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Agreed. He's not trying to "make a donation", he's saying that everyone should share the burden - including himself and people like him. It's not just that the

Agreed. He's not trying to "make a donation", he's saying that everyone should share the burden - including himself and people like him. It's not just that the rich kids should pay for the park, it's that everyone but the rich kids are being asked to pay some extra.

gaius 15y ago
Does Mr Buffett employ an accountant to do his taxes? Does said accountant employ any tax avoidance strategies?
- epscylonb 15y ago
  Wouldn't you if you had tons of money?, especially if all the other "rich kids" are doing the same?. If you expect people to always do the altruistic thing then be prepared for a life full of disappointment. The best you can do is try to shape peoples behavior. Personally I would prefer a flat percentage rate of tax with an exception for very low incomes where it just isn't worth the governments time trying to collect it. This would probably raise most peoples tax and lower rich peoples tax but I believe it is "fairer" for everybody to pay the same fixed proportion of their income. At the same time though I would simplify business taxes as well, get rid of loopholes, stop companies that do business in a country off shoring their profits. It is insane that some companies view their accounting departments as profit centers. Flat tax economies boom, and they are progressive in the sense that there is no penalty for trying to earn more money.
  - seabee 15y ago
    > a flat percentage rate of tax with an exception for very low incomes That's not a flat tax, then, is it? It's progressive with two bands, 0% and x%. There is a real case for tax simplification, but the progressive nature of income tax is probably the simplest thing in the entire tax code! It's the classification of different kinds of income and capital gains, exemptions and penalties for particular uses of money/assets that makes it challenging and is the reason there is real money in tax avoidance. Don't throw out the baby with the bath water. Finally, a progressive tax means higher earners pay a larger proportion of their income than lower earners. It's hard to gauge the validity of your argument when your assertions run contrary to the definitions of the words you use.
    - epscylonb 15y ago
      The reason I put fairer in quotes is because it is a term that can be argued over. Yes two bands, with the focus on making it attractive for people to earn money and pay tax, ideally the 0% band would be just enough to clothe, feed yourself and pay rent in a bad neighbourhood. Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. As I said a flat tax is economically progressive because it doesn't discourage people from trying to earn more money. At the moment you have people buying houses they don't need or using complex financial instruments just to do something with their money because if they don't they will get taxed more. Investing this money for the sake of it is not always beneficial to the economy or society, I favour a persons right to choose what to do with their own money. I am coming from this from a libertarian perspective, whether you earn 50k a year or 500k the government should not be taking a higher percentage from you than other people. Especially considering that with a percentage rate whilst the proportion is the same, the actual amount of tax high earners pay is greater (which is socially progressive enough for me, but perhaps not for you). I believe I am using the word proportion correctly here, but if not please feel free to let me know how I have got it wrong. Here in the UK the top rate of tax is 50%. I doubt I will ever be taxed at that rate but the government taking half a persons income scares me a little, no wonder people try to move their money around so the taxman can't get at it.
      - ZachPruckowski 15y ago
        >Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. "Progressive" has a very specific meaning when you're discussing tax structure, independent of its political meaning. Specifically, a progressive tax is one in which the effective rate you pay rises with income.
        gaius 15y ago
        It's a word that has been at best deliberately overloaded, and at worst hijacked. Who would want to stand in the way of "progress"? It could equally well mean, the more you earn they more you get to keep.
- sp332 15y ago
  Buffet famously said that his receptionists paid a higher tax rate than he did. http://www.timesonline.co.uk/tol/money/tax/article1996735.ece http://www.timesonline.co.uk/tol/money/tax/article1996735.ec...
  - camiller 15y ago
    Buffet's receptionists should get a good tax guy. With the availability of tax breaks for even middle class income ranges there is no reason his receptionists should be paying more.
- HSO 15y ago
  From his biography ("The Snowball"): "He did the bookkeeping himself and prepared his own tax returns. With its numbers, accuracy, and the measuring of results, the recordkeeping aspect of the job pleased him." [...] "Warren was still handling all the money and doing all the clerical work himself: filing the tax returns,..." [...] "'Bill started trying to convince me to get a computer. I said, I don’t know what it’s going to do for me. I don’t care how my stock portfolio is doing every five minutes. And I can do my income taxes in my head.'" Seems like indeed he is doing them himself (his personal tax bill; to do it for Berkshire, they surely have hired help)
- cromulent 15y ago
  I don't know, but I would assume so. I think most people try to pay the minimum tax they are required to, and I guess that includes Mr Buffet. However, that's not the point. He's not saying "I want to personally pay more tax", he's saying "Why are people like me not being required to pay the same percentage tax as middle-income earners"?
  - jterce 15y ago
    Do you realize that the "same percentage tax as middle-income earners" would be LOWER than what they currently pay? http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Year_2011_income_brackets_and_tax_rates http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...
    - dbingham 15y ago
      Only if you take into account the marginal rates and ignore the many, many breaks and loopholes.
      - camiller 15y ago
        OK, what about the many "breaks and loopholes." for the other tax brackets? I'm in the 25% bracket (Married filing jointly, $68,001 - $137,300) and I paid under 6% effective rate for each of the last few years.
    - cpeterso 15y ago
      Buffet is not talking about income tax. He's talking about capital gains taxes, since most wealthy people are making money from investments, not paychecks.
- JabavuAdams 15y ago
  That's not the least bit relevant. It's almost a category error. Buffet's talking about setting the rules of the game, not about optimizing within the rules that have been set.
  - gaius 15y ago
    Of course it's relevant. At his level, he can pay however much tax he wants, anywhere in the world, and this will always be the case. What he's calling for is other people paying more tax.
    - JabavuAdams 15y ago
      Other people with incomes of more than $1 million. Would you have the same problem if that were $10 million, instead?
      - gaius 15y ago
        Why not $100,000? That's a lot of money too.
        JabavuAdams 15y ago
        The amount matters. At $100k I can't buy a nice house with 1 year's income, but at $10M I clearly can. What was the point of your response, anyway? Please elaborate.
    - krschultz 15y ago
      You fundamentally miss his point. Even without finding a thousand loopholes to get out of his taxes, he will pay a lower percentage just based on HOW he makes his money. 1) The payroll tax is capped, so a guy making exactly the income it is capped at, and a guy making 100x that, pay exactly the same payroll tax. No accountant required and it is an enormous difference. For Warren, that is millions of dollars right there. 2) Money made from investments is taxed at a lower rate than salary, EVEN IF INVESTING IS YOUR JOB. I personally believe that money you have paid taxes on before should never have capital gains taxes on it - basically you are getting taxed twice. If I choose to take my money and invest it and then buy a car later I pay more tax than a guy who just takes his money and buys a car. So i'm not fan of capital gains taxes. But a guy who gets paid by investing and has no other income should be paying income taxes, not capital gains taxes. How you distinguish the two is definitely hard, but smarter people than me can figure out a way to make that happen.
- polshaw 15y ago
  He certainly doesn't employ all the tax avoidance strategies available to him.. implied here[1]. But lets not forget, he has to act in the interests of shareholders, not just himself, in his business interests. 1. http://www.youtube.com/watch?v=iVOwaMWewGY&t=2m34s http://www.youtube.com/watch?v=iVOwaMWewGY&t=2m34s
- onemoreact 15y ago
  He does not need to do anything unusual to avoid paying taxes because the law is setup to give him such a low rate. One of my aunts was once audited by the IRS who is not going to do anything creative to help people out. Net result, her rebate was close to 1 million. She had a fairly competent Accountant and good records but several minor rules helped her out.

