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Tuesday, Aug. 30, 2011 | 2 a.m.
Warren Buffett says he pays a lower tax rate than his secretary, and that “coddled” rich people should pay more in taxes. His politics are showing (Buffett is a Democrat). In actuality, he pays a much higher tax rate than his secretary.
Dividends and capital gains are taxed twice: 35 percent when a corporation earns the money and 15 percent when it’s paid out to shareholders. As the owners of the corporation, shareholders pay both taxes for a combined rate of 45 percent. If you think shareholders and corporations are different entities, imagine how shareholder returns would be affected if corporations paid no income taxes.
Democrats say they want to stimulate the economy, create jobs and reduce the outsourcing of jobs overseas. Eliminating the corporate income tax would do all three. The increase in economic growth and American jobs would generate tax revenues that would offset the elimination of the corporate income tax. The tax rates on dividends and capital gains could be raised, so that shareholders bear their share of the offsetting tax revenues. A flatter, broader tax would be best.
Democrats’ animosity toward rich people is counterproductive to their stated goals. Class warfare against the people who invest in businesses and create jobs is not the way to grow an economy and lower unemployment. Allowing them to earn a better return is.
If Warren Buffett thinks rich people should pay more, he should leave his fortune to the government instead of the Bill and Melinda Gates Foundation. Or write a check.
No matter how many time this is brought up people fail to understand that we need tax reform not increasing tax rates to increase revenue
Warren Buffett uses deductions, credits, loopholes, etc to shelter his income.
Warren Buffett hides billion by giving it to his family run charities.
Warren Buffett as CEO will not accept a large salary tax at 35% but instead take his income as capital gains tax at 15%
Get the picture Warren Buffett is using the tax system to cheat the American people
A higher tax rate will not cause Warren Buffett to pay more taxes
Reform the tax system
"If Warren Buffett thinks rich people should pay more, he should leave his fortune to the government instead of the Bill and Melinda Gates Foundation. Or write a check."
Excellent point. When asked just such a question, why he doesn't write a check to Uncle to spend as gov't sees fit, quess what the multi-billionaire Oracle of Omaha said. I'll paraphrase. I trust myself and the charities of my choice to do a better job in spending my money, than the gov't. Exactly. For an Obama leaning supporter, his answer sounds like Conservative minded thinking to me.
Carmine A. DiFazio
"richard; big article on msnbc.com today says wealthy europeans agree with buffet on higher taxes."
Really? Isn't the European Union falling apart financially one country at a time? And only 10 plus years old. How quickly! What's the count to date? Greece, Spain, Ireland, down for the count and more to come. Good econ and political examples for the US to heed and follow. Yeah! Right!
Carmine A. DiFazio
Let's see, whose opinion should we value more; America's second richest man and one of the worlds most successful investors ever, or a letter writer who fails to mention the many tax loopholes exploited by the super wealthy and their accountant bloodhounds.
Trickle-down voodoo tax cuts for the top 2%? Haven't we been there and done that for ten years and $1.3 trillion? The only jobs that were created are the ones in China.
Mr. McCord,
Your statement "Democrats' animosity toward rich people is counterproductive to their stated goals" is all that the rest of us need to understand. Until that statement is no longer true, nothing much else matters, economically or politically.
Regards,
Purgatory
only people doing all the coddling here is Warren Buffet and Barrack Obama.
hey warren, how many people do you employee from china? how much of your furnitures you sell are manufactured in china? how much money did you pour into chinese government officials?
give me a break.
Warren Buffet has the option to spend his money as he sees fit, even placing it into a charitable trust. As far as we know he has not evoked the ever popular generation skipping "death tax" escape option in order to allow his heirs to forego paying any federal estate taxes. Taxing the "rich" is all relative. Where the rich create jobs, if any, and how much to tax is the real issue. Right now the country needs both new revenues and a revamped allocation of resources. One without the other probably won't work. Today, those out of work or taking pay cuts aren't good candidates for tax increases. Since about 75% of all individual wealth in America is held by the upper 5% of the population then why not tax them at the levels imposed by the Clinton administration? Twenty-three million new jobs created during that eight year time period eight couldn't be all wrong. The writer seems to be confused about the difference between a tax rate and taxes paid. Not many American corporations pay anything close to 35% taxes on income. These corporations pay nothing here in taxes when they create a job in a foreign country and the profits remain there. A favorite canard of the "don't tax me crowd" is always the double taxation on dividends bad math issue, the fictitious 35% corporate tax plus 15% dividend taxation. One reason many companies pay dividends is that they cannot find a better use for their money, no R.O.I. so they allow for double taxation to occur. Nobody ever seems to complain about having to pay the same double taxation on their money market or CD bank accounts where their return on savings can be taxed at a higher rate than 15%. Those savers are much less likely to be rich than the 15% dividend crowd. To paraphrase what Buffet said recently about taxing the rich," In my entire career I never call someone with an investment opportunity and then had them say, sorry the taxes are too high I can't consider it." Warren Buffet is old enough to remember the bad old days when the federal income tax rate on the "rich" was 90%. Gee, I wonder how they became rich?
