Warren Buffett
I have heard Warren Buffett claim on occassion that he is not taxed enough. However, now the crazy old coot has put it in writing in The New York Times for all to see his ignorance.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
Oh, where to begin!
Buffett is comparing apples to oranges when he compares his tax burden, based on capital gains, to the tax burden of his employees, based on earnings. For example, dividends and capital gains are both forms of double taxation, so he is being less than honest when he says he pays less, percentage-wise, in federal taxes. He also ignores the high corporate tax rate and the huge, punitive death tax.
Also, his characterization of the payroll tax is absurd. He is not forced to pay a heavy burden in payroll taxes because if he did, then Social Security would have to pay him huge returns when he retires. Payroll taxes are capped for the very reason of avoiding a huge retirement payout to the wealthy.
In the end, if all the taxes were calculated appropriately, I am certain that Buffett pays significantly more in federal taxes than those who work for him.
Besides, if Mr. Buffett does not think he his paying enough in taxes, hecould simply give more of his money to the federal government. There is nothing stopping him. In fact, there is a website where people can voluntarily pay extra money to the federal government.
The reality is, the “super-rich” do foot the majority of the taxes in this country, as I have pointed out before.
According to the IRS, in 2008, the top 1 percent of tax returns paid 38 percent of all federal individual income taxes and earned 20 percent of adjusted gross income, compared to 2007 when those figures were 40.4 percent and 22.8 percent, respectively.
The IRS also points out that during 2007, the top 1 percent had actually paid more in federal income tax than the bottom 95 percent.
So, while the top 1 percent earned 2o percent of all income that same group paid 38 percent of all federal income taxes, more than the bottom 95 percent.
In fact, Buffett’s call for higher taxes is nothing more than self-serving claptrap.
As Timothy P. Carney has pointed out several times, Buffett advocates for a higher death tax and then buys estates from people who don’t have enough money to pay the tax bill. He also owns businesses that rely on a complicated death tax in order to sell estate-planning services. Buffett also made about a billion dollars off of the Wall Street bailout by investing in Goldman Sachs on the assumption Uncle Sam would bail it out. He also is planning investments in ethanol giant ADM and government-contracting leviathan General Dynamics.
In the end, the solution is not higher taxes, as Buffett and liberals want, but a fairer tax code, perhaps a simple flat tax that eliminates double taxation and complicated tax shelters and deductions so we can all be sure that the rich and poor alike are paying the appropriate amount and also eliminating a large part of this class warfare in which the left like to engage.
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Crazy old coot?
LOL! Over the top?
I’m not sure how else to characterize someone who wants to pay more taxes.
If he wants to pay more taxes, there’s an easy way for him to do it. Direct his accountants to write a check. I don’t know why he feels the govt needs to compel him and others.
Exactly. I even included a link to the government website that allows donations to the government.
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I don’t understand why this is unreasonable… he sees that US gov’t stability is critical to long-term economic success (which his company needs to continue to be profitable), and he believes that the super-rich should “not be coddled” as the current tax rates do (compared to the merely rich and upper middle class I assume).
Now keep in mind what Buffett does not say. He doesn’t say tax only the rich. He doesn’t say don’t tax everyone. However, he points out that the a very popular talking point – higher taxes stop the wealthy from investing – is ridiculous. In Buffett’s experience, if there is money to be made, they will invest. Period.
We can also imply that the tax rate could be too high and the returns wouldn’t be sufficient to justify the risk… but what rate is that at? Buffett claims 40%, the highest he has seen (on capital gains I am guessing), was not a deterrent. It is also worth pointing out that increasing capital gains taxes (which I think is what he is addressing) will decrease the amount of risk that investors are willing to take on for a given return rate. This may encourage investors not to invest as highly in the high-risk ventures that have led to bubble after bubble over the past decade or so.
Saying “Buffett can donate to the US gov’t” misses the entire point. 100% of Buffett’s money cannot cure the government’s ails. He is trying to do the same thing that Thomas did a couple months ago when he pointed out that the military budget, something Thomas believes is important, will need to be slashed for the nation’s long-term fiscal health – he is saying the super-rich will also need to give up some of their excellent tax benefits, which he directly benefits from, to help secure the nation’s long-term fiscal health. I would term this the act of a quality US citizen, not the act of a crazy old coot.
To Tom’s article points:
- I fully agree that the best solution is a much simplified tax code. Everything after this is just details
- Why does the double-taxation matter is everyone is subject to it? I suppose the rate of double-taxation may vary with income types, but Buffett can’t express it any better for the average person than he does in terms of raw numbers and percentage of total income (this may be a failure with the average person, but Buffett knows his audience, and it is not you and me).
- Equating rich vs poor as percentages of the population are not useful numbers (except for politicians). Expressing tax paid in terms of total income of [population segment] is a bit better. It still shows that the rich pay a lot, but it puts it in dollar-to-dollar terms, not dollar-to-tax payer terms which don’t reflect the vast difference in gross income for each tax payer
- If Buffett actively advocates from policies that he or his company actively benefit from, how does this make him different from anyone else who interacts with the government? Best I can tell, the only difference is he also values the economic long-term stability of the nation, which is something that benefits nearly all of us, so I don’t understand why your first response is to call it ridiculous
You paid how much in taxes?! No wonder you are a Republican and support their ideas about cutting social and medical programs for the poor. Anyone can draw a graf and make the numbers whatever they want such as you did in another post That does not make it true. Republicans were against the minimum wage increase. Maybe that’s why the lower 20 or 40 per cent of Americans don’t pay income taxes. It’s because millionaire business owners don’t want to pay them a living wage. You can’t tax nothing.
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