The Warren Buffett's Secretary Issue

[Listening]

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.

I see where you are going. And I certainly agree. Of course, she pays sales tax too.

But, the real point is what you stated before.......if he makes more in income and it isn't sheltered, he pays. more.

It isn't my thinking.....I was reflecting what I am reading. Overall, he probably pays a great deal more in terms of absolute dollars. The real question is why is the capital gains tax lower than the marginal tax rate for someone making 60 K. I think the answer is that it is because it is on investments which supposedly stimulate the economy, but I'll let others answer. I am not arguing the point, I was trying to see if I understood the argument correctly.

BTW: You asked for links, but I am taking information from other links on this thread.

And, in the end, it is not a very healthy discourse if people are using his secretary to make this kind of point. Why not be honest about what is going on in terms of taxes. Separate his income tax from his capital gains. They are two different things and if we don't like it...it should change (not saying it should).

 

[Listening]

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.

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.

That wasn't in the quote you had up before.

I don't see how what he says here could be true. He might be saying the capital gains are being taxed twice (I really have no idea), but the intial investment is not being taxes. At least any of my intial investments are not taxed when they come back with profits (when the come back with profits...does not always happen).

 

[Listening]

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.

Please help me out here ?

I am not that well versed in these areas so I am trying to understand this argument.

Let's say that W.B. invests $1000 in something.

A year later the enterprise yields back $1100.

Buffet will pay no tax on the original $1000.

He will pay capital gains on the $100 provided it qualifies.

Now if the capital gains are actually profits from a company he owns, that $100 would have been profit and corporate taxes (lets say it was $130 that was taxed $30).

Is that what you are saying ?

 

[Quantum Windbag]

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.

Please help me out here ?

I am not that well versed in these areas so I am trying to understand this argument.

Let's say that W.B. invests $1000 in something.

A year later the enterprise yields back $1100.

Buffet will pay no tax on the original $1000.

He will pay capital gains on the $100 provided it qualifies.

Now if the capital gains are actually profits from a company he owns, that $100 would have been profit and corporate taxes (lets say it was $130 that was taxed $30).

Is that what you are saying ?

You are missing a step.

Warren Buffet invests in an an enterprise by taking $1000 from Berkshire-Hathaway and buying its stock. A year later that investment returns $1100, which is a $100 dollar profit for Berkshire-Hathaway. That $100 is taxed at 35%. Warren Buffet then pays himself the remaining $65 dollars which is taxed at 15%. That puts $55.25 in Buffet's pocket, and is an effective tax rate of 43.75% on the money he makes.

I dare anyone to try and tell me that Buffet's assistant or receptionist pays a tax rate that is higher than that.

 

[Listening]

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.

Please help me out here ?

I am not that well versed in these areas so I am trying to understand this argument.

Let's say that W.B. invests $1000 in something.

A year later the enterprise yields back $1100.

Buffet will pay no tax on the original $1000.

He will pay capital gains on the $100 provided it qualifies.

Now if the capital gains are actually profits from a company he owns, that $100 would have been profit and corporate taxes (lets say it was $130 that was taxed $30).

Is that what you are saying ?

You are missing a step.

Warren Buffet invests in an an enterprise by taking $1000 from Berkshire-Hathaway and buying its stock. A year later that investment returns $1100, which is a $100 dollar profit for Berkshire-Hathaway. That $100 is taxed at 35%. Warren Buffet then pays himself the remaining $65 dollars which is taxed at 15%. That puts $55.25 in Buffet's pocket, and is an effective tax rate of 43.75% on the money he makes.

I dare anyone to try and tell me that Buffet's assistant or receptionist pays a tax rate that is higher than that.

Many thanks for that clarrification.

Hey Ed.....does this support what Rush is saying ?

 

[edthecynic]

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.

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.

That wasn't in the quote you had up before.

I don't see how what he says here could be true. He might be saying the capital gains are being taxed twice (I really have no idea), but the intial investment is not being taxes. At least any of my intial investments are not taxed when they come back with profits (when the come back with profits...does not always happen).

Actually, it was in the original post i made with the quote. Afterward I just cited parts relevant to the replies.

And yes, you are correct that Limbaugh is wrong about the initial investment being taxed twice, once as personal income and the other as capital gains, assuming you had a gain in value. If your investment comes back as a loss, you get to deduct that loss from your taxes, minimizing the so called "risk" used to justify the lower tax rate on cap gains.

Here is the whole quote as first posted:

http://www.usmessageboard.com/4166182-post10.html

 

[edthecynic]

Please help me out here ?

I am not that well versed in these areas so I am trying to understand this argument.

Let's say that W.B. invests $1000 in something.

A year later the enterprise yields back $1100.

Buffet will pay no tax on the original $1000.

He will pay capital gains on the $100 provided it qualifies.

Now if the capital gains are actually profits from a company he owns, that $100 would have been profit and corporate taxes (lets say it was $130 that was taxed $30).

Is that what you are saying ?

You are missing a step.

Warren Buffet invests in an an enterprise by taking $1000 from Berkshire-Hathaway and buying its stock. A year later that investment returns $1100, which is a $100 dollar profit for Berkshire-Hathaway. That $100 is taxed at 35%. Warren Buffet then pays himself the remaining $65 dollars which is taxed at 15%. That puts $55.25 in Buffet's pocket, and is an effective tax rate of 43.75% on the money he makes.

I dare anyone to try and tell me that Buffet's assistant or receptionist pays a tax rate that is higher than that.

Many thanks for that clarrification.

Hey Ed.....does this support what Rush is saying ?

No.
He uses Buffet as an example because Buffet is in the news, but he makes it clear that he is talking about anyone who makes a capital investment like buying stock. He makes it clear when he brings up "or every rich person" that he is talking about people buying stock in any other company, not necessarily a company they own. Clearly when he talks about Buffet's secretary's tax rate he is not talking about corporate taxes.

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.

 

[Listening]

It is too high. And his is too low.

Everyone should pay the same percentage in income tax.

What Buffett is not telling you is that he has already paid income taxes on his income, he now lives off of the dividends and capitol gains and they are taxed at a lower rate because he has already paid taxes on the money that he has invested. Of course, he is 88, and might have forgotten that he has already paid taxes on that, but then there is this.

Warren 'Raise My Taxes' Buffett's Company May Owe IRS $1 Billion | NewsBusters.org

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.

The DittoTards are in full parrot mode!

As anyone who has stock knows, you don't pay cap gains taxes on the money you use to purchase the stock with. You only pay cap gains taxes on the increase over your purchase price for the stock. That increase has never been taxed before, and grows and grows tax free, like an unlimited IRA with no penalties, until it is "realized" by selling it.

This is the thing, CON$ervative know-it-all parrots are the stupidest people on Earth.

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.

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.

Can you please supply a link for this transcript. I'd like to check a couple of things before I post any more on this.

 

[edthecynic]

What Buffett is not telling you is that he has already paid income taxes on his income, he now lives off of the dividends and capitol gains and they are taxed at a lower rate because he has already paid taxes on the money that he has invested. Of course, he is 88, and might have forgotten that he has already paid taxes on that, but then there is this.

Warren 'Raise My Taxes' Buffett's Company May Owe IRS $1 Billion | NewsBusters.org

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.

The DittoTards are in full parrot mode!

As anyone who has stock knows, you don't pay cap gains taxes on the money you use to purchase the stock with. You only pay cap gains taxes on the increase over your purchase price for the stock. That increase has never been taxed before, and grows and grows tax free, like an unlimited IRA with no penalties, until it is "realized" by selling it.

This is the thing, CON$ervative know-it-all parrots are the stupidest people on Earth.

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.

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.

Can you please supply a link for this transcript. I'd like to check a couple of things before I post any more on this.

No problem, I always have links to my quotes.

Another Offensive Obama Speech: The Warren Buffett Tax Hike Plan

 

[Listening]

No.
He uses Buffet as an example because Buffet is in the news, but he makes it clear that he is talking about anyone who makes a capital investment like buying stock. He makes it clear when he brings up "or every rich person" that he is talking about people buying stock in any other company, not necessarily a company they own. Clearly when he talks about Buffet's secretary's tax rate he is not talking about corporate taxes.

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.

Alright, I was ready to agree with you, but then I got to thinking.

So, let me ask another question.

The only stocks I deal in are ones in my 401K mutual funds. So, I know little about stocks.

However, I do know that benefits come from dividends and from price increases.

A dividend would be taxed twice (as described by Rush and others). Would you agree with that ?

But if you buy a stock at $30 and sell it (I think you have to wait a while for it to qualify for capital gains....but I could be wrong) at $40 and pay capital gains on the increase, you would not be double taxed.

Is that correct ?

If so, then I would say that you and Rush are partially correct and partially incorrect.

If not, help me see my mistake.

 

[Wiseacre]

Warren Buffett said his secretary makes 60k and pays a higher rate than he did, which was 17.7%. First of all, he said she pays 30%, which is BS. But even if she only takes the standard deduction and files as single, she's going to be about 16%. And what about an IRA or 401k? That could knock it down even more, plus if she's paying mortgage interest she could itemize and pay even less. So, this is bullshit.

 

[edthecynic]

No.
He uses Buffet as an example because Buffet is in the news, but he makes it clear that he is talking about anyone who makes a capital investment like buying stock. He makes it clear when he brings up "or every rich person" that he is talking about people buying stock in any other company, not necessarily a company they own. Clearly when he talks about Buffet's secretary's tax rate he is not talking about corporate taxes.

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.

Alright, I was ready to agree with you, but then I got to thinking.

So, let me ask another question.

The only stocks I deal in are ones in my 401K mutual funds. So, I know little about stocks.

However, I do know that benefits come from dividends and from price increases.

A dividend would be taxed twice (as described by Rush and others). Would you agree with that ?

But if you buy a stock at $30 and sell it (I think you have to wait a while for it to qualify for capital gains....but I could be wrong) at $40 and pay capital gains on the increase, you would not be double taxed.

Is that correct ?

If so, then I would say that you and Rush are partially correct and partially incorrect.

If not, help me see my mistake.

No, paying a tax on dividends is not a double tax. A dividend is an added value over and above what you paid for the stock. You still have the stock hopefully still worth at least the $30 you paid for it, so your dividend is money paid to you that was not taxed before because you didn't have it before to tax.

 

[Wiseacre]

No.
He uses Buffet as an example because Buffet is in the news, but he makