a good idea to raise taxes in the middle of a recession like I said several times in the past debate”.

But there are enough like minded folks around that want the rich squeezed more, so he gets more chances to preach to the choir.

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.

Attack of the Buffett

Warren Buffett has an op-ed calling for higher taxes on the rich that has been sent to me by just about every liberal I know, every liberal I’ve ever heard of and, I understand, was found in alien radio transmissions detected by the revived SETI network.

I’m hesitant to disagree with a titan of finance like Buffett. And, in fact, if you push aside the class warfare gibberish and straw manning of the opposition, I think he makes some valid points:

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

What he’s dancing around is that we tax people a *lot* less for flipping money around than working. If you’re a doctor making six figures saving people’s lives, you’re taxed at a marginal rate of 33%, plus state taxes and payroll taxes. But if you make money on credit default swaps, stock market gambling and housing flips, you’re taxed between 15-20% with no payroll tax. We conservatives always say that incentives matter. You don’t have to be a rocket scientist to see why so many of our best and brightest have moved from making and building and doing things to playing with money and wrecking the economy.

Buffet also debunks a talking point I’ve grown tired of. The argument that the rich are taxed too much is based on what percentage of income tax they pay versus what percent of income they take. However, this fails to account for all taxes, specifically capital gains taxes.

However, Buffett isn’t completely in Earth orbit. He complains about the payroll tax not applying to the rich. But first off, the Medicare tax does apply to the rich, at least for income. And second, the Social Security tax is capped because benefits are capped. You can remove that cap if you want (and give us a gigantic marginal rate) but you then have to stop pretending Social Security is anything but a welfare system.

But the biggest problem with Buffett’s article is his laser-like focus on the “mega-rich”. He ignores that, for Democrats, “the rich” start at $250,000 and most of the “rich” are closer to $250,000 than they are to $10 million. Of course the mega-rich will be fine no matter what the tax system does. They’ll buy enough Congressmen to create loopholes and exemptions for them (Buffett himself is heavily invested in “green” technologies which are getting tax benefits). It is the “not-so-mega-rich” who are most sensitive to tax policy.

To wit: Buffett does not mention the AMT at all, which is a huge regulatory and financial burden on the not-so-rich. He says nothing about the small business that drive the economy, many of which pay taxes as individuals and many of which are about to get hammered by PPACA taxes. He conspicuously fails to mention Sarbanes-Oxley, which may a bigger burden on our system than taxes. And he fails to note that the higher marginal rates of the past were leavened with huge tax shelters which benefited … the mega-rich like Warren Buffett. He also doesn’t talk about the inheritance tax, which can hit small business very hard. Ted Frank has claimed that one of the ways Berkshire-Hathaway makes money is by buying business that have to sell because of the inheritance tax.

In short, this crosses me as a very rich person arguing for a tax system that will hit him, but hit the competition harder. Haven’t we danced that dance enough times?

The more we debate tax policy, the more something along the lines of Simpson-Bowles looks like a smart idea. Eliminate as many loopholes, deductions and exemptions as possible; eliminate the distinction between capital gains, stock income and earned income; lower the marginal rates into the 20’s. This would bring more revenue to the Feds while minimizing the tax burden on investors and business owners. And it would especially do it without knee-capping those who compete with Warren Buffett.