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Warren Buffet demands to pay more taxes

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RudyGarmisch
Posts: 25443 - Karma: 13,844
http://www.bbc.co.uk/news/business-14533987

Warren Buffett has called for Congress to make him and his "mega-rich friends" pay more income tax.

In a piece in the left-leaning New York Times, the billionaire investor and philanthropist said the rich should do more to help plug the deficit.

He called for a tax rise for those earning more than $1m (£600,000), and a higher rate for those on over $10m.

In a rebuttal of arguments made by Republicans, he said tax rises would not hurt investment or jobs in the US.

He told Congress to "stop coddling the super-rich".

"Our leaders have asked for 'shared sacrifice'," he wrote. "But when they did the asking, they spared me."

Challenge to Congress
Mr Buffett explained that, like many top earners, his income came entirely from investments rather than from employment, which are subject to lower taxes in the US.

He said last year he paid an effective tax rate of 17.4%, less than the 33% to 41% paid by the employees in his office.

He dismissed arguments made by senior Republicans, including John Boehner, speaker of the House of Representatives, that taxing higher earners more would damage investment and job creation in the US.

"I have yet to see anyone... shy away from a sensible investment because of the tax rate on the potential gains," he said.

He pointed out that the effective tax rate paid by the highest earners was much higher in the 1980s and 1990s than in the last decade, and yet job creation was much higher in the earlier decades.

His proposed tax rises would not affect 99.7% of taxpayers, he claimed, adding that a 2% payroll tax cut passed in December should stay in place to help the poor and middle classes.

However, Mr Buffett also set a challenge for the Democrats who are set to form a special Congressional committee with Republicans to agree $1.5tn in budget savings.

He said "job one for the 12 [committee members] is to pare down some future promises that even a rich American can't fulfil".

While Republicans have been implacably opposed to tax rises, Democrats have been loathe to cut healthcare and social security benefits that some economists claim will become unaffordable as Americans live longer and baby-boomers retire.
Aug 15 2011 1:52PM
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Lord.Quasimoto
Posts: 958 - Karma: 33
this is the worst arguement ever. being a successful investor in no way shape or form makes you qualified to make political / economic decisions.
Aug 15 2011 3:51PM
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J.D.
Posts: 21362 - Karma: 5,142

Sure it does, it just doesn't mean that you don't also have a political agenda which is leading the case you present to be noticeably slanted in a given ideological direction so as to influence people who don't know what they're talking about, which is the case here. Buffet knows better but he's writing for the NYT and playing to an audience.

But yes, the appeal to authority is a pretty bad argument.

Aug 15 2011 3:53PM
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Alpine3
Posts: 1811 - Karma: 24
your parents combined net income a year was less than $40,000?? the poverty level for a family of 4 is $22,350. idk how that lifestyle is even possible unless your parents either bought your house outright and had no mortgage or had some other nice stash of money before they met/had you.

if it is.. damn. your parents really know how to manage/invest and good for them
Aug 15 2011 3:54PM
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Lord.Quasimoto
Posts: 958 - Karma: 33
you clearly don't get what i am saying. any increase in the tax rate will halt potential investment opportunities. there is nothing uncertain about that, its a numbers thing (yes or no, NPV>0 or <0)
Aug 15 2011 3:55PM
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Alpine3
Posts: 1811 - Karma: 24
ha easyyy. first of all he said nothing about living with a family. im strictly speaking $80k living alone and living/working in NYC. have you ever looked at apartments there??

if you work say in the financial district,  your are not going to want to live longer than an hour commute away.. your rent is at least going to be $1500 for even a studio apt. between all your other bills.. 80k will  be comfortable at best FAR from that of living like a king. 