Richard....the problem is that very few companies pay at the 35% rate and individuals offset dividend and interest income with deductions.
The majority of businesses and half the individuals pay NOTHING.
Buffet was a Republican for most of his life
Yet another letter that paints the situation in a way that the rich are being made scapegoats.
The truth cannot be clouded.
The rich DO NOT pay their fair share.
They have shoved off the sacrifice on everyone else. And they end up reaping not some of the benefits, but ALL of them.
Yet another letter painting it that it's the middle class declaring "class warfare."
The reality of the matter is that this "class warfare" has been declared against the middle class already by the rich for years and years.
Anyways, if that's what you want, YOU GOT IT. The gloves are off now. Let's call a spade a spade. It's out in the open and it's clobbering time!
Filthy rich? We're coming after you. Those tax cuts for the rich are going to end. If you feel we are picking on you, then so be it. If you feel these are tax increases, then I guess it is. Fair share, baby. Call it what you want. But you are going to pay.
This crap about tax cuts for the rich must continue in order to create jobs has been proven to be nothing but malarky.
To label the filthy rich as "job creators" (taking a page from the Republican Party playbook) is idiotic. To say they are both the same is the same as saying that zebras and horses have no differentiation.
Hold onto your purses and wallets, filthy rich. Hold on tight. We're coming after you. You can't win. Since you feel like we're taking it from you in some sort of highway robbery, then that's okay, we'll play it your way.
One thing that's not understood by the filthy rich is that no amount of money paid to campaign coffers will buy my vote.
We number just about 98 percent of the people.
We outnumber you.
You can't win. Because we can't be bought. Nor can we be snowed into your stupid way of thinking that gets us to vote against our best interests with candidates you hide behind.
We're onto you. Bet on that.
1. There is a difference -- often a big difference -- between nominal tax rates and effective tax rates.
2. 35% is the top marginal tax rate imposed upon taxable income. In well run corporations, the real effective tax rate is minimal.
3. Income earned by U.S. corporations in foreign operations is not taxable until it is brought back into the U.S. A significant part of U.S. corporate profits are earned in foreign operations and not repatriated.
Result: it is currently perfectly legal to have an accounting profit without having any U.S. taxable income. GE is the poster child for this.
Colin,
You just described mob rule. You, and the many like you, frighten me. Please chose a different enemy than the successful amongst us. Many are doctors, engineers, entrepreneurs, and producers of goods and services that lead to wealth. They are not the enemy of you.
Moreover Colin, you are not in your condition BECAUSE they are in theirs. You are where you are in life due to your efforts, as they are where they are due to their efforts.
Purgatory
Rychtarik:
Your post reminds me of Ronald Reagan's statement: "It's not that liberals are ignorant; it's that they know so much that isn't true."
To wit:
"he has not evoked the ever popular generation skipping "death tax" escape option in order to allow his heirs to forego paying any federal estate taxes"
The GST imposes an estate tax on transfers to grandchildren just so they do NOT escape taxation.
"Not many American corporations pay anything close to 35% taxes on income."
Simply incorrect, especially for corporations large enough to pay dividends.
"Nobody ever seems to complain about having to pay the same double taxation on their money market or CD bank accounts..."
Money market and CD accounts pay interest, not dividends, which is tax-deductible to the bank paying it, and, therefore, taxed only once.
I vigorously defend Buffett's right to do as he chooses with his private property. He is hypocritical, though, in telling others to hand over more to the government.
I wish the Republicans/Tea Partiers would put down Atlas Shrugged and read a real book about economics.
rcrpower and lericgoodman, excellent comments.
Purgatory - your statement:
Moreover Colin, you are not in your condition BECAUSE they are in theirs. You are where you are in life due to your efforts, as they are where they are due to their efforts.
totally contradicts the Tea Party GOP standard line that we (middle class) are where we are because the rich were kind enough to give us jobs inreturn for not taxing them fairly.
What gives?
"Trickle-down voodoo tax cuts for the top 2%? Haven't we been there and done that for ten years and $1.3 trillion? The only jobs that were created are the ones in China."
