he's also a better human being than most of you

http://business.timesonline.co.uk/tol/business/money/tax/article1996735.ece

6/28/2007 11:29:23 AM

How do you rate better human being? Ethnic purity?

6/28/2007 11:31:31 AM

The middle class ends up paying a little less than 14% of their income in taxes on average. The top 1% ends up paying about 35%.

[Edited on June 28, 2007 at 11:33 AM. Reason : 2]

6/28/2007 11:33:26 AM

So, you're saying that those who make the most money off of this country have to pay the most back?

shocking

6/28/2007 11:34:22 AM

We could double the federal income tax rate on the rich from 35% to 70% and increase Buffets effective tax rate from 18% to 19%. Or, we could start eliminating the most egrigious loopholes and writeoffs and actually tax him at the same 35% that other high income people are already paying.

If people are successfully avoiding taxation, the solution is not to increase the tax rate, it is to go after those gaming the system.

The first thing we should do is cap home motgage interest writeoffs and make sure it only applies to the primary household. Secondly, charity should not be tax-deductable. This is just another super-rich tax evasion mechanism, since the rich tend to give away a higher proportion of their income each year, all it accomplishes doing is reducing the effective tax rate charged to the rich.

[Edited on June 28, 2007 at 11:45 AM. Reason : .,.]

6/28/2007 11:41:22 AM

WTF is "Bubba" talking about???

Quote :

"Warren Buffet is like a dog who has been given too much food and pisses on the remainder so that no other dogs can eat it. He has made his money, so now he is going to do whatever he can to screw the rest of us. He is certainly not the man his father was. If he feels so guilty, he should just cut a $52 billion dollar check to the US government and shut his trap. The solution, of course, is for our government in the US to spend less - much less - and stop interfering in other nation's problems and stop being a nanny to its citizens. That, of course, will never happen. Maybe one day the Chinese will liberate us from this oppressive government. Bubba, Loachapolka, Alabama"

Quote :

"The middle class ends up paying a little less than 14% of their income in taxes on average. The top 1% ends up paying about 35%."

I don't know much about US tax laws and shit, but I thought I just read Warren Buffet saying that he pays 18% while his secretary pays 30%.

?

6/28/2007 11:42:03 AM

simple solution for warren = don't itemize

6/28/2007 11:43:35 AM

^^I said "on average" for a reason.

6/28/2007 11:47:15 AM

Quote :

"last time I checked, there weren't no law keeping Mr. Buffett from writing a $ 10 million check to the government to make up for this tax discrepancy - why don't he do that ? K. Nutt, Auburn, AL"

So much wisdom from a man named "K. Nutt"

6/28/2007 12:42:15 PM

Title of that article is quite misleading

He paid a lower tax percentage than his secretary last year, but he paid a lot more money

6/28/2007 12:49:56 PM

Income redistribution is what it all works out to. And we all know how well that works...

6/28/2007 1:40:40 PM

Quote :

"The middle class ends up paying a little less than 14% of their income in taxes on average. The top 1% ends up paying about 35%."

where the fuck did you get this from? myself, my parents and pretty much everyone I know, pays more than 14%

6/28/2007 1:43:56 PM

This article is really misleading. It makes it seems like a huge chunck of the super-rich can fly under the tax radar. Warren Buffett is in a very small group of people who make outrageous money in capital gains consistently.

Quote :

"The first thing we should do is cap home motgage interest writeoffs and make sure it only applies to the primary household. Secondly, charity should not be tax-deductable. This is just another super-rich tax evasion mechanism, since the rich tend to give away a higher proportion of their income each year, all it accomplishes doing is reducing the effective tax rate charged to the rich. "

I dont think you know what you are talking about. I dont see any reason that mortgage interest should apply to the primary household. The rich very rarely even benefit from home mortgage interest, let alone mortgage interest from multiple properties. How can this be true? First, mortgage interest gets capped on home acquistion debt once the debt is over $1,000,000. For the super rich this means any interest they pay on a debt over $1,000,000 is non deductible. Second, have you ever heard of the Alternative Minimum Tax? When anyone has itemized deductions which reduces their tax liability the AMT will always kick in, reducing the benefits of itemizing.

I am in now way conservative but if we want to save Tax Dollars the easiest way to do it is to cut down on the massive fraud that revolves around the Earned Income Credit. There is so much frivilious earned income credit given out that it has become hard to determine the legimiate claims.

Also, many people have found a loophole around filing status which has cost the government alot of money. People will now file as Head of Household or Single rather then the correct filing status of Married Filing Jointly because they know they can see much larger refunds in there favor.

Warren Buffett and the rich are not the problem. I hate to say it but I think its the poor.

6/28/2007 1:53:12 PM

flat tax with a floor (below 20k or? doesn't pay any) 10-20% (15 would be my choice) non negotiable, unavoidable tax.

ss - government manage pension fund, payed via a set % from your income (additional 'tax') you pay in to your 'pension account' and get that back later, no supporting of others....

food sales tax - gone

sales tax on other goods - ok i can see the point of this

property taxes - payed once per owner

[Edited on June 28, 2007 at 1:57 PM. Reason : s]

6/28/2007 1:56:39 PM

Quote :

"where the fuck did you get this from? myself, my parents and pretty much everyone I know, pays more than 14% "

A person that makes $50,000 a year, doesnt own a home, and doesnt itemize, has an effective federal income tax rate of 15.62%. I guess the question is, what is middle class?

6/28/2007 1:57:41 PM

Quote :

"For 2004 and 2005, the AMT rate is 26 percent on AMT income up to $175,000 ($87,500 if married filing separately) and 28 percent on AMT income over that amount."

Well, this doesn't explain how Warren Buffet managed to only pay 18% of his income in taxes; sounds to me like the AMT still has too many loopholes.

Besides, the AMT is a fairly flat tax; if warren buffet is right then his secretary would be better off filling just under the AMT.

[Edited on June 28, 2007 at 2:51 PM. Reason : .,.]

6/28/2007 2:50:57 PM

He only pays his secretary 60k a year? wtf

My aunt, who is a secretary for a VP at a large company in N. VIrginia, makes more than that...

6/28/2007 2:59:16 PM

Quote :

"on AMT income"

My guess, although I have not seen Buffetts Tax Return, is that a majority of his income is on Capital Gains. You can avoid the AMT on Capital Gains.

Also, AMT is not a tax you can chose. AMT is an additional tax that is calculated on your tax liability. The secretary never got hit with the AMT, which in her case was a good thing.

6/28/2007 3:10:03 PM

Quote :

"where the fuck did you get this from? myself, my parents and pretty much everyone I know, pays more than 14%"

There are a lot of exceptions for middle-class families. My co-worker, a married homeowner with 3 kids who makes $85,000 per year, pays zero federal income taxes. I'm not exactly sure how that works.

Quote :

"Effective Federal Tax Rate, 2004* Federal taxes as percent of income Top 1% 31.1 Top 5% 28.5 Top 10% 26.9 Highest Quintile 25.1 Fourth Quintile 17.2 Middle Quintile 13.9 Second Quintile 10.0 Lowest Quintile 4.5 *Includes income taxes, social insurance taxes excise taxes, and corporate income taxes Data: Congressional Budget Office "

I was off a little on the top 1% in my original post.



[Edited on June 28, 2007 at 4:10 PM. Reason : 2]

6/28/2007 4:01:17 PM

Quote :

"My co-worker, a married homeowner with 3 kids who makes $85,000 per year, pays zero federal income taxes. I'm not exactly sure how that works. "

Are you sure? Does his/her spouse work?

6/28/2007 4:54:16 PM

your neighbor could be the poster boy for the AMT

6/28/2007 4:57:07 PM

Spouse doesn't work.

He claims that because he pays so much in property taxes and has 4 dependents + some itemized write-offs, he ends up with zero tax liability or credit back to him every year.

6/28/2007 5:00:01 PM

I vaguely recall this exact same topic coming up about this time last year, when Smoker4 pretty comprehensively pwnt Buffett's argument... 

