The Warren Buffett's Secretary Issue

[Listening]

Warren Buffet has a lower tax rate than his secretary | The Unofficial Stanford Blog

“Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

********************

This is simply untrue.

Buffet knows we have a progressive tax system and that the more you make (in taxable income), the higher a percentage you will pay.

How does anyone buy into this crapp ?

Because we do more reading than you...

WASHINGTON, D.C.--The 400 highest-earning taxpayers in the U.S. reported a record $105 billion in total adjusted gross income in 2006, but they paid just $18 billion in tax, new Internal Revenue Service figures show. That works out to an average federal income tax bite of 17%--the lowest rate paid by the richest 400 during the 15-year period covered by the IRS statistics. The average federal tax bite on the top 400 was 30% in 1995 and 23% in 2002.

Richest 400 Earn More, Pay Lower Tax Rate - Forbes.com

Actaully, that does not seem to be the case.....

From what I can tell, the real discussion here is the fact that Buffet pays taxes on several different types of income, whereas his secretary is only paying income tax.

Buffet's next tax rate is lower than his secretary's, but is anyone going to state openly that his personal income tax rate is lower than that of his secreatry ?

O.K.....you might do more reading...

But, from what I can tell, there has been little effort to get everyone on an apples to apples comparison.

And that is where the real debate lies....from what I can tell.

It is that Buffet himself has said that this "net tax rate" is what he feels is out of kilter. And that seems to be what all the blather is about.

Tell me if I am wrong.

Are Buffet's personal tax returns public record ? If so, how much did he pay in terms of absolute dollars ? How much did his secretary pay.

If Buffet's net tax rate were the same as his secretary, how much more would he pay ?

And how much of the deficit would be erased by this difference ?

Do we have that math anywhere ?

 

[Listening]

If Warren and his class were paying more, she'd be paying less.

That is absolutely not true. Each and every time the top tax rates have been cut, the upper income earners have paid more in total and in percentage of all taxes collected.

Can you provide some support for this assertion ?

 

[PLYMCO_PILGRIM]

Why is it, that when pointing out that Warren Buffett's (legendary, and ostensibly long suffering & exploited) Secretary pays a higher tax rate than does Warren, none of the Big Government types ever come to the conclusion that her tax rate is Too High?

Or come to the conclusion that you can't compare Buffet's tax rate on capital gains to his secretary's tax rate on personal income if you want to make an honest comparison?

Now Buffetts tax rate on his personal income is actually HIGHER than his secretary's but no one seems to mention that.

 

[Skull Pilot]

Why is it, that when pointing out that Warren Buffett's (legendary, and ostensibly long suffering & exploited) Secretary pays a higher tax rate than does Warren, none of the Big Government types ever come to the conclusion that her tax rate is Too High?

Or come to the conclusion that you can't compare Buffet's tax rate on capital gains to his secretary's tax rate on personal income if you want to make an honest comparison?

Now Buffetts tax rate on his personal income is actually HIGHER than his secretary's but no one seems to mention that.

Exactly the point I have been trying to make for the last couple days

But all the sheep can hear is their own bleating.

 

[Ame®icano]

Partial thanks to Ravi. I agree that hers is too high.

Buffett's is only too low in the sense that Berkshire Hathaway is $1B in arrears on paying its taxes, which makes Buffett an enormous hypocrite, but not undertaxed. With a marginal corporate tax rate of 35% (federal), he would already have been taxed once on the return on his capital (if BH had paid the taxes). His cap gains and/or dividend taxes are the second time the same money is taxed.

How much he personally makes and how much he's worth are two different things.

This is from 2010. His secretary probably has bigger income then him.

According to Berkshire's proxy filing with the U.S. Securities and Exchange Commission, Buffett's salary was $100,000, as it has been for more than a quarter century.

Buffett also received $75,000 in fees for serving as a director of Washington Post Co, a large Berkshire investment.

Compensation also included $344,490 of personal and home security services, up 9 percent from $315,709 a year earlier.