Wow, I haven't heard those one liners in a long time. The're still around and used in the vernacular? Some habits are hard to break even after proven wrong by history.
Reagan and Volcker took it on the chin in the early 80's by Keynsian economists like Klugman who said their policies would never ever work. Most were using these same old anti-Reaganomics euphemisms you are still using. They were and you are both wrong. Compare year 3 of Reagan's presidency to year 3 of Obama's. Under Reaganomics, GDP [read consumer spending] was at 5 percent and trending up to 8 percent. America was rolling after Carter's fiasco. Not voodoo. Smart econ policies. What is GDP now? GDP is limping along at 1 percent and into the foreseeable future. Recessionary.
GDP is one percent after ONE TRILLION in gov't spending and more in QE1 and QE2 of gov't printing money by the Fed. Why isn't the economy responding? It ain't workin. GDP is 2/3 of consumer spending. If consumers have no confidence in the econ direction of the country, under the current president, they don't spend. No jobs. Don't spend. No homes. Don't spend. Economy stagnates. That's where we are now, Recession. And unless and until Obama, whose not an economist like Reagan, changes course, kicks out his pro-keynsian econ advisors like Geithner and Bernanke with their quick fixes and Fed Reserve gimmicks, this is where the US will be in 14 more months. Heaven help us if Obama gets reelected and does the same old nonsense. Americans are doomed to another 4 years of pain and suffering. Just like the FDR years. How soon we forget.
Carmine A. DiFazio
Is Colin a one man flash mob? I suppose he could text Judy.
This is 2011, yet our tax rates are at the 1955 level and is not working.
Income inequality is back to where it was in 1928.
Since 2008, the middle class has lost 23% of it's wealth.
We have 14,500,000 unemployed with not much of a prospect for jobs.
The business community has $2,000,000,000,000 hidden under their upturned basket and are doing nothing to reinvest in their own infrastructures to make them more competitive.
Last year 25 hedge fund managers made over a billion daollars and their tax rate is only 15% or les. The rich and very rich invest in those hedge funds and they pay a tax rate of 15% or less.
Corporate taxes as a percentage of federal revenue.
1955.....27.3%
2010.....8.9%
Corporate taxes as a percentage of GDP.
1955.....4.3%
2010.....1.3%
Individual payroll taxes as a percentage of federal revenue.
1955.....58%
2010.....81.5%
The richest 400 Americans have average incomes of $354,000,000 and their tax rate is approximately 17%.
America is a third world country and the reason why is income inequality, constant trade deficits, and an unfair tax rate that burdens the middle and working classes.
Until those problems are improved, America will never build an equivalent of the Interstate highway system, the Space Program, or any other project that made America a growing concern.
When one compares the economic vigor of the America which had a top marginal tax rate of 91% with the current economic troubles of an America suffering under a top marginal tax rate of 35%, one might conclude from the data that it was counterproductive to reduce taxes on the rich so much.
"taxed fairly"
liberal CODE for "take every cent that hard working business owners make and spread the wealth around" for those who are too lazy to earn for themselves.
the politics of envy, as demonstrated by colon on a daily basis
It's wrong to look at tax rates alone from year to year as a argument for anything. You have to look at tax revenues for tax filers, total workers and total population. What are the percents of tax revenues to tax filers to total workers and total populations from one year of comparison to another. Else you are comparing in vain and blowing air in the wind.
CarmineD
I laugh at the comments that just try to poo poo me away.
I don't envy the rich at all. For some reason, their only argument is that the middle class envies the rich. No. I don't. I can definitively say that we are more worried about surviving.
I could care less what the filthy rich say or do. Only thing I care about is that they pay the same taxes, according to the wages earned, the VERY same per capita that I do. Right now, they don't. Not even close.
Also, from the comments I see, they are very, very quick to come after me. Why? Because they know I am right. And scared to let loose of anything.
MY class of people, the ones that are thought to envy the rich, does in fact outnumber the filthy rich.
Ninety-eight percent to two percent.
Call me crazy all you want, but I still persist in my belief that no amount of money will buy votes and make the middle class vote for something that will lead us down a path that sinks down in misery, and causes the filthy rich to get even filthier and nastier rich. While making the middle class sacrifice even more. How much more do you want? Do you want all of it? You want people living in the streets, scraping for food?
MY class will win.
Wait til the 2012 elections. The rich and the corporations can't hide behind the Republican Party forever. MY class will prevail. There will be justice. Because right now, we're not seeing it.
Talk about wave elections? In 2012, it will be a tsunami.
No more of this crap about privileged few and unwashed masses.
