its not unfairly attacking the messenger if you point out that he does the exact opposite of what he advocates for. The IRS says his company owes them billions of dollars in taxes. this billion advocating for higher taxes pays the equivalent of 900 dollars a year in tax. Plus the IRS says his company owes them billions... and a large part of his companies strategy is to acquire companies and deprive the govt of tax revenue. this guys is the opposite of everything he pretends to stand for. I have no problem with him trying to beat the IRS. I have a problem with him befriending the big taxers and being their spokes model. He want to tax his competition away. http://www.barrons.com/articles/warren-buffetts-nifty-tax-loophole-1428726092 Warren Buffett is fond of saying his tax rate is lower than his secretary’s. He does not publicize his tax returns, but for the tax year 2010, he paid $6.9 million on taxable income of $39.8 million, according to partial disclosures he made in 2011. What is astounding about those numbers is not the 17.3% tax rate, but that Buffett’s $39.8 million of taxable income is only about 0.05% of his reported net worth ($71 billion according to Forbes, which put him third on its list of the 400 wealthiest people in the world for 2015). Proportionately, that’s like someone with an ever-expanding net worth, currently $10 million, reporting taxable income of only $5,000 and paying a federal tax bill of only $900. So, how does he do it? Buffett’s principal holding is an economic interest of about 20% of Berkshire Hathaway, the huge conglomerate he has been building since the 1960s. It has a market value of about $350 billion. Berkshire hasn’t paid any cash dividends since 1967. Rather, the company accumulates its prodigious after-tax income ($19.9 billion in 2014) and cash flow ($32 billion in 2014) to get bigger by buying companies, lots of companies. Among its large recent acquisitions were Lubrizol, Burlington Northern Santa Fe, and a shared acquisition of H.J. Heinz. The Berkshire Model is to buy companies rich in cash flow with histories of paying dividends, then cancel those dividends and retain the cash flow going forward for future acquisitions. HOW MUCH TAX is Warren Buffett able to avoid by fixing Berkshire’s dividend at zero? The dividend yield of the Standard & Poor’s 500 is about 2%. The price/earnings ratio of the S&P 500 is about 18. Thus, for the S&P 500, approximately 30% of earnings are paid out to shareholders. These dividends are taxable at a current maximum rate of 23.8%. If Berkshire followed the average of the S&P 500, it would have paid out about $6 billion in dividends in 2014, and Buffett’s share would have been about $1.2 billion. At a 23.8% tax rate, that would have given Buffett a tax bill of $280 million, or about 40 times the taxes he said he actually paid in 2010. Thus the Treasury has been getting exiguous tax revenue from one of its wealthiest citizens. Buffett is virtually immune to higher individual income-tax rates, while he promotes higher rates for other rich people, who may have a net worth a hundredth of 1% (0.01%) of his own. Since, according to his publicly stated plans, Buffett intends to leave the bulk of his estate to charity, his estate won’t be paying much tax, either. The Buffett Loophole and the Berkshire Model are allowing one individual to build one of the great American fortunes while avoiding individual taxes. Talk about someone not paying his share! FOR 2014, BERKSHIRE ITSELF recorded a provision for $7.9 billion in taxes, most of which was “deferred.” In fact Berkshire, like many other companies, is able to defer much of its taxes, in its case $61 billion. This is money it acknowledges it owes the government but has yet to pay. Deferred tax liabilities are the difference between taxes that will come due in the future and what the company owes today. Accounting rules require this difference to be recognized as a liability, but it ultimately acts as a sort of “float” that the government allows companies in the midst of an acquisition—which Berkshire almost always is. In 2012, the year before it was acquired for $28 billion by Berkshire (and a Brazilian partner), H.J. Heinz paid more than $600 million in dividends. Those dividends were taxed and provided revenue to the U.S. Treasury. After the acquisition, the dividends stopped. Tax revenue from those dividends stopped. In 2010, the year before it was acquired by Berkshire for $9 billion, Lubrizol paid $90 million in dividends. After the acquisition, the dividends stopped, as did tax revenue on the dividends. In 2009, the year before it was acquired by Berkshire for $44 billion, Burlington Northern Santa Fe paid $546 million in dividends. After the acquisition, the dividends stopped, as did tax revenue on the dividends. LAST YEAR, Berkshire entered into what became known as a “cash-rich split-off” that, according to the New York Times, might have allowed it to avoid $1 billion in taxes. Berkshire traded its stock in Procter & Gamble, which carried a low cost basis of $336 million, for P&G’s Duracell unit plus $1.7 billion in cash, a total value of $4.7 billion. The point was to reduce capital-gains taxes that would have been due on a sale of Berkshire’s P&G stock. It seems that Buffett and his businesses are serial deprivers of tax revenue to the U.S. Treasury. Yet that does not deter him from loudly advocating higher income tax rates for others. However unethical the Buffett Loophole and the Berkshire Model may seem, however much they may appear to be gaming the tax code, no one has claimed they are illegal. Now consider Section 531 of the Internal Revenue Code, which imposes a 20% tax on the accumulated but undistributed income of a corporation. And Section 532 of the Code states that the tax shall apply to “every corporation…availed of for the purpose of avoiding of the income tax with respect to its shareholders…by permitting earnings and profits to accumulate instead of being divided or distributed.” The Buffett Loophole and the Berkshire Model provide clear examples of the purpose of Sections 531 and 532. Buffett and Berkshire are accomplishing precisely what the code is trying to prevent: shareholders getting away without paying taxes. Enforcement of these two sections has been sporadic, subject to the judgment of the Internal Revenue Service. An official commentary on the code, Federal Tax Coordinator 2d, D-3003, states that, for enforcement of the accumulated-earnings tax, “Congress did not want the taxing authorities second-guessing the responsible managers of corporations as to whether and to what extent profits should be distributed or retained, unless the taxing authorities were in a position to prove their position was correct.” CAN THE IRS CONTEND that Berkshire’s purchase of Duracell was not essential for its Heinz holding, for its Burlington Northern Santa Fe railroad, or for its core insurance businesses? Of course. Can the IRS see that by looking the other way it has unreasonably feathered Buffett’s nest, allowing him to avoid paying reasonable taxes? Of course it can. It chooses not to see anything. The relationship between the Wizard of Wall Street and our president is symbiotic. The two scratch each other’s back at the expense of the commonweal. How nice for our president, who is so eager to spread the wealth around, to have one of our richest citizens militating for higher taxes on the rich. How nice for Buffett to play to an adoring crowd of wealth-spreaders. How strange that it’s not his wealth that they are spreading around.