second of all, how would you define a decent life?? i think thats kind of an important thing to get on common ground (even tho, like i said above, i was still comparing to him saying he could life like a "king")
Aug 15 2011 4:14PM
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Alpine3
Posts: 1811 - Karma: 24
must also look at your internal rate of return and profitability index :) not simply NPV ha but yes i do agree. depending on the tax rate of the investment, investors may or may not invest.
Aug 15 2011 4:18PM
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RudyGarmisch
Posts: 25443 - Karma: 13,844
Its the breadth of the gap in taxation that I'm for changing. I agree, there has to be some incentive to invest money (though some people will continue to invest and stimulate economies thus), but the amount of breaks you get is party responsible for the widening gap between the very rich and the very poor in this country.
Aug 15 2011 4:20PM
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Mike-O
Posts: 14593 - Karma: 1,089
Well, let's say that I make 4500 euros a month (right now), this is already in the higher echelon, as wages in Helsinki bob around the €2200 mark. Now, I get taxed around 23% which leaves me with roughly 3500 euros. Now let's say I rent a flat 20 minutes from the center, a smallish two-room apartment with a small sauna, that would be around 800-1200e per month, so let's go with the thou'.

Now I'm left with about 2200 euros, the average gross income. From that we minus the utilities, phone bill, broadband, home insurance and we're starting to hit the end. Living alone, I spend roughly 60-90e a month on food, but with a paycheck like this I could easily double it to eat healthy and great food.

Now we're looking at approximately 1700-1800e of net income lying in my pocket every month. Multiplied by 12 I'd be looking at about 20,500 euros a year to spend or save after "all expenses paid".

I would live like a king.
Aug 15 2011 4:36PM
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J.D.
Posts: 21362 - Karma: 5,142
It doesn't matter. Half of all capital gains are taxable. Period. That's why the "effective tax rate" on his income is so noticeably lower. That's not a "break". Time was no one even taxed CGs and people still argue (as they should) that it is in large part a tax on inflation. That is how you do it there, how we do it here, how they do it in England and France. No one is even arguing for changing this - Buffet is talking about increasing marginal tax rates after income is calculated not changing the scheme of taxation of investment income. His proposal is pretty radical and is intended to shake people up and turn heads but even so he's not proposing a narrowing gap between tax rates for income sources the way you are because the inevitable result would be total disaster. Make them 100% taxable (thereby evening out the effective tax rate significantly between Buffet and people earning employment income) and watch everyone start incorporating HoldCos in the ass end of Nowheresville, Belarus before they run shit in Delaware.
Aug 15 2011 4:40PM
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Lord.Quasimoto
Posts: 958 - Karma: 33

Well we agree to disagree; I think all opinions should be scrutinized. Doesn't matter if you are the world’s most successful investor or even a Nobel Laureate. Every opinion is valuable and all information should be considered but please be CRITICAL with your ANALYSIS. It shows a lack of brain power when you just accept an opinion based on the persons name/reputation.

Mr. Buffett has his own agenda writing those articles - his agenda has nothing to do with helping the American middle / low class.

Aug 15 2011 4:41PM
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k-rob
Posts: 14217 - Karma: 2,891
i think you underestimate how well kings live.
Aug 15 2011 4:42PM
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Mr.Huck
Posts: 6096 - Karma: 14,896
I agree with Warren in one respect only. He said that the reason his tax rate is lower than his secretary's is because most of his income is from capital gains. That's true, but increasing income tax rates on the wealthy won't change that. Capital gains rate is completely different. It's 15% on long term right now and is set to go back to 20%. I think it should go back to 20%. Capital gains are considered long term if you have owned the asset for over a year. I think that it should be longer than that. Presently, if you sell an asset that you have owned for less than 1 year, the gain is taxed as ordinary income and is subject to your normal income tax rate. If the long term capital gains were extended to 3 years or so it would decrease the volatility of the markets. It would encourage people to invest in companies that they thought were going to be solid for decades instead of just until their next Quarterly report.