Time to get this country back on track and run like it's supposed to be run. Because the train track we're on right now is seriously getting nobody nowhere.
The filthy rich have to be slapped into getting out of that "us and them" mentality and back into thinking one country, indivisible, with justice for all.
I am happy with my lot in life. I stack up my 98 percent against your 2 percent.
It's time to fix things.
And if people think I'm a lone voice out here, you are seriously misinformed.
One person.
One vote.
People are doing research right now, as of this very minute, and finding out one right after the other that this crap we're going through as a nation is just that...crap. The Republican Party trying to change the message to only serve their party, trying to get into power, and serving their corporate and rich masters even more is slowly being revealed.
Wait til 2012. Call it flash mob. Call it mob rule. Call it whatever you want. I call it justice.
Colin, the only problem is that no matter WHO gets elected it will just be more of the same. These crooked politicians are ALL THE SAME - regardless of their Party affiliate. They are all CROOKS, looking out only for their own good.... honesty and politics is like oil and water - no matter how much you shake it up it just won't mix. Start with campaign reform and put reasonable limits on what can be spent on getting oneself elected... only THEN will the average joe even stand 1/2 a chance... but other than that, I totally agree with everything you're saying :)
It should be clear to most Americans that the corporate income tax is completely inefficient.
Not only does the U.S. have the highest and most uncompetitive corporate tax rate among the countries in the Organization of Economic Co-operation but it also collects the least amount of revenue. http://www.aei.org/outlook/101024 Worst of all, the cost of the tax falls on employees in the form of depressed wages. http://eng.am/o8EsKG
With all of these problems why shouldn't the U.S. lower its corporate tax rate to be able to compete with other developed nations for business? http://eng.am/qkwPaR
If the U.S. lowers its corporate rate to the average of the OECD countries then businesses looking to expand their operations would most likely choose the U.S. over another, less consumer-driven country. http://eng.am/nFYSql
Attracting companies to our shores will produce job opportunities that did not exist before. With new jobs being created it is just a matter of time until America's unemployment situation improves and our economy gets back on track.
Emthree, right on! Knowledge is power and little knowledge is dangerous. A dynasty trust (a type of GST)is a technique designed to allow its creator to pass wealth from generation to generation without the burden of transfer taxes, including estate and gift tax and the generation skipping transfer tax (GSTT). The technique passes wealth to successive generations of descendants with distributions and operation of the trust being controlled by the terms initially established by the grantor of the trust. The trust is irrevocable and, once funded, the grantor no longer has control of the assets and will not be able to reach the assets or amend the trust terms.
It comes back to the argument, if low taxes on the wealthy create jobs, where are the jobs? Low taxes for the wealthiest only creates greater profit.
rychtarik:
Knowledge is indeed power. However, plagiarism is a form of theft. From the following website, I paste below:
(http://www.financeware.com/ruminations/w...)
"What Is a Dynasty Trust?
Briefly, a dynasty trust is a technique designed to allow its creator to pass wealth from generation to generation without the burden of transfer taxes, including estate and gift tax and the generation skipping transfer tax (GSTT). The technique passes wealth to successive generations of descendants with distributions and operation of the trust being controlled by the terms initially established by the grantor of the trust. The trust is irrevocable and, once funded, the grantor no longer has control of the assets and will not be able to reach the assets or amend the trust terms."
Notice that the quote above lacks your parenthetical phrase "(a type of GST)", which you inserted to try to prove that you were not incorrect. You are a fraud.
ColinFromLV:
Regarding the rich, you ask, "How much more do you want? Do you want all of it? You want people living in the streets, scraping for food?"
The answer is no. The rich want you to be their customer. Steve Jobs, Bill Gates, Warren Buffett, Steven Spielberg, et al, need you to buy their products. The rich people you describe live in places like Syria and Venezuela, where they don't need customers, because they steal their wealth.
You may enjoy your fantasy of slapping the filthy rich, but why not pursue the American dream? That's all that most of the rich in America did. There are no limits on what you can achieve, other than the ones you place on yourself.
Be advised, though, that the obstacles you run into will mostly be placed there by government. You may find yourself thinking differently then.
Amazing how much time we waste worrying about our societies elites. They are laughing all the way to the bank!
http://www.nypost.com/p/news/opinion/edi...
That doesn't seem to fit what Warren Buffet said.
McCord,...turn off Fox,...they're turning you into a cluck. Republicon talking points are quite stale. If perhaps you think your letter will help you join "Club Con" home of the wealthy you'll soon find your NOT wealthy enough to be a Republicon. They will use your mind, take your money and your vote,...but in the end they have nothing for you.