I agree that is the human condition. But you still have not offered one view other than attacking the messenger, not the message. Here, let me post a right wing libertarian argument. I don't agree with a word of it, but it at least it can be logically debated:
Agreed. However, the system doesn't allow for me to donate money for programs I believe in. It simply loads up and bloats the country with programs of all makes and sizes and then demands payment from those who have worked hard for what they have obtained. That's not functional government. That's a mugging. Who wants to get rid of all of those things? Find me one major political party that wants to do away with half of those things on your list. Do me a favor. Type your font in all the same size. Your posts read like a kidnapping letter with all the cut out letters. I don't mind the bold, but mixed with spelling errors, it's difficult to read your posts. If you want me commenting on them, you'll humor me. Republicans calling for tax cuts and then cutting programs you had no input to cut is the exact same as Democrats calling for tax hikes to pay for programs you had no input in creating/funding.
You don't get it. I'm not going to spend my time listening to Buffet's arguments in some video you post if I don't consider the man worthy of my time. So the only chance of me listening to "his" arguments is if you present them as yours in this discussion. Without video clips.
*sigh* You're missing the point. But fine. Which video are you talking about? You posted several in this thread alone.
Tao, what I was indirectly implying with my post stating how happy I would be to pay the top rate on most of my income, is how implicitly fair a bracketed, progressive income tax structure can be. Everyone pays exactly the same rate on the 10th dollar and the Millionth dollar of AGI. Of course the rates are different for the tenth and millionth dollar, but they are the same rates for everyone. It is just that most earners have no millionth dollar of AGI. We would all like to! Even with a flat tax those with High AGI will pay more toward maintaining government than those with Low AGI, so both a progressive tax structure and a flat or flatter (fewer brackets, lower top rate) are similar in that respect. And both are fair, at least in the sense, that everyone pays the same rate on the tenth dollar and millioneth dollar of AGI. The problem with too flat a tax structure, i.e., one with too few brackets and/or too low a top rate, isn't unfairness* but rather that a too flat rate structure accelerates the natural tendency for wealth disparity to grow over time. Both history and common sense tell us that too extreme a wealth disparity leads to social instability**, which we universally believe is a bad thing. Consequently, I think, our taxation debate shouldn't be limited to how much revenue is needed, but should in large part be about how much progressiveness in the tax structure is needed to maintain societal stability. Sometimes I have seen a flat tax promoted on the basis of simplicity. But this is obviously a misconception. A bracketed progressive structure is hardly any more complex than a perfectly flat structure. As you will know, U.S. tax complexity does not come from the rate structure but from other features of the tax code. _______________________________ *An argument can be made that any tax structure that leads to an extremely skewed wealth distribution will ultimately create unfairness, but that is another topic. **Instability comes when opportunity is cut off no matter how hard one works or tries to get ahead, and the odds of succeeding are very low. In a capitalist society, opportunity is tied to not only initiative and diligence, but also to both access to capital and education -- there are other factors as well. There is strong correlation between growing wealth disparity and a shrinking middle class, growing household debt and deterioration of the public education system. Specific causes and effects are of course the source of endless debate.
Voluntary taxes don't work. For example, even in the most progressive country in the world: What? Seriously? ad infinitum! It's easier to state what they don't want to privatize. I am not using bold font for you or varying my text size for you. I am doing it for the people that pass by what looks like an interesting thread for a few seconds to get the gist of the argument. In fact, when I engage republicans on this site, I know I am not going to get anywhere. I learned that lesson long ago. It is the free-thinking independent that I am trying to offer thoughts to. I do agree that is it wasted on you since you take the time to read the whole line of thought. That is the tragedy of a two party system. I vehemently disagree with the USA win/lose political system. See video below.