REUTERS

 

[PLYMCO_PILGRIM]

Partial thanks to Ravi. I agree that hers is too high.

Buffett's is only too low in the sense that Berkshire Hathaway is $1B in arrears on paying its taxes, which makes Buffett an enormous hypocrite, but not undertaxed. With a marginal corporate tax rate of 35% (federal), he would already have been taxed once on the return on his capital (if BH had paid the taxes). His cap gains and/or dividend taxes are the second time the same money is taxed.

How much he personally makes and how much he's worth are two different things.

This is from 2010. His secretary probably has bigger income then him.

According to Berkshire's proxy filing with the U.S. Securities and Exchange Commission, Buffett's salary was $100,000, as it has been for more than a quarter century.

Buffett also received $75,000 in fees for serving as a director of Washington Post Co, a large Berkshire investment.

Compensation also included $344,490 of personal and home security services, up 9 percent from $315,709 a year earlier.

REUTERS

Well if his secretary's personal income is more than his personal income then she would pay more in federal income taxes because she "makes" more than him.

Thats a bunch of if/then but still.........now even so take that into account then take the 15% he pays on his capital gains and see which individual paid more in total taxes for the year.

 

[edthecynic]

The fat-assed moron is still telling his DittoTard parrots the same bullshit!

September 20, 2011
RUSH: There was an explanation of the difference between capital gains income and earned income and the tax rates on both, and the fact that capital gains income has already been taxed once before as income.

Capital gains income is taxed exactly once.

I wonder if rush is really as stupid as he seems or he just enjoys being a hero to the uberidiots.

The profits resulting in capital gains are taxed exactly twice. Once at the corporate level and once at the personal level.

That's not what your MessiahRushie is saying. He is saying that when a person buys stock the money used to buy the stock has been taxed at Buffets secretary's tax rate, and when the stock is sold it is taxed again at the cap gains tax rate, which is pure bullshit. Only the increase in value when the stock is sold is taxed at the cap gains rate. What you paid for the stock is deducted from what you sold the stock for, and that difference is what is taxed for the first and only time at the cap gains rate.

September 19, 2011
RUSH: The "unfairness" is the rate the secretary pays! You're comparing income versus capital gains and dividend rates. Now, when Buffett invests money in a stock and the stock shows a profit and he declares it, he'll pay 15% as a capital gains rate. But what money is he investing? He's investing after-tax dollars he's already paid his secretary's tax rate on. It's not that Warren Buffett somehow (or every rich person) has a stash of money that somehow they get to play with that's only taxed at 15%, and that the secretary and other people making $50,000 a year don't have that stash of money and don't have that loophole. There's no "loophole" here! There's no "loophole" that says Warren Buffett only has to pay 15% and his secretary has to pay whatever her rate is.

I don't even know. Thre's no loophole there. There's just a rate of taxation on capital gains income, investments -- you take a risk -- verses earned income, salary and wages and what have you; independent contractor income. My point is that the money Warren Buffett uses to buy stock or invest in companies is already after-tax dollars. It's already money he's made that he has already paid his income tax rate on. This is a flat-out lie, folks. It's a flat-out, total, purposeful misrepresentation.

 

[Oddball]

Who, besides you (and you care waaaaaaaaaay too much), gives a flying fuck about what Limpbagh says?

Fact remains that the same money is taxed multiple times.

 

[edthecynic]

Who, besides you (and you care waaaaaaaaaay too much), gives a flying fuck about what Limpbagh says?

Fact remains that the same money is taxed multiple times.

Obviously YOU give a hairy flying fuck! You habitually defend your MessiahRushie and you habitually neg me for making him look like a lying fool.

But not at the personal income tax rate when you buy stock and then the same money again at the cap gains rate when you sell. The money you buy stock with is taxed only once at the personal income tax rate and the increase in value only is taxed once, for the first time, at the cap gains rate when the stock is sold.

 

[Oddball]

Best log out and pull up a seat next to your radio, so you can hang on each and every word Rush says today!

 

[edthecynic]

Best log out and pull up a seat next to your radio, so you can hang on each and every word Rush says today!

Why would I have to log out to listen to your MessiahRushie?
No wonder you are a DittoTard!

 

[asterism]

If Warren and his class were paying more, she'd be paying less.

That is absolutely not true. Each and every time the top tax rates have been cut, the upper income earners have paid more in total and in percentage of all taxes collected.

Can you provide some support for this assertion ?

The Top 10 Percent of Income Earners Paid 71 Percent of Federal Income Tax

National Taxpayers Union - Who Pays Income Taxes?

 

[Listening]

Partial thanks to Ravi. I agree that hers is too high.

Buffett's is only too low in the sense that Berkshire Hathaway is $1B in arrears on paying its taxes, which makes Buffett an enormous hypocrite, but not undertaxed. With a marginal corporate tax rate of 35% (federal), he would already have been taxed once on the return on his capital (if BH had paid the taxes). His cap gains and/or dividend taxes are the second time the same money is taxed.

How much he personally makes and how much he's worth are two different things.

This is from 2010. His secretary probably has bigger income then him.

According to Berkshire's proxy filing with the U.S. Securities and Exchange Commission, Buffett's salary was $100,000, as it has been for more than a quarter century.

Buffett also received $75,000 in fees for serving as a director of Washington Post Co, a large Berkshire investment.

Compensation also included $344,490 of personal and home security services, up 9 percent from $315,709 a year earlier.

REUTERS

Well if his secretary's personal income is more than his personal income then she would pay more in federal income taxes because she "makes" more than him.

Thats a bunch of if/then but still.........now even so take that into account then take the 15% he pays on his capital gains and see which individual paid more in total taxes for the year.

Please help me out here.

I thought I read that his secretary made 60K a year. Did I read that wrong ?

If that is the case, she makes less than he does.

However, she is only paying income taxes.

He is paying income taxes on at least 100K (is this correct) and maybe more. If this is the case, then he is probably paying at a higher rate (on just his personal income taxes).

Does anyone disupute that ?

Then, if you take the taxes he pays on other things (capital gains) is at a much lower rate. If you combine all his taxes against income (personal + capital gains), and divide it into the taxes he pays....the "net" rate would be lower than his secretary.

So..to summarize:

1. Buffet makes more than his secretary (taxable income).
2. Buffet pays more personal income taxes and at a higher rate than his secretary.
3. Buffet pays a lot of capital gains tax which is at a lower rate than his secretary.
4. Buffet likely pays a bunch more in taxes (absolute dollars) than his secretary.
5. Buffet's net tax rate is lower than his secretary if you look at all his "income" (which includes gains).
6. Some people have a big issue with Rush Limbaugh (and they also seem to think that all conservatives support Rush ?). That is just a guess.

Setting Rush aside, it seems like the argument is that it is unfair that even though Buffet makes a whole lot more (however he makes it), that his net tax rate is lower than his secretary's.

Does that sum it up ?

 

[Listening]

Capital gains income is taxed exactly once.

I wonder if rush is really as stupid as he seems or he just enjoys being a hero to the uberidiots.

The profits resulting in capital gains are taxed exactly twice. Once at the corporate level and once at the personal level.

That's not what your MessiahRushie is saying. He is saying that when a person buys stock the money used to buy the stock has been taxed at Buffets secretary's tax rate, and when the stock is sold it is taxed again at the cap gains tax rate, which is pure bullshit. Only the increase in value when the stock is sold is taxed at the cap gains rate. What you paid for the stock is deducted from what you sold the stock for, and that difference is what is taxed for the first and only time at the cap gains rate.