Tax the wealthy! Their free ride needs to come to an end and yesterday isn't soon enough.
Tax rates are irrelevant to the actual amount of taxes paid compared to income when you factor in deductions which effectively reduce the net taxable rate, often dramatically.
Richard, you need to go back to school. This time, take income tax 101.
blah blah blah blah
It comes back to the argument, if spending a trillion dollar "stimulus" create jobs, where are the jobs? "Stimulus" only creates more debt.
The writer is on point--correct!!!
Tax the rich, that's where all of the money is.
We need the revenue.
Greedy republicans need to pay for the mess that
they created.
"Result: it is currently perfectly legal to have an accounting profit without having any U.S. taxable income. GE is the poster child for this."
Who did President appoint as the US jobs czar,Jeffrey Immelt, CEO of GE. Great choice.
If US tax law differential didn't give preferential treatment to US corp's and businesses overseas, there would be no shills overseas to avoid US taxes. More would be and stay home grown on US soil. Reform the tax code like Reagan did with bi-partisan support in 1986. Tax revenues will increase just as they did all through the 80's.
Carmine A. DiFazio
Ignorance...
Fed to Fox Followers like baby pablum,
yum yum yum!!!
Isn't that GOOD???
There, there...
have a widdle bit more...
C'mon, now, you can do it!
IN she goes... YAY!
Repeat after US!
"The RICH should PAY. NO. TAXES."
It's "COUNTERPRODUCTIVE"... Okay?
"The richest 400 Americans have average incomes of $354,000,000 and their tax rate is approximately 17%.
America is a third world country and the reason why is income inequality"
So that's the solution to income inequality--tax payer inequality. Let 400 of the wealthiest Americans [who made their fortunes the old fashioned way: They earn it] pay all the taxes for 100 million working Americans. Wonderful!! Why didn't Obama think of that? Oh, that's right he did.
Carmine A. DiFazio
) Exxon Mobil made $19 billion in profits in 2009 but paid no federal income taxes -- it received a $156 million IRS rebate.
2) Bank of America received a $1.9 billion tax refund last year, although it made $4.4 billion in profits and received bailouts of nearly $1 trillion.
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.
7) Goldman Sachs in 2008 only paid 1.1 % of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion in bailouts.
8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion federal bailout.
9) ConocoPhillips, the 5th largest oil company in the US, made $16 billion in profits from 2007 - 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.
10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.
In 2009, the mining industry had gross revenue of 5.8 BILLION. After deductions, including some that may have not complied with state law, the net profit was 1.8 BILLION. The tax paid to the state of Nevada was 48.6 MILLION. The state of Alaska collects a royalty of 25% on oil. Alaska currently has a 3 BILLION surplus in the state budget, and Exxon just reported record 1st quarter profits of over 10 BILLION, so the royalty payment doesn't seem to be causing the oil companies financial problems. The Barrack annual report has just been published, and shows record profits and dividends above the record levels of 2009. This is a link to the report, you may want to look closely at pages 2, 3, and 4. http://media.lasvegassun.com/media/pdfs/......... Net earnings and profits have jumped dramatically between 2009 and 2010. Shareholders return on investment jumped from 12% in 2009 to 19% in 2010.
In 2010, the Cortez Hill mine in Nevada produced 1.14 MILLION ounces (31.6 TONS) of gold at a cost of $312 per ounce. In the first quarter of 2011, the mine produced 366000 ounces (11.4 TONS) at a cost of $220 per ounce, which would produce a profit of approximately $549,000,000 assuming a profit per ounce of 1500. Nevada is the SECOND largest producer of gold in the world. Gold is selling for approximately $1800 per ounce.
In contrast, the gaming industry had gross revenue of 5.8 Billion in 2010, and paid over 425 MILLION in state taxes. Hardly seems fair does it?
Walmart, Target, the banks and other national corporations pay NO taxes on profits earned in Nevada. The only taxes that they pay are 1.17 % payroll tax and unemployment taxes.
Richard most these people can not handle the math. If someone makes more then them they should pay all of it in taxes. The bigger fact is to get dividends you must buy stock, taking risk. The government does not give you a tax credit if the company slashes the dividend. The capital loss is limited to 3000 per year but if you have a 10,000 capital gain you have to pay the tax that year. People that do buy stock, and anyone can have this "tax break", provide capital for companies to use for expansion and growth which in turn means more jobs. This is a much more efficient way to job growth then paying a higher tax and letting the government spend it on stimulus for job growth. Lastly it is to bad so many people seem to not be able to view GE financial statements. You can find it on their web site, and more info about what really happened.
http://www.gereports.com/setting-the-rec...