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Another rich guy telling those not as lucky as him how lucky we are. Oh, and btw, pay your taxes.

mattmaroon 17y ago
That's dismissive of his very valid points. Buffet is one of the most selfless rich guys of all time. Also one of the most infamously direct and honest. He's not saying that as part of some sort of Orwellian consipiracy to quell the masses. He's saying that because its true. He points out regularly injustices such as the fact that his secretary pays a higher tax rate than he does, thanks to the ridiculous capital gains laws in this country. He points out regularly that people like him should have to pay higher taxes, including the estate tax. He lives less lavishly than most people who have .1% of his wealth. He's already given most of his fortune (the largest single donation ever) to charity and will give the rest when he goes. He's a real-life Robinhood.
- deleted 17y ago
  [deleted]
- byrneseyeview 17y ago
  He points out regularly injustices such as the fact that his secretary pays a higher tax rate than he does, thanks to the ridiculous capital gains laws in this country. Corporate tax rates plus capital gains tax rates exceed normal income tax rates. The only way you can claim that he pays less in taxes on selling stock is if you assume that the company's profits -- the sum of which, discounted to the present, is the value of the stock -- somehow don't affect the value of the stock. If we cut capital gains taxes to zero and added an equivalent amount to corporate profits (say, a 40% annual tax rate instead of 35%), the government would make an equivalent amount of money from the same economic activity, and Buffett's theoretical tax rate would go down. Similarly, if corporate income taxes were zero and his capital gains were taxed at 40%, he'd pay much more than his secretary, but the government would collect the same amount. If the strength of his argument is independent of the magnitude of the problem he's arguing against, there is a flaw there. Buffett is an admirable guy. But the line about his secretary is a rhetorical flourish, nothing more.
  - mattmaroon 17y ago
    They're his words (paraphrased) not mine, and it is impossible Buffet is unaware of corporate tax. My guess is its more than rhetorical flourish too since he's not known for that. Your making the argument that corporate taxes reduce his personal income, and therefore should count as his taxes. Ok. But if corporations did not have to pay taxes, they would pay their employees more, including secretaries. It's impossible to say for sure that a 35% corporate tax rate reduces secretary salaries by 35%, but it is something highly significant. In a roundabout way the secretary is paying that corporate tax too. Its effect is not as directly measurable on her as it is on Buffet, and might not be 1 for 1, but it's undeniably there and equally applicable to her tax rate. Also Social Security reduces her pay by 12.4% (half of which is paid by her employer but again would likely go to her if not). Since its capped at $100k income, it rounds to 0% of Buffet's yearly earnings. *I should point out that I am aware I've grossly oversimplified the effect of the corporate tax on the secretary, I trust but you get the point.
    - yummyfajitas 17y ago
      The corporate tax rate is only paid on profits. Profits and pay for workers are in competition. So raising the cost of profits actually increases the incentive to pay workers more. This is why many actual nonprofits are poorly managed; they are funneling profits to workers rather than to shareholders.
      - byrneseyeview 17y ago
        Profits and pay for workers are in competition. So raising the cost of profits actually increases the incentive to pay workers more. That is not how it works. When car companies start losing money, they don't give people raises; they fire them. When Goldman has a great quarter, they don't cut people's pay -- they give them bonuses. Nonprofits are managed because they exist to spend money, not to spend it well.
        yummyfajitas 17y ago
        You are missing the point. A company has money after expenses (I'll abbreviate it MAE) which must be distributed. (Or in the case of GM, they have negative money after expenses.) You are discussing the behavior of companies in response to changes in MAE. I'm discussing how a fixed amount of MAE is distributed in response to changes in incentives. Each dollar of MAE can be given either to shareholders, to employees, or can be invested. If you raise the cost of distributing money to shareholders (this is what the corporate tax does), companies will divert money to employees and investments. I.e., no one will pay dividends if there is a 100% dividend tax.
- las-vegas-mike 17y ago
  "Real-life Robinhood?" Really? I think its far more likely that he is a damn smart businessman. Consider this fact: Buffet spoke out about keeping the Estate Tax, because, as he said, rich people need to pay more. In reality, the Estate Tax generates over $ 12 Billions dollars a year for big life insurance companies, which Buffet either owns stock in or controls. If Buffet was a "real-life Robinhood" he would say repeal the Estate Tax (as it destroys jobs and small businesses) and make ME pay more directly. Don't agree about the Estate Tax? Watch this video http://www.youtube.com/watch?v=Urvkfi134Ew and tell me how you figure.