September 19, 2011
RUSH: The "unfairness" is the rate the secretary pays! You're comparing income versus capital gains and dividend rates. Now, when Buffett invests money in a stock and the stock shows a profit and he declares it, he'll pay 15% as a capital gains rate. But what money is he investing? He's investing after-tax dollars he's already paid his secretary's tax rate on. It's not that Warren Buffett somehow (or every rich person) has a stash of money that somehow they get to play with that's only taxed at 15%, and that the secretary and other people making $50,000 a year don't have that stash of money and don't have that loophole. There's no "loophole" here! There's no "loophole" that says Warren Buffett only has to pay 15% and his secretary has to pay whatever her rate is.

I don't even know. Thre's no loophole there. There's just a rate of taxation on capital gains income, investments -- you take a risk -- verses earned income, salary and wages and what have you; independent contractor income. My point is that the money Warren Buffett uses to buy stock or invest in companies is already after-tax dollars. It's already money he's made that he has already paid his income tax rate on. This is a flat-out lie, folks. It's a flat-out, total, purposeful misrepresentation.

You have to be very clear about what money you are talking about.

What you stated seems a little ambiguous.

What Rush says does not imply (to me) that he is saying that Rush is getting double taxed on his capital.

To your point, if he is saying that, he would be dead wrong.

I just don't get that from his quote.

I should point out that as a conservative, I don't like Rush Limbaugh. I tried to listen to him on a number of occasions, and after three hours he said very little and what he did say was accompanied by his telling me how to think about it...instead of letting me decide for myself.

 

[edthecynic]

The profits resulting in capital gains are taxed exactly twice. Once at the corporate level and once at the personal level.

That's not what your MessiahRushie is saying. He is saying that when a person buys stock the money used to buy the stock has been taxed at Buffets secretary's tax rate, and when the stock is sold it is taxed again at the cap gains tax rate, which is pure bullshit. Only the increase in value when the stock is sold is taxed at the cap gains rate. What you paid for the stock is deducted from what you sold the stock for, and that difference is what is taxed for the first and only time at the cap gains rate.

September 19, 2011
RUSH: The "unfairness" is the rate the secretary pays! You're comparing income versus capital gains and dividend rates. Now, when Buffett invests money in a stock and the stock shows a profit and he declares it, he'll pay 15% as a capital gains rate. But what money is he investing? He's investing after-tax dollars he's already paid his secretary's tax rate on. It's not that Warren Buffett somehow (or every rich person) has a stash of money that somehow they get to play with that's only taxed at 15%, and that the secretary and other people making $50,000 a year don't have that stash of money and don't have that loophole. There's no "loophole" here! There's no "loophole" that says Warren Buffett only has to pay 15% and his secretary has to pay whatever her rate is.

I don't even know. Thre's no loophole there. There's just a rate of taxation on capital gains income, investments -- you take a risk -- verses earned income, salary and wages and what have you; independent contractor income. My point is that the money Warren Buffett uses to buy stock or invest in companies is already after-tax dollars. It's already money he's made that he has already paid his income tax rate on. This is a flat-out lie, folks. It's a flat-out, total, purposeful misrepresentation.

You have to be very clear about what money you are talking about.

What you stated seems a little ambiguous.

What Rush says does not imply (to me) that he is saying that Rush [Buffet] is getting double taxed on his capital.

To your point, if he is saying that, he would be dead wrong.

I just don't get that from his quote.

I should point out that as a conservative, I don't like Rush Limbaugh. I tried to listen to him on a number of occasions, and after three hours he said very little and what he did say was accompanied by his telling me how to think about it...instead of letting me decide for myself.

LimpTard is not implying it, he is saying it outright! He is clearly saying that the money people buy stock with was first taxed at the personal income tax rate and then is taxed again at the cap gains rate when it is sold. He said you have to add the two tax rates together to get the real tax rate on stocks.

September 19, 2011
RUSH: The whole argument for the Buffett Rule is Buffett himself says it's not fair that he's paying a lower tax rate on his capital gains and dividend income than his secretary pays on her earned income. It just isn't fair. The only problem is that is completely untrue. It's a great sounding argument, comes together as a nice sound bite, but it is untrue. Buffett is paying a tax in his dividend and capital gains on money that's already been taxed once before as income. So you have to add that first tax rate to the second lower rate on capital or dividends to find out what somebody's actually paying on it.