gaius 15y ago

Does Mr Buffett employ an accountant to do his taxes? Does said accountant employ any tax avoidance strategies?

epscylonb 15y ago
Wouldn't you if you had tons of money?, especially if all the other "rich kids" are doing the same?. If you expect people to always do the altruistic thing then be prepared for a life full of disappointment. The best you can do is try to shape peoples behavior. Personally I would prefer a flat percentage rate of tax with an exception for very low incomes where it just isn't worth the governments time trying to collect it. This would probably raise most peoples tax and lower rich peoples tax but I believe it is "fairer" for everybody to pay the same fixed proportion of their income. At the same time though I would simplify business taxes as well, get rid of loopholes, stop companies that do business in a country off shoring their profits. It is insane that some companies view their accounting departments as profit centers. Flat tax economies boom, and they are progressive in the sense that there is no penalty for trying to earn more money.
- seabee 15y ago
  > a flat percentage rate of tax with an exception for very low incomes That's not a flat tax, then, is it? It's progressive with two bands, 0% and x%. There is a real case for tax simplification, but the progressive nature of income tax is probably the simplest thing in the entire tax code! It's the classification of different kinds of income and capital gains, exemptions and penalties for particular uses of money/assets that makes it challenging and is the reason there is real money in tax avoidance. Don't throw out the baby with the bath water. Finally, a progressive tax means higher earners pay a larger proportion of their income than lower earners. It's hard to gauge the validity of your argument when your assertions run contrary to the definitions of the words you use.
  - epscylonb 15y ago
    The reason I put fairer in quotes is because it is a term that can be argued over. Yes two bands, with the focus on making it attractive for people to earn money and pay tax, ideally the 0% band would be just enough to clothe, feed yourself and pay rent in a bad neighbourhood. Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. As I said a flat tax is economically progressive because it doesn't discourage people from trying to earn more money. At the moment you have people buying houses they don't need or using complex financial instruments just to do something with their money because if they don't they will get taxed more. Investing this money for the sake of it is not always beneficial to the economy or society, I favour a persons right to choose what to do with their own money. I am coming from this from a libertarian perspective, whether you earn 50k a year or 500k the government should not be taking a higher percentage from you than other people. Especially considering that with a percentage rate whilst the proportion is the same, the actual amount of tax high earners pay is greater (which is socially progressive enough for me, but perhaps not for you). I believe I am using the word proportion correctly here, but if not please feel free to let me know how I have got it wrong. Here in the UK the top rate of tax is 50%. I doubt I will ever be taxed at that rate but the government taking half a persons income scares me a little, no wonder people try to move their money around so the taxman can't get at it.
    - ZachPruckowski 15y ago
      >Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. "Progressive" has a very specific meaning when you're discussing tax structure, independent of its political meaning. Specifically, a progressive tax is one in which the effective rate you pay rises with income.
      - gaius 15y ago
        It's a word that has been at best deliberately overloaded, and at worst hijacked. Who would want to stand in the way of "progress"? It could equally well mean, the more you earn they more you get to keep.
sp332 15y ago
Buffet famously said that his receptionists paid a higher tax rate than he did. http://www.timesonline.co.uk/tol/money/tax/article1996735.ece http://www.timesonline.co.uk/tol/money/tax/article1996735.ec...
- camiller 15y ago
  Buffet's receptionists should get a good tax guy. With the availability of tax breaks for even middle class income ranges there is no reason his receptionists should be paying more.
HSO 15y ago
From his biography ("The Snowball"): "He did the bookkeeping himself and prepared his own tax returns. With its numbers, accuracy, and the measuring of results, the recordkeeping aspect of the job pleased him." [...] "Warren was still handling all the money and doing all the clerical work himself: filing the tax returns,..." [...] "'Bill started trying to convince me to get a computer. I said, I don’t know what it’s going to do for me. I don’t care how my stock portfolio is doing every five minutes. And I can do my income taxes in my head.'" Seems like indeed he is doing them himself (his personal tax bill; to do it for Berkshire, they surely have hired help)
cromulent 15y ago
I don't know, but I would assume so. I think most people try to pay the minimum tax they are required to, and I guess that includes Mr Buffet. However, that's not the point. He's not saying "I want to personally pay more tax", he's saying "Why are people like me not being required to pay the same percentage tax as middle-income earners"?
- jterce 15y ago
  Do you realize that the "same percentage tax as middle-income earners" would be LOWER than what they currently pay? http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Year_2011_income_brackets_and_tax_rates http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...
  - dbingham 15y ago
    Only if you take into account the marginal rates and ignore the many, many breaks and loopholes.
    - camiller 15y ago
      OK, what about the many "breaks and loopholes." for the other tax brackets? I'm in the 25% bracket (Married filing jointly, $68,001 - $137,300) and I paid under 6% effective rate for each of the last few years.
  - cpeterso 15y ago
    Buffet is not talking about income tax. He's talking about capital gains taxes, since most wealthy people are making money from investments, not paychecks.
JabavuAdams 15y ago
That's not the least bit relevant. It's almost a category error. Buffet's talking about setting the rules of the game, not about optimizing within the rules that have been set.
- gaius 15y ago
  Of course it's relevant. At his level, he can pay however much tax he wants, anywhere in the world, and this will always be the case. What he's calling for is other people paying more tax.
  - JabavuAdams 15y ago
    Other people with incomes of more than $1 million. Would you have the same problem if that were $10 million, instead?
    - gaius 15y ago
      Why not $100,000? That's a lot of money too.
      - JabavuAdams 15y ago
        The amount matters. At $100k I can't buy a nice house with 1 year's income, but at $10M I clearly can. What was the point of your response, anyway? Please elaborate.
  - krschultz 15y ago
    You fundamentally miss his point. Even without finding a thousand loopholes to get out of his taxes, he will pay a lower percentage just based on HOW he makes his money. 1) The payroll tax is capped, so a guy making exactly the income it is capped at, and a guy making 100x that, pay exactly the same payroll tax. No accountant required and it is an enormous difference. For Warren, that is millions of dollars right there. 2) Money made from investments is taxed at a lower rate than salary, EVEN IF INVESTING IS YOUR JOB. I personally believe that money you have paid taxes on before should never have capital gains taxes on it - basically you are getting taxed twice. If I choose to take my money and invest it and then buy a car later I pay more tax than a guy who just takes his money and buys a car. So i'm not fan of capital gains taxes. But a guy who gets paid by investing and has no other income should be paying income taxes, not capital gains taxes. How you distinguish the two is definitely hard, but smarter people than me can figure out a way to make that happen.
polshaw 15y ago
He certainly doesn't employ all the tax avoidance strategies available to him.. implied here[1]. But lets not forget, he has to act in the interests of shareholders, not just himself, in his business interests. 1. http://www.youtube.com/watch?v=iVOwaMWewGY&t=2m34s http://www.youtube.com/watch?v=iVOwaMWewGY&t=2m34s
onemoreact 15y ago
He does not need to do anything unusual to avoid paying taxes because the law is setup to give him such a low rate. One of my aunts was once audited by the IRS who is not going to do anything creative to help people out. Net result, her rebate was close to 1 million. She had a fairly competent Accountant and good records but several minor rules helped her out.