If any of you watched 60 minutes last night, the real problem is that GE's tax rate for last year was 3.6%. That's because they have moved their corporate headquarters outside of the U.S. As much as I would like to call bullshit on that, our tax policy is encouraging companies to do this. Our corporate taxrate is 35%, where as the average for other industrial nations is 15%. If we lowered the corporate tax rate to 20%, all of those companies would bring their corporate headquarters back to the U.S. Isn't it better to make 20% on something versus 35% on nothing? American companies are paying 15% income tax to foreign governments and the IRS gets nothing. How does that make sense? Don't think that closing loop holes is going to solve the problem either. As long as to corporate tax rate in the U.S. is that much higher than everyone else's, companies will move their businesses outside of the U.S. to avoid them. That way we not only lose the tax revenue, but we lose the jobs as well.
Aug 15 2011 4:43PM
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Mike-O
Posts: 14593 - Karma: 1,089
Highly plausible. In my own world, I would be royalty. But seriously, I would settle for way, way less. We'll see how it goes.
Aug 15 2011 4:45PM
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J.D.
Posts: 21362 - Karma: 5,142
How the fuck does this work. Personally I pay ~36% tax on employment income and that's before you take out benefit calculations, CPP and EI. If them Fins are only charging 23% tax on a 54,000 EU salary... I'm looking this up I have the EY guide next to me anyway.
Aug 15 2011 4:46PM
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pimpcat
Posts: 858 - Karma: 321
Dude, living off 80k after taxes and supporting a family is rough. you would not be living like a king.
Aug 15 2011 4:48PM
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eheath
Posts: 61603 - Karma: 123,069
Its tough to make the greedy give up some of their wealth. But for real, if people are making multi millions a year, why aren't they giving back to their country? If every billionaire gave 500 million dollars every year to help pay down the countries debt, shit we'd have it paid off in a couple years....
Aug 15 2011 4:49PM
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jeremy.g
Posts: 4931 - Karma: 459
well said mr. buffet.
Aug 15 2011 4:49PM
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J.D.
Posts: 21362 - Karma: 5,142
This is wrong. Increasing marginal rate does affect the rate you pay on your CGs just like everything else. They aren't taxed differently from ordinary income, you just add only half of them. So an increase in marginal rates would also bump up the amount he is taxed on his CGs.

There are other things wrong with your post, i.e. NO ONE other than tax havens has a corporate rate of 15%. Canada is bordering on tax haven territory and ours is 28% give or take certain things. US is on the higher side though.
Aug 15 2011 4:50PM
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Mike-O
Posts: 14593 - Karma: 1,089
If you have a guide handy, by all means, I might be a bit off. I don't know what CPP or EI are, though. By saying around 23%, I of course forgot to mention the... well, the municipal tax and benefit tax and government pension payment, but those are quite miniscule, I assure you. My mother used to pull in just under 4400e a month, so the numbers are quite close to my estimates.
Aug 15 2011 4:55PM
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3mania
Posts: 2613 - Karma: 10,361
20% flat tax rate. For everyone across the board on everything. Cut loopholes, deductions, write offs, marriage, kids, and all special interest bullshit.
Aug 15 2011 4:56PM
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k-rob
Posts: 14217 - Karma: 2,891
if billionaires were dumb enough to give away 500 million dollars a year to pay off the debt, they wouldn't be billionaires, they'd be politicians.
Aug 15 2011 5:03PM
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eheath
Posts: 61603 - Karma: 123,069
If someone became president because they paid off the debt with their own personal money, id be okay with it.
Aug 15 2011 5:05PM
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J.D.
Posts: 21362 - Karma: 5,142

Um no. You aren't even in the ballpark.

Try 46% on average for low to middle income earners (54k EU is above this, so more like 50%). 15-20% local / municipal tax, 21.5% federal tax, 2% health insurance contribution. Not to mention, and this is the worst part, there is a freaking 22% VAT, which isn't even taken into account in the above. That's absurdly high.

Your country imposes one of the harshest personal tax regimes in the world. I seriously have doubts that you have any concept as to the real cost of living.

Aug 15 2011 5:12PM
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k-rob
Posts: 14217 - Karma: 2,891
we all would, but in reality i doubt any of us will ever live long enough to see that debt paid off. unless one of us is immortal or something.
Aug 15 2011 5:14PM
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TheClap.
Posts: 21664 - Karma: 4,140
God your fucking dumb Alek
Aug 15 2011 5:16PM
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Mr.Crunklefruit
Posts: 30 - Karma: 8
my friend lives next door to Warren Buffet
Aug 15 2011 5:19PM
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PurpleDino
Posts: 1513 - Karma: 483
For the record, going to college doesn't necessarily put you a step ahead of others.  It's a common misconception.
Aug 15 2011 5:28PM
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Mike-O
Posts: 14593 - Karma: 1,089
Well, I calculated it again now, with the fabulous Tax Office tax meter.

