The "Buffet Rule" Bombshell

Discussion in 'Politics' started by P@triot, Dec 3, 2012.

  1. P@triot
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    P@triot Gold Member

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    Someone needs to get this over to Barack Hussein ASAP...

    Given that long, well-publicized history, there isn't much news to be found in Buffett's latest Times op-ed this morning, calling once again for a minimum tax on millionaires. Except that Buffett opens this one with a rifle shot at Grover Norquist specifically, and supply-side economics generally:

    Suppose that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

    Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.


    It's a catchy opener, attracting headlines and guffaws from the expected quarters. But I'm struck by his opener because I can think of at least one real-world example in which a rich investor nearly spiked a deal due to taxes: Warren Buffett himself, as recounted in Alice Schroeder's terrific biography, The Snowball (pages 230-232).

    Early in his career, Buffett invested heavily—almost one third of his early fund's capital—in Sanborn Map, a company that mapped utility lines and such. But he soon grew frustrated with the company's leadership, which "operated more like a club than a business," and which refused to return greater dividends to investors. So Buffett amassed more and more stock, and with control of the company finally in hand he pressed the board of directors to split the company in two (one for the mapping business, and one to hold the company's other outsized investments).

    Finally, the board capitulated. But with victory finally at hand, Buffett nearly scuttled the deal because of ... taxes. As Schroeder recounts, quoting Buffett, one director proposed that the company just cleanly break the company, despite the tax consequences—"let's just swallow the tax," he suggested.

    To which Buffett replied (as he recounted to Schroeder):

    And I said, 'Wait a minute. Let's -- "Let's" is a contraction. It means "let us." But who is this us? If everyone around the table wants to do it per capita, that's fine, but if you want to do it in a ratio of shares owned, and you get ten shares' worth of tax and I get twenty-four thousand shares' worth, forget it.'

    Buffett was willing to walk away from a deal because the taxes would have taken too much of a bite out of it. Fortunately for him, the board gave in and allowed him to structure the deal that he liked, saving him from his own Norquistian response.

    Hypocrisy... it is the cornerstone of the idiot liberal dumbocrat. As Andrew Wilkow so brilliantly stated: "Buffett wants to pull the ladder up behind him". He's made his billions, now he wants to pull the ladder up so that no one else can climb to the same level he did through business and personal wealth crushing taxes. It ensures his wealth and power for himself and future generations of his family.

    Watch What Warren Buffett Does, Not What He Says | The Weekly Standard
     
  2. beretta304
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    beretta304 BANNED

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    Crickets....
     
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  3. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Buffett is the worst biggest tax hypocrite

    Most of Berkshire Hathaway acquisitions are tax free stock swaps

    And all of his personal wealth is in a tax free trust
     
  4. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    That's how Billionaires and Trillionaires consolidate wealth for themselves: Socialism.

    THEY write the Tax Laws that they want to EXEMPT themselves from.
     
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  5. Oddball
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    Oddball BANNED Supporting Member

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    [​IMG]
     
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  6. P@triot
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    P@triot Gold Member

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    Warren Buffett Wrong Again on Tax Increases

    Buffett forgets that we already have a minimum tax. It is called the Alternative Minimum Tax (AMT). And since Congress passed it in the late 1960s, it has become more of a scourge of the middle class than the rich. If Congress foolishly adopted Buffett’s minimum tax, we can be sure that it would quickly grow to hammer the middle class the same way the old AMT did.

    He also fails to mention that the Buffett Rule is already largely in effect. According to the Congressional Budget Office (CBO), the top 1 percent of earners (those with incomes over $1.2 million in 2009) pay an effective tax rate on all federal taxes of 29 percent. That’s almost three times as high as the 11 percent average rate paid by the middle class.

    Buffett’s argument about the rich paying a lower rate is superficially plausible because the dividend and capital gains tax rates are currently set at 15 percent. Notice that even this rate is greater than the 11 percent average rate applied to the middle class. More critically, this 15 percent rate is applied after a 35 percent corporate income tax rate is applied. Buffett, being the world-class investor that he is, of course knows that the corporate tax gets subtracted first. He just ignores that little fact. Maybe somebody will ask him why someday.

    The other half of Buffett’s argument is also undone with data from CBO. Buffett writes that we need to raise taxes to get total federal tax revenue up from its current 15.5 percent of GDP to 18.5 percent—the historical amount of revenue raised by the federal tax system post–World War II in periods of economic expansion. However, revenues are as low as they are currently because of the slow-growing economy. As the economy recovers, so too will revenues.

    In 2007, before the worldwide economic meltdown, revenues were at the 18.5 percent of GDP mark. CBO estimates in its “Alternative Fiscal Scenario” that if Congress kept all current tax policies in place—including the Bush-era tax policies and all other tax increases in Taxmageddon (except the payroll tax cut)—tax revenue will surpass 18 percent of GDP in 2016—just four years from now. CBO estimates that revenue will approach 18.5 percent soon thereafter.

    Warren Buffett Wrong Again on Tax Increases
     
  7. GuyPinestra
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    GuyPinestra Senior Member

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    What?? No libs defending the Buffett??
     
  8. P@triot
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    P@triot Gold Member

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    Well, there is no defending the indefensible (although that normally doesn't stop them from trying)
     
  9. Old Rocks
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    Old Rocks Diamond Member

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    Ah yes. Let's all join in and defend the poor 1%, who might have to pay the same percentage as the middle class. Just keep that line going, it will sell so well in 2014.
     
  10. Avorysuds
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    Avorysuds Gold Member

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    It's like Arnold, The Rock and so many others who have admitted to using steroids saying that people shouldn't use it today... after they make their millions off of the use of steroids.

    Billionaires that want higher taxes now that they are rich… Fuck, at this point all they are doing is PR to make themselves look good.
     
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