Warren Buffett on Taxes

[Benny B]

Warren Buffett on Taxes

Morgan Housel
October 6, 2010

It's election season. Taxes are scheduled to rise sans intervention. Cue heated debates that involve few facts and lots of shouting.

Here, though, are some facts:


Tax receipts as a percentage of gross domestic product are extremely low on a historical basis. Most of this is because of the recession -- there's simply less income to tax. But here's another reason:



Any rational debate on the fairness of raising top tax rates has to acknowledge that current rates are historically low to begin with. The focus shouldn't be on whether top rates go up or down; it should be on the raw level of rates. And right now, they're low. This is very likely why some wealthy corporate elites like Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) Warren Buffett, Bill Gates Sr. -- father of the Microsoft (Nasdaq: MSFT) co-founder -- and Netflix (Nasdaq: NFLX) CEO Reed Hastings have come out practically begging to have their taxes raised.

More specifically, here's Buffett yesterday:

    We're going to have to get more [tax] money from somebody. The question is, do we get more money from the person that's going to serve me lunch today, or do we get it from me? I think we should get it from me. I have a lower tax rate, counting payroll taxes, than anybody in my office. And I don't have a tax shelter -- I just take the form and fill out the numbers. I think that's very wrong, and I think that if we're going to get money -- and we're going to need money; we are not taking in enough money at the federal government level ... it shouldn't be [from] the bottom 98%. It should be more from people at the top.

But is that the right thing to do with the economy in the dumps? Here's Buffett again:

    If you get $100 billion more of taxes ... from people like me at the top, it means you borrow $100 billion less out of the economy. Somebody has to come up with that $100 billion ... you're taking the money from the economy either way. The only question is whether you take it by borrowing or by taxes. And I see no problem in taxing people at the very high levels significantly more than they're being taxed now. And I might very well cut taxes even further for the people at lower levels.

[MM2K]

The top rate is low compared to what? The miserable seventees when it was at 70%? The 50s when the US was the only place to do business right after WW2, and the rate was 90% ? Fuck Warren Buffett and his ilk. He is saying this stuff because truly rich people like him dont pay taxes no matter WHAT the top rate is. People like him have the power to move thier income from place to place and from time to time. He also has access to many deductions. The people who do not have the power to escape this tax, the people it hurts the most, are people who barely make $250000. They are the people you liberals criticise. You people believe you have a "right" to more of thier money, when they have children to support and college and medical school bills to pay off. The top rate is still way higher than what Reagan had it down to in the late 80s.

[Soul Crusher]

No one is stopping these billionaires from donating more money to the govt or to stop offsetting their taxable income with massive charitable contributions. 

Buffet and Gates are phonies on this. 

[MM2K]

No one is stopping these billionaires from donating more money to the govt or to stop offsetting their taxable income with massive charitable contributions. 

Buffet and Gates are phonies on this. 

You hit the nail straight on the head.

[Benny B]

No one is stopping these billionaires from donating more money to the govt or to stop offsetting their taxable income with massive charitable contributions. 

Buffet and Gates are phonies on this. 

Great! So you support Obama's decision to keep the irresponsible Bush tax cuts going for 98% of Americans and letting the top 2% letting their tax cuts expire. I knew you'd see the logic of this, PEA BRAIN! So...are you going to get on those GOP candidates to let the Buffetts, and Gates, and Bloombergs of the world pay some more taxes? Surely you don't support TEA BAGGER candidates that want to hold up the expiration of the tax cuts for those extremely wealthy individuals after hearing that the most wealthy are willing to pay a measly 3% more in taxes, right?

[MM2K]

Great! So you support Obama's decision to keep the irresponsible Bush tax cuts going for 98% of Americans and letting the top 2% letting their tax cuts expire. I knew you'd see the logic of this, PEA BRAIN! So...are you going to get on those GOP candidates to let the Buffetts, and Gates, and Bloombergs of the world pay some more taxes? Surely you don't support TEA BAGGER candidates that want to hold up the expiration of the tax cuts for those extremely wealthy individuals after hearing that the most wealthy are willing to pay a measly 3% more in taxes, right?

THE GATES AND BUFFETS OF THE WORLD DONT PAY TAXES AND NEVER WILL. But considering how much wealth they create, who gives a fuck? I just dont like them telling sales managers like my dad who have been with the same company for 30 years that they need to pay more taxes on a $250000 income. Fuck that, and fuck him.

[Benny B]

THE GATES AND BUFFETS OF THE WORLD DONT PAY TAXES AND NEVER WILL.