6/28/2007 8:17:26 PM

Quote :

"If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent -Warren Buffet "

I wonder if Warren was all worried about the other 99% when he was a young turk working his way up to his first million? If you asked him at 40 if his wealth was the result of being either the luckiest 1% of humanity or a hard working and crafty stock trader...I wonder what he'd say.

My guess is that he is realizing his own mortality and is feeling guilty about his success.

6/28/2007 10:33:08 PM

evenso, he's not the only one. last time around it was called "The Gospel of Wealth"

6/29/2007 3:59:30 PM

Quote :

"Spouse doesn't work. He claims that because he pays so much in property taxes and has 4 dependents + some itemized write-offs, he ends up with zero tax liability or credit back to him every year. "

Ok, that makes sense. A single income family with 4 kids making 85000 is not wealthy by any means.

6/29/2007 4:53:05 PM

i'm a fan of his brother Jimmy

6/29/2007 4:55:47 PM

From the article:

Quote :

"Last week senior members of the US Senate proposed to increase the rate of tax that private equity and hedge fund staff pay on their share of the profits, known as carried interest, from the 15 per cent capital gains rate to about 35 per cent. Lloyd Blankfein, the chief executive of Goldman Sachs, acknowledged in an interview yesterday that there were justified concerns about the huge profits generated by private equity firms and that he worried that income inequality was “poisoning democracy”."

"Hedge fund staff" also equals "Venture Capitalists." The guys responsible for little companies like Google that have surely poisoned Democracy.

Let's review the "evil" tax system at work under Carried Interest:

1. General partner in VC firm (excuse me, "hedge fund") uses his reputation, contacts, sweat, blood, and tears to raise capital.
2. His limited partners agree to pay him a percentage of the profits from the fund. This is carried interest.
3. His VC firm then goes out into the world, somehow finds the next Sergey Brin and Larry Page, and funds them despite their just being poor Stanford grad students with an idea and some angel funding.
4. In return, he makes money per #2 when Google makes explosive amounts of money.
5. The IRS, in a fit of common sense, agrees to tax his profts as a "long-term capital gain" rather than as ordinary income.

Now, the Warren Buffetts of the world will say:

"That general partner is being taxed at a lower rate than my secretary, despite his having made BILLIONS from his Carried Interest profits!"

Am I the only who thinks that maybe the World's Greatest Investor has forgotten the difference between, say, Investing and "Getting a Job?"

Let's compare, in a tabular way, the VC who funded Google and made BILLIONS from Carried Interest, with Warren Buffett's secretary.

Venture Capitalist made money by:

1. (Most likely) founding the VC firm with his own money, just to become General Partner to begin with. If not, it was still a long road from his business degree.
2. Compiled a huge rolodex of contacts whom he could gratuitously sell the virtues of his fund to. Not to mention his reputation.
3. (This is the important part) Somehow found Sergey Brin and Larry Page, some poor Stanford grad students, and and risked millions of dollars of his fund's money (i.e., his reputation and sweat) on them.
4. Took part in the Google IPO, which happened at the tail end of a god-awful recession, and was a 1 in 100 chance during good times. The other 99 flopped and the GP's time, reputation, and money were staked on those as well.

Secretary made money by:

1. Got a job. Collects paychecks every few weeks at regular intervals.

This is all an oversimplification. The basic point being that there's a big difference between taking a risk, and just getting a job.

Under the current Carried Interest debate, the proposal is to tax GPs in Hedge Funds more for CI because they did not necessary invest "real" capital to make CI. This shows just how narrowly (and narrow-mindedly) the government views the concept of "risk" in business. To the government, all businesses are post offices.

And to Warren Buffett, all capitalists are basically secretaries.

The tax rates are optimized for risk-taking through capital gains because it is only through risk-taking that our economy grows. Since when does our society stigmatize the entrepreneurial cowboys who take big leaps of faith the same as "Fat Cat" CEOs who sit around collecting "Fat" paychecks?

When did we lose sight of this important difference? When did Warren Buffett?

[Edited on June 30, 2007 at 2:35 PM. Reason : foo]

6/30/2007 2:28:23 PM

flat tax

7/1/2007 8:43:30 AM

consumption-based tax

7/5/2007 6:48:03 PM