OT Stop Coddling the Super-Rich
Matthew Kruk
August 14, 2011
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.
Kathi
wrote:
>http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=2
>
>August 14, 2011
>Stop Coddling the Super-Rich
>By WARREN E. BUFFETT
>Omaha
<snip>
I liked what he wrote. I'm already married, so my husband said he'd
encourage mistressing as my new career.
piks11
> http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-ric...
>
> August 14, 2011
> 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.
<snip balance of Buffett Bull>
Warren Buffett annoys me. He has annoyed me for a good long time.
He's billionaire who constantly complains about how he isn’t allowed
to participate in Obama’s “shared sacrifice” with fellow citizens and
how his secretary pays more income tax than he does. I'm ok with him
setting his army of lawyers and lobbyist loose on the government to
lobby for tax increases if that's his want. But enough of his
constant whining about his secretary and how he is being "coddled" by
the IRS.
I'm quite sure that whatever tax Mr. Buffett pays was negotiated with
government agencies by his highly paid staff of tax accountants,
lawyers, and lobbyists. I don’t imagine tax loopholes at this level
at are just happened upon. Surely Buffett’s tax loopholes must be
legal and approved for him by your government. If this isn't what Mr.
Buffett wants he could fire his cadre of tax reduction employees and
use Turbo Tax just like our Secretary of the Treasury once did
[falsely I'm told].
But back to Mr. Buffett’s problem of being “coddled” by the government
and prevented from joining in a “shared sacrifice” with his fellow
citizens. There is a simple solution to this problem. I’m surprised
Mr. Buffett hasn’t discovered it or his people haven’t called his
attention to it. And it isn't just a provision for billionaires. Any
citizen who feels under taxed no longer has to whine about it. They
may also take advantage of this provision. All one has to do is this:
http://www.fms.treas.gov/faq/moretopics_gifts.html
Citizens who wish to make a general donation to the U.S. government
may send contributions to a specific account called “Gifts to the
United States.” This account was established in 1843 to accept gifts,
such as bequests, from individuals wishing to express their patriotism
to the United States. Money deposited into this account is for general
use by the federal government and can be available for budget needs.
These contributions are considered an unconditional gift to the
government. Financial gifts can be made by check or money order
payable to the United States Treasury and mailed to the address below.
Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782
Brian
wrote:
>http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=2
>
>August 14, 2011
>Stop Coddling the Super-Rich
>By WARREN E. BUFFETT
>Omaha
>
>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.
He must be paying his employees very well. He could choose to draw a
salary but he elects to take capital gains instead. And of course
anyone can send in additional contributions.
J.D. Baldwin
In the previous article, piks11 <pik...@live.com> wrote:
> Warren Buffett annoys me. He has annoyed me for a good long time.
What you said.
> He's billionaire who constantly complains about how he isn't allowed
> to participate in Obama's "shared sacrifice" with fellow citizens
> and how his secretary pays more income tax than he does. I'm ok
> with him setting his army of lawyers and lobbyist loose on the
> government to lobby for tax increases if that's his want. But
> enough of his constant whining about his secretary and how he is
> being "coddled" by the IRS.
You're not reading deeply enough here. His shilling for Obama's
desire for across-the-board tax increases for "the rich" (and I assure
you, you and I are "the rich" in this scheme) *is* part of his
lobbying for political favors. You don't think this stuff just
happens, do you?
--
_+_ From the catapult of |If anyone objects to any statement I make, I am
_|70|___:)=}- J.D. Baldwin |quite prepared not only to retract it, but also
\ / bal...@panix.com|to deny under oath that I ever made it.-T. Lehrer
***~~~~----------------------------------------------------------------------
piks11
wrote:
> In the previous article, piks11 <pik...@live.com> wrote:
>
> > Warren Buffett annoys me. He has annoyed me for a good long time.
>
> What you said.
>
> > He's billionaire who constantly complains about how he isn't allowed
> > to participate in Obama's "shared sacrifice" with fellow citizens
> > and how his secretary pays more income tax than he does. I'm ok
> > with him setting his army of lawyers and lobbyist loose on the
> > government to lobby for tax increases if that's his want. But
> > enough of his constant whining about his secretary and how he is
> > being "coddled" by the IRS.
>
> You're not reading deeply enough here. His shilling for Obama's
> desire for across-the-board tax increases for "the rich" (and I assure
> you, you and I are "the rich" in this scheme) *is* part of his
> lobbying for political favors. You don't think this stuff just
> happens, do you?
> --
You are exactly right. It's just that of all those shilling for
Obama's tax increases I find Buffett the most annoying.
Those who pay 0 income tax, now about 50% of the filers, should STFU
about how tax dollars are spent. They have no skin in the game as
Obama likes to say. Those complaining that they aren't taxed enough
should STFU and write a check to the treasury. Of course they won't
because they are shilling for Obama and whatever that brings them.