Of course they pay taxes, dipshit. Tis country could not sustain itself were the most wealthy not paying any taxes. But as you are under the illusion that they pay nothing, let's see your PROOF.

But considering how much wealth they create, who gives a fuck?

I "give a fuck" numbnuts, as a portion of that wealth put back into the system makes the tax burden much less on the middle class. It's why we can afford to keep Bush's massively irresponsible tax cuts for the middle class and poor for a little while longer.

I just dont like them telling sales managers like my dad who have been with the same company for 30 years that they need to pay more taxes on a $250000 income. Fuck that, and fuck him.

Ahhh...so this is personal. You don't want your "daddy" to have to pay a little bit more in taxes. Well son, I think daddy will be alright. If all he makes is $250000 a year, I'm sure he can survive a tax hike on the income he makes ABOVE $250000. He might not even qualify of he just makes $250k. If he makes over that amount and isn't willing to pay 3% more in taxes on the amount above $250k [ie., 3% of 50,000 on $300k] than I say fuck 'em. Too bad, so sad, but you've got to suck it up. Bush put us in a massive hole, and you've got to help dig us out.

[Benny B]

THE GATES AND BUFFETS OF THE WORLD DONT PAY TAXES AND NEVER WILL. But considering how much wealth they create, who gives a fuck? I just dont like them telling sales managers like my dad who have been with the same company for 30 years that they need to pay more taxes on a $250000 income. Fuck that, and fuck him.

Taxes

Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes (due to their being from dividends & capital gains), while his employees paid 33% of theirs, despite making much less money.[123] On the other hand in 2008 Berkshire Hathaway paid $1.9 billion in federal corporate income taxes on $7.5 billion in earnings (more than 26% in federal taxes alone).[124] “How can this be fair?” Buffet asked, regarding how little he pays in taxes compared to his employees. “How can this be right?” Buffet added:

    “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”[125] [126]

Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".[127] In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy.[128] Some critics have argued that Buffett (through Berkshire Hathaway) has a personal interest in the continuation of the estate tax, since Berkshire Hathaway has benefited from the estate tax in past business dealings and had developed and marketed insurance policies to protect policy holders against future estate tax payments.[129] Buffett believes government should not be in the business of gambling, or legalizing casinos, calling it a tax on ignorance.[130]

[MM2K]

Of course they pay taxes, dipshit. Tis country could not sustain itself were the most wealthy not paying any taxes. But as you are under the illusion that they pay nothing, let's see your PROOF.I "give a fuck" numbnuts, as a portion of that wealth put back into the system makes the tax burden much less on the middle class. It's why we can afford to keep Bush's massively irresponsible tax cuts for the middle class and poor for a little while longer.
Ahhh...so this is personal. You don't want your "daddy" to have to pay a little bit more in taxes. Well son, I think daddy will be alright. If all he makes is $250000 a year, I'm sure he can survive a tax hike on the income he makes ABOVE $250000. He might not even qualify of he just makes $250k. If he makes over that amount and isn't willing to pay 3% more in taxes on the amount above $250k [ie., 3% of 50,000 on $300k] than I say fuck 'em. Too bad, so sad, but you've got to suck it up. Bush put us in a massive hole, and you've got to help dig us out.

Wealthy people like Buffett dont pay taxes. They have the ability to get massive deductions that keeps them from having to pay a lot. Ask Donald Trump. He has said he doesnt care what the rate is. Just make sure to keep giving him his deductions. And there is not enough of those types of people that the country would collapse if they didnt pay taxes. That's the whole point. Most of the people who are "rich" that you demonize are people who make between $250000 and $1 million. Those are the people who get shafted. And considering that my dad is planning on retiring pretty soon, no if wouldnt be very nice to make him pay more taxes. He needs that diesel fuel to power both his red corvette AND white corvette. And please stop saying that Bush dug us into a whole. He did no such thing. Recessions have to occur from time to time. You do remember that we had an enemployemnt rate of 4.8% under Bush right? So far Bush has a better economic record than Obama. I dont remember Bush allowing the unemployment rate to stagnate at 9.6% or higher for more than 12 months.

[Benny B]

Wealthy people like Buffett dont pay taxes. They have the ability to get massive deductions that keeps them from having to pay a lot. Ask Donald Trump. He has said he doesnt care what the rate is. Just make sure to keep giving him his deductions. And there is not enough of those types of people that the country would collapse if they didnt pay taxes. That's the whole point. Most of the people who are "rich" that you demonize are people who make between $250000 and $1 million. Those are the people who get shafted. And considering that my dad is planning on retiring pretty soon, no if wouldnt be very nice to make him pay more taxes. He needs that diesel fuel to power both his red corvette AND white corvette. And please stop saying that Bush dug us into a whole. He did no such thing. Recessions have to occur from time to time. You do remember that we had an enemployemnt rate of 4.8% under Bush right? So far Bush has a better economic record than Obama. I dont remember Bush allowing the unemployment rate to stagnate at 9.6% or higher for more than 12 months.