 

[PLYMCO_PILGRIM]

Who, besides you (and you care waaaaaaaaaay too much), gives a flying fuck about what Limpbagh says?

Fact remains that the same money is taxed multiple times.

that last time i listened to limbaugh was when ed was talking about him, i wanted to hear the clip for myself and went looking on youube, if it wasn't for him I wouldn't have heard limbaughs voice at all this year.

 

[PLYMCO_PILGRIM]

How much he personally makes and how much he's worth are two different things.

This is from 2010. His secretary probably has bigger income then him.



REUTERS

Well if his secretary's personal income is more than his personal income then she would pay more in federal income taxes because she "makes" more than him.

Thats a bunch of if/then but still.........now even so take that into account then take the 15% he pays on his capital gains and see which individual paid more in total taxes for the year.

Please help me out here.

I thought I read that his secretary made 60K a year. Did I read that wrong ?

If that is the case, she makes less than he does.

However, she is only paying income taxes.

He is paying income taxes on at least 100K (is this correct) and maybe more. If this is the case, then he is probably paying at a higher rate (on just his personal income taxes).

Does anyone disupute that ?

Then, if you take the taxes he pays on other things (capital gains) is at a much lower rate. If you combine all his taxes against income (personal + capital gains), and divide it into the taxes he pays....the "net" rate would be lower than his secretary.

So..to summarize:

1. Buffet makes more than his secretary (taxable income).
2. Buffet pays more personal income taxes and at a higher rate than his secretary.
3. Buffet pays a lot of capital gains tax which is at a lower rate than his secretary.
4. Buffet likely pays a bunch more in taxes (absolute dollars) than his secretary.
5. Buffet's net tax rate is lower than his secretary if you look at all his "income" (which includes gains).
6. Some people have a big issue with Rush Limbaugh (and they also seem to think that all conservatives support Rush ?). That is just a guess.

Setting Rush aside, it seems like the argument is that it is unfair that even though Buffet makes a whole lot more (however he makes it), that his net tax rate is lower than his secretary's.

Does that sum it up ?

I see what you are saying.

Do you possibly have links to all the data involved in your post so we can physically verify this instead of postulating it? I'm wondering how much more in excise, property, fuel, and sales taxes buffet ends up paying too....we have to take all that into account.

Heck if buffet buys a 100,000 car at a 5% sales tax guess what, we have to add that percentage's average into the total

You see where I'm going too right?

Lets just talk about income tax. She makes 60k, he makes 100k, who pays more on their income in total and as a percentage of those two? Obviously buffet.

Now if we take what your thinking into account the percentage, overall, for buffet might be lower but what about his total burden in dollars? That would still be a lot higher.

I dunno, it all just strikes me as dishonest the way Buffet and Obama portrayed the whole thing.

 

[Ame®icano]

Here is the topic with the similar thematic, with a question for proponents of higher taxes for rich.

For some reason liberals are avoiding to answer...

How much is a fair share?

 

[Quantum Windbag]

No, that makes 100% of the tax burden B-H's. Remember the Extreme Court has established that a corporation is a separate person!

Again, your MessiahRushie is talking about people who buy stock with their personal income. Not all people own the company they buy stock in!!!!! And it is undeniable that he is talking about the personal tax rate and not the corporate rate when he says Buffet is buying the stock with money that he PAID HIS SECRETARY'S RATE ON. B-H did not pay his secretary's rate on their corporate income!!!!!

You just don't want to admit your MessiahRushie is full of shit!!!

Actually, Congress is the one that said that. They defined corporations as people in order to collect income tax from them, something most idiots supported at the time because they thought it would get them more money. The consequence of that was that it gave them rights under the same law that forced them to pay taxes. If you do not like it you are free to write your congresscritter and tell him to stop taxing them, and they will no longer have those pesky rights that come from paying taxes.

Or would that cause your brain to explode?

To make it simple, one third of the entire company is owned by Buffet. It is his money, and he leaves it in the company to keep it out of the hands of the government. Every once in a while he takes some of that moeny out of the company. He opts to do so as a capital gain instead of paying himself a salary because it saves him money.

That alone makes his claim that he does not do anything to avoid paying taxes on it a lie, because he deliberately takes advantage of a hole in the tax code that lets him park his money in the company instead of collecting a salary, and then call it carried interest. He has the right to do that, but he does not have the right to force me to believe him when he lies.

Your personal agenda and bias make you want to buy into his lie. Don't, it just makes you a sap. He gets rich off the tax code, and will make billions more if the Buffet Rule is made law. Hell, he is making billions just because idiots like you are supporting it. You are the one supporting the rich at the expense of the middle class and the poor.

That is just pathetic.

None of that changes the fact that your MessiahRushie was full of shit when he said that people who buy stock are being taxed twice when they sell their stock, once as earned income and a second time as capital gains. Corporate income is not taxed at earned income rates.

September 20, 2011
RUSH: There was an explanation of the difference between capital gains income and earned income and the tax rates on both, and the fact that capital gains income has already been taxed once before as income.

The income is being taxed twice, the government just collects it from different people.

Something to think about, if the government stopped taxing corporate income more money would be available for dividends, giving that person who buys stock more money.

 

[boedicca]

Here is the topic with the similar thematic, with a question for proponents of higher taxes for rich.

For some reason liberals are avoiding to answer...

How much is a fair share?

In Pleasanton CA in 2009, Rep. McNerney answered the question: a Fair Tax Rate is 90%.

Congressman Jerry McNerney (D-Pleasanton) hosted “Congress at your Corner” from 9:30 to 10:30 this morning. The meetings are “part of McNerney’s effort to reach out to and hear from citizens in the 11th District.” I have never gone to anything like this before, but decided to go to express my displeasure about the stimulus package. Keep in mind that this is NORTHERN CALIFORNIA. The meeting was held in a local bagel cafe, and I was happy to see that the place was packed with probably about 50-75 people. The vast majority of them were extremely angry about the stimulus package. It started out with him taking questions from the crowd, but then they started a line for people to talk to him privately because things were getting “out of control”. Several people then asked if he would consider having a town hall style meeting with microphones, etc. We’ll see if that happens. I’m not betting on it.

During the first part, several people asked if he had read the stimulus package. At first he tried to ignore them, but eventually admitted he hadn’t. (No surprise there.)

Several people came with signs similar to what you see at the protest rallies.

When he started talking to people individually, he obviously did not want anyone else to hear. That did not go over well with the crowd. They were there to find out what he thought, and he wasn’t allowing that to happen.

When I got my time with him, I explained to him that even people who make $150k in Northern Cal. are not “rich” and should not be taxed as if they were. (A 1400 sq ft, 40 year old home here goes for over half a million, even after the housing slump. Then you add in real estate taxes, state income taxes, 10% sales tax, gas prices, utility costs, etc.) I also expressed my concern that about half the people in the country now pay no income taxes, so there is overwhelming incentive for them to keep voting for democrats and therefore higher taxes for the rest of us. He told me that he thought tax rates should go up for the very rich and that the top marginal tax rate should be 90%. I couldn’t believe what I was hearing, so I asked in a voice that many in the room could hear if he really meant 90%, and he said yes. Several people asked me after my turn was over if they heard correctly what he said, and were amazed when I said yes.

I also asked how a congress that was very critical of republican ethics and vowed “change” could justify letting Rangel, Dodd, and Murtha keep their committee chairmanships with their obvious ethical issues. His response was that Republican’s ethics were worse because of their “unjustified aggressive war”.

This is just my small example of the anger and frustration of people in liberal Northern California.


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