Check out what Warren Buffett thinks!

[abelisle]

Stop Coddling the Super-Rich

By WARREN E. BUFFETT

Omaha

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

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.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

[bonnie]

So what is stopping him from writing a very big check? Maybe actually putting his money where his mouth is gets to be more than he actually wants to pay.

[phkrause]

excellent article

[LifeHiscost]

So what is stopping him from writing a very big check? Maybe actually putting his money where his mouth is gets to be more than he actually wants to pay.

As a one person contributor, I would suggest the revelation made is worth more than anything he could have chosen to give. And I would also like to suggest he gives enough in philanthropic enterprises to put most of us to shame.

God blesses!

[bonnie]

Originally Posted By: bonnie

So what is stopping him from writing a very big check? Maybe actually putting his money where his mouth is gets to be more than he actually wants to pay.

As a one person contributor, I would suggest the revelation made is worth more than anything he could have chosen to give. And I would also like to suggest he gives enough in philanthropic enterprises to put most of us to shame.

God blesses!

How much he gave to philanthropic enterprises or paid in taxes is immaterial

He is the one to complain he was being coddled and that he should pay more,so go for it.

He is free to give as much as he wants,no one is stopping him.

[John317]

...He is the one to complain he was being coddled and that he should pay more,so go for it.

He is free to give as much as he wants,no one is stopping him.

You have a good point. It makes no sense for him to volunteer for others to be taxed more when he himself can give as much as he wants. He should go for it-- give half of his income, if he likes, but he's clearly wrong to urge the government to take more money away from the people when the government hasn't learned how to spend properly what they already took.

The government is not going to learn how to spend with greater wisdom and discipline if they can get all the money they want in order to keep the government and politicians from experiencing any pain.

Since when has the Federal government gotten wiser and smarter about how to spend our money? If it's ever happened, I've never seen it. In fact, the truth is that in the last few years, our government has taken on more debt than it can possibly pay for, at least in my lifetime and probably even in my childrens' or my grandchildrens'.

Doubtless Buffett wrote this little piece because he supports the wise, well-laid plans of Obama-- once he finds any, that is.

[bonnie]

Originally Posted By: bonnie

...He is the one to complain he was being coddled and that he should pay more,so go for it.

He is free to give as much as he wants,no one is stopping him.

You have a good point. It makes no sense for him to volunteer for others to be taxed more when he himself can give as much as he wants. He should go for it-- give half of his income, if he likes, but he's clearly wrong to urge the government to take more money away from the people when the government hasn't learned how to spend properly what they already took.

The government is not going to learn how to spend with greater wisdom and discipline if they can get all the money they want in order to keep the government and politicians from experiencing any pain.

Since when has the Federal government gotten wiser and smarter about how to spend our money? If it's ever happened, I've never seen it. In fact, the truth is that in the last few years, our government has taken on more debt than it can possibly pay for, at least in my lifetime and probably even in my childrens' or my grandchildrens'.

Doubtless Buffett wrote this little piece because he supports the wise, well-laid plans of Obama-- once he finds any, that is.

If he feels so strongly about it,why is he taking any legit deductions.Declare all profit and pay accordingly.Or maybe he could decide to live on a paltry 5 million a year.Just think of all the children he could feed and educate.

Regardless of how much he has it is not anyone else's place to determine what he should give.Maybe he shouls stop blowing his hot air and quit trying to tell everyone else.

[Guest]

I agree with Bonnie. A bunch of hot air, with bad breath mixed in. Liberals always want to tell US how to live, but they NEVER think any of it should apply to them.

[bonnie]

Does anyone know how to spell hypocrisy? Democrat??

“Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years”

By Bill Wilson — The Obama Administration has turned to billionaire Warren Buffett, chairman and chief executive of financial giant Berkshire Hathaway, to make the case for raising taxes on the rich because, says Buffett, he can afford it. On Aug. 22, the White House reportedly chatted with Wall Street’s most famous investor to get his thoughts about the sputtering economy.

What likely got the Administration’s attention was Buffett’s oped in The New York Times. Buffett proposed that “It’s time for our government to get serious about shared sacrifice.” He implied he would like to see the capital gains be treated equally as income.

To wit, he wrote of the so-called “super-rich,” which he apparently defines as households earning $1 million or more a year: “Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.” Isn’t that nice of Mr. Buffett?

But if he were truly sincere, perhaps he might simply try paying the taxes the Internal Revenue Service (IRS) says his company owes? According to Berkshire Hathaway’s own annual report — see Note 15 on pp. 54-56 — the company has been in a years-long dispute over its federal tax bills.

According to the report, “We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (‘IRS’) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “The company has been short-changing the tax collection agency for much of the past decade. Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years.”

Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch. Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.

McCarty explained, “The rough translation of the report is that Berkshire Hathaway did not pay all the federal taxes that it was required to for 2002 through 2004. The IRS examination team caught Berkshire Hathaway on at least some issues. Instead of paying up, Berkshire Hathaway is threatening the IRS with protracted litigation and is in the process of cutting a deal with the IRS Appeals office.”

He continued, “For 2005 and 2006, Berkshire Hathaway again did not pay all the federal taxes that it was required to. Again, the IRS examination team caught Berkshire Hathaway on at least some issues. Now, Berkshire Hathaway is again threatening the IRS with protracted litigation and is trying to cut a deal with the IRS Appeals office.”

McCarty concluded, “And, finally, the IRS has opened another examination of Berkshire Hathaway’s tax returns for 2007 through 2009, but has not officially sent Berkshire Hathaway the bill yet for taxes that Berkshire Hathaway failed to pay for those years. One would expect they will find yet more issues.”

Now, most Americans, when they receive a tax bill from the government, they pay it. They don’t get an attorney. They don’t appeal the bill. They pay it — on time and in full. But not Buffett’s company, which apparently takes years to settle its liabilities.

Since this appears to be an ongoing pattern at the company, it becomes reasonable to ask: Is this some sort of internal company policy to delay paying taxes on time? If so, could this be construed as a form of tax evasion?

Interesting questions for the man who professes to want to pay more to Uncle Sam, and who sees fit to raise the burden on all job creators — except for perhaps his company — despite the longest period of sustained high unemployment since the Great Depression.

As Mr. Buffett has seen fit to enter the political arena, in the interests of full disclosure, the American people should be alerted to his own taxing hypocrisy. Reporters should ask him, “If you’re so interested in paying more in taxes, why doesn’t your company settle its tax bills from the past decade now?”

Then they might ask him about the pot and the kettle as a follow-up.

[phkrause]

And there has never been a Republican President that has not said something about a Democrat and than did the same thing?? Unreal, absolutely unreal.

[bonnie]

And there has never been a Republican President that has not said something about a Democrat and than did the same thing?? Unreal, absolutely unreal.

This is not about a democrat president,altho Buffett seems to have a large influence or thinks he does with the current democratic president.

This is about a democrat flashing his wealth and influence.

At the time Buffett made this rather silly statement to prove how generous and patriotic he is,he his using his wealth thru a battery of high priced attorney's to get out of the high taxes he is claiming to want.

Sure cure for his feeling of being coddled and a lot more honest would be as a "democrat" to pay his "fair share" or shut his mouth.

So yes,in this hypocrsy is spelled "democrat"

The same goes for any republican that does this