Taxes

Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes (due to their being from dividends & capital gains), while his employees paid 33% of theirs, despite making much less money.[123] On the other hand in 2008 Berkshire Hathaway paid $1.9 billion in federal corporate income taxes on $7.5 billion in earnings (more than 26% in federal taxes alone).[124] “How can this be fair?” Buffet asked, regarding how little he pays in taxes compared to his employees. “How can this be right?” Buffet added:

    “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”[125] [126]

Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".[127] In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy.[128] Some critics have argued that Buffett (through Berkshire Hathaway) has a personal interest in the continuation of the estate tax, since Berkshire Hathaway has benefited from the estate tax in past business dealings and had developed and marketed insurance policies to protect policy holders against future estate tax payments.[129] Buffett believes government should not be in the business of gambling, or legalizing casinos, calling it a tax on ignorance.[130]

[Benny B]

Wealthy people like Buffett dont pay taxes. They have the ability to get massive deductions that keeps them from having to pay a lot. Ask Donald Trump. He has said he doesnt care what the rate is. Just make sure to keep giving him his deductions. And there is not enough of those types of people that the country would collapse if they didnt pay taxes. That's the whole point. Most of the people who are "rich" that you demonize are people who make between $250000 and $1 million. Those are the people who get shafted. And considering that my dad is planning on retiring pretty soon, no if wouldnt be very nice to make him pay more taxes. He needs that diesel fuel to power both his red corvette AND white corvette. And please stop saying that Bush dug us into a whole. He did no such thing. Recessions have to occur from time to time. You do remember that we had an enemployemnt rate of 4.8% under Bush right? So far Bush has a better economic record than Obama. I dont remember Bush allowing the unemployment rate to stagnate at 9.6% or higher for more than 12 months.

LOL
 Bush started TWO wars completely unpaid for and gave a MASSIVE tax cut to the wealthy. He is COMPLETELY responsible for the shitty mess Obama is getting us out of, you moron.



What The Republicans Would Cut From The Budget, Buffett on Taxes

[GigantorX]

Uh, Bush "gave" a tax cut to every single income bracket.

Please stop being an idiot.

[Benny B]

Uh, Bush "gave" a tax cut to every single income bracket.

Please stop being an idiot.

Uh...no shit, Sherlock. Hence the skyrocketed budget deficit. What does that have to do with the cost of tea in China?

imbecile

[Soul Crusher]

Idiot - the deficit was not nearly at the level it was under almost all of the bush years as obama has exploded it. 

As for taxes, no one is stopping the wealthy from volunteering to pay more if they feel undertaxed. 

[Benny B]

Idiot - the deficit was not nearly at the level it was under almost all of the bush years as obama has exploded it. 

Please, you don't give a SHIT about the deficit. 

As for taxes, no one is stopping the wealthy from volunteering to pay more if they feel undertaxed. 

LOL
The gov't isn't going to, nor is it supposed to, wait for wealthy people to "volunteer" to pay more taxes.

[Soul Crusher]

So then they are full of shit. 

BTW Benny:  When you did your tax returns for past 8 years, assuming you work of course, did you pay the clinton rate or the bush rate?

[Kazan]

Its amazing that this country managed to survive from 1776 until 1913 without the 16 amendment.

[Soul Crusher]

Its amazing that this country managed to survive from 1776 until 1913 without the 16 amendment.

And when the govt gets all this new cash - what are they going to do with it? 

Piss it away on obamacare, ue extensions, bogus stim bills, etc etc. 

[Kazan]

And when the govt gets all this new cash - what are they going to do with it? 

Piss it away on obamacare, ue extensions, bogus stim bills, etc etc. 

That's the problem, the government collects more money, it doesn't go to pay down debt. A new entitlement springs up, then they are crying again that we need to raise taxes. Fuck them, everyone else has to live on a budget, why is the government different?

And as far as the rich, I don't begrudge anyone for being a millionaire, good fro them.

[GigantorX]

500 billion a year just to service the debt.

[GigantorX]

Uh...no shit, Sherlock. Hence the skyrocketed budget deficit. What does that have to do with the cost of tea in China?

imbecile

Ok, so you're admitting that they weren't "tax cuts for the rich".

I'm glad we could agree on that.