55000 euros a year would drop me into the 26,2% taxation, to which we add 5,3% for pension insurance, so I would be at 31,5%. As you said, 55000 would be a large income, and as such I would be taxed at 44,5% after I would gain 49700 euros. So the remaining 5300e would be axed almost in half, you are correct, but it would still leave me in a comfort zone on an annual basis.

It's a common tradition here to decline raises, as they may bump you into the highest percentile even by just adding 100e to your monthly pay. It's all a game and we're willing to pay it, let's see what happens with all this goddamn defaulting business.
Aug 15 2011 5:30PM
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tuna.
Posts: 2627 - Karma: 111

just did some quick research, in 2000 the average income of someone who went to college is 20k higher than that of someone who didnt.

Aug 15 2011 5:32PM
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J.D.
Posts: 21362 - Karma: 5,142
This is nothing compared to the 23% VAT. That is the real killer, not the income tax. To put it in perspective your sales tax is almost FIVE TIMES what I pay here. And again I do not live like a king by any means.
Aug 15 2011 5:40PM
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Lax_Bro40
Posts: 5166 - Karma: 18
Because maybe the person that makes multi millions in a year does it because he wants a ferrari and a nice house in PC for winter vacation. he earned it, its his money, let him do what he pleases with it. For the extremely wealthy, yeah tax them a lot, but not half thats robbery.
Aug 15 2011 5:40PM
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Lax_Bro40
Posts: 5166 - Karma: 18
Not true at all. You think someone coming out of University of Utah's business school has the same chance of getting a high paying job as a Boston College alum?
Aug 15 2011 5:42PM
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MrPantyDropper
Posts: 5016 - Karma: 65
thats cause your a fat piece of shit who gets no pussy..


LOL @ UR SWAG EHEATH...no pussy gettin fat douche
Aug 15 2011 5:43PM
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Mike-O
Posts: 14593 - Karma: 1,089
Ah, I see. Well, we get by :) They are lowering it to 19% though starting January 2012. Also, VAT for foodstuffs is only 13%, with fresh produce only at 9%.
Aug 15 2011 5:44PM
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Mike-O
Posts: 14593 - Karma: 1,089
Mind you, I'm not trying to sound like I know everything and all about taxation even in my own country. I'm sure I could get a shitload scratched off/compensated if I took a deeper look into the system, but I don't feel the need to do that as of now. You're obviously knowledgeable on the subject so I'm not trying to say what is what.

Even now with less than half of 4500 "goal", I'm doing fine. Of course, I am once again looking for that significant other to share life's trials and tribulations with....and taxes.
Aug 15 2011 5:50PM
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PurpleDino
Posts: 1513 - Karma: 483
Well in certain cases it does.  But if your career choice doesn't require attending college there is no use in it, if you can be just as successful in your career by not attending college.
Aug 15 2011 5:51PM
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deleted5
Posts: 14507 - Karma: 13,507
well i have 7 people in my family and i lived in westcheter NY the most tax place in the usa http://economix.blogs.nytimes.com/2010/10/04/the-highest-property-tax-burdens-in-america/ and in no way could my fam live on 80 k a year and i have no money for school and my dad is 62 and is no where near retirement so i have no idea what you are talking about.
Aug 15 2011 6:12PM
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tuna.
Posts: 2627 - Karma: 111

there are outliers for everything.

the point is not that you cant succeed unless you go to college, it's that statistically you have a better chance of doing well if you attend college.

Aug 15 2011 6:32PM
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nkmo.
Posts: 3994 - Karma: 285
Living within your means? Not having 7 kids, not living somewhere you can't afford...
Aug 15 2011 6:33PM
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Campeador
Posts: 7516 - Karma: -1,227
Wrong.

Seeing how there's about 403-412 billionaires in the US, taking the higher number (and your logic), in two years of stealing 500 million from each billionaire we've accumulated a grand total of...

drumroll

206 billion dollars!