That's dismissive of his very valid points. Buffet is one of the most selfless rich guys of all time. Also one of the most infamously direct and honest. He's not saying that as part of some sort of Orwellian consipiracy to quell the masses. He's saying that because its true. He points out regularly injustices such as the fact that his secretary pays a higher tax rate than he does, thanks to the ridiculous capital gains laws in this country. He points out regularly that people like him should have to pay higher taxes, including the estate tax. He lives less lavishly than most people who have .1% of his wealth. He's already given most of his fortune (the largest single donation ever) to charity and will give the rest when he goes. He's a real-life Robinhood.

deleted 17y ago
[deleted]
byrneseyeview 17y ago
He points out regularly injustices such as the fact that his secretary pays a higher tax rate than he does, thanks to the ridiculous capital gains laws in this country. Corporate tax rates plus capital gains tax rates exceed normal income tax rates. The only way you can claim that he pays less in taxes on selling stock is if you assume that the company's profits -- the sum of which, discounted to the present, is the value of the stock -- somehow don't affect the value of the stock. If we cut capital gains taxes to zero and added an equivalent amount to corporate profits (say, a 40% annual tax rate instead of 35%), the government would make an equivalent amount of money from the same economic activity, and Buffett's theoretical tax rate would go down. Similarly, if corporate income taxes were zero and his capital gains were taxed at 40%, he'd pay much more than his secretary, but the government would collect the same amount. If the strength of his argument is independent of the magnitude of the problem he's arguing against, there is a flaw there. Buffett is an admirable guy. But the line about his secretary is a rhetorical flourish, nothing more.
- mattmaroon 17y ago
  They're his words (paraphrased) not mine, and it is impossible Buffet is unaware of corporate tax. My guess is its more than rhetorical flourish too since he's not known for that. Your making the argument that corporate taxes reduce his personal income, and therefore should count as his taxes. Ok. But if corporations did not have to pay taxes, they would pay their employees more, including secretaries. It's impossible to say for sure that a 35% corporate tax rate reduces secretary salaries by 35%, but it is something highly significant. In a roundabout way the secretary is paying that corporate tax too. Its effect is not as directly measurable on her as it is on Buffet, and might not be 1 for 1, but it's undeniably there and equally applicable to her tax rate. Also Social Security reduces her pay by 12.4% (half of which is paid by her employer but again would likely go to her if not). Since its capped at $100k income, it rounds to 0% of Buffet's yearly earnings. *I should point out that I am aware I've grossly oversimplified the effect of the corporate tax on the secretary, I trust but you get the point.
  - yummyfajitas 17y ago
    The corporate tax rate is only paid on profits. Profits and pay for workers are in competition. So raising the cost of profits actually increases the incentive to pay workers more. This is why many actual nonprofits are poorly managed; they are funneling profits to workers rather than to shareholders.
    - byrneseyeview 17y ago
      Profits and pay for workers are in competition. So raising the cost of profits actually increases the incentive to pay workers more. That is not how it works. When car companies start losing money, they don't give people raises; they fire them. When Goldman has a great quarter, they don't cut people's pay -- they give them bonuses. Nonprofits are managed because they exist to spend money, not to spend it well.
      - yummyfajitas 17y ago
        You are missing the point. A company has money after expenses (I'll abbreviate it MAE) which must be distributed. (Or in the case of GM, they have negative money after expenses.) You are discussing the behavior of companies in response to changes in MAE. I'm discussing how a fixed amount of MAE is distributed in response to changes in incentives. Each dollar of MAE can be given either to shareholders, to employees, or can be invested. If you raise the cost of distributing money to shareholders (this is what the corporate tax does), companies will divert money to employees and investments. I.e., no one will pay dividends if there is a 100% dividend tax.
las-vegas-mike 17y ago
"Real-life Robinhood?" Really? I think its far more likely that he is a damn smart businessman. Consider this fact: Buffet spoke out about keeping the Estate Tax, because, as he said, rich people need to pay more. In reality, the Estate Tax generates over $ 12 Billions dollars a year for big life insurance companies, which Buffet either owns stock in or controls. If Buffet was a "real-life Robinhood" he would say repeal the Estate Tax (as it destroys jobs and small businesses) and make ME pay more directly. Don't agree about the Estate Tax? Watch this video http://www.youtube.com/watch?v=Urvkfi134Ew and tell me how you figure.