That wouldn't even balance the budget for one year. I'm sure your computer has a calculator, try using it next time.
Aug 15 2011 6:33PM
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Campeador
Posts: 7516 - Karma: -1,227
Actually the above calculation is for one  year. For two years it would be 412 billion, which still does not even scratch the surface.
Aug 15 2011 6:35PM
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deleted5
Posts: 14507 - Karma: 13,507
5 kids 2 parents not 7
Aug 15 2011 6:36PM
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*Dos*Planker*
Posts: 2983 - Karma: 168
finally a rich person with a shred of sanity
Aug 15 2011 6:39PM
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nkmo.
Posts: 3994 - Karma: 285
Same difference.
Aug 15 2011 6:45PM
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geteducated
Posts: 6410 - Karma: 86
it certainly helps. but if you're from u of u and a social retard vs a boston college grad that can relate to people then the college grad will be taken.

Aug 15 2011 6:56PM
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eheath
Posts: 61603 - Karma: 123,069
yeah, i dunno why i thought that was enough. i guess it would take much longer, maybe give it 30 years and then it would be 3 tril but who knows how much the debt would go up by then...

Its not realistic at all and it will never happen, i was just speaking thoughts ive had before. its obviously gonna take alot to even just reduce our countries debt, let alone eliminate it.
Aug 15 2011 7:26PM
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Rachy
Posts: 4355 - Karma: 2,761
Your parents made the choice to stay in Westcheter NY and unless your parents had a kid and then quadruplets, that was their choice to have 5 kids. If you can't afford more than 1 kid, you shouldn't have more than 1 kid. If your profession only exists in 1 county, then maybe it's time to look for a new profession.

In regards to the NY comment from before.... Ummm..... 80k a year in NYC is plenty. In the summer I pay around $1100 a month to have my bedroom and keep a car. That doesn't include the cost of gas which is probably around the cost someone in NYC pays for public transit. I do pretty damn good on my less than 24k a year income. I'm happy with less than 20k a year (take home) cause I Ski a lot and I am having a TON of fun with my life and still get to do a lot of volunteer work and help people out and so forth. And I still manage to pay off my student loans, slowly, but it's happening. Would I have a kid on that, NO. But I'm pretty sure that if I can afford to live Downtown in the 3rd most expensive City in the US on less than 20k a year, a person can live comfortably on 80k a year in NYC.


In regards to being raised on less than 40k a year. My parents were fucking good with money. Mom and Stepdad lived in a 2 bedroom apartment with my sister and I for 4 years while saving money for a down payment on a house. Got a very affordable mortgage and bought a 3 bedroom 2 bathroom house in a fantastic neighborhood. My stepdad has been with the company around 20 years, my mom has been for 12 years. My step dad got 200k in stocks in the company when he hit 10 years at the company, mom got the same 200k... took my stepdads and hired a stock fellow and invested it elsewhere. So they now have over 800k in stocks(that are still doing ok, not growing right now, but ok), sold their house for 150K, bought a foreclosed house at 58k, and they still have about 10 years before my mom retires where they can continue investing and so forth. They are looking to purchase a second foreclosed home at the moment. My stepdad makes 13 an hour and my mom makes 15 an hour. But life is good.

Take note, life is great when you live within your means, even if you dont make much.
Aug 15 2011 7:49PM
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casual
Posts: 6712 - Karma: 6,748
Know how I know you're an angst filled teen?
Aug 15 2011 7:54PM
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panojibber
Posts: 3382 - Karma: 216
If you don't borrow the money to pay for that house, don't send your kids out of the country for college, and go camping twice a year that should be enough. And if your lazy whore of a wife doesn't work, kick her the fuck out.

I mean how can you defend anyone in this tax bracket? If they get taxed 50% they're still bringing in 125k which is a stupid amount of money. I'll probably never in my life make 250k, even if I go to grad school.

The only motivation anyone could have for not taxing the rich is greed.
Aug 15 2011 8:05PM
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john.stossel
Posts: 943 - Karma: 5
ya but
Aug 15 2011 8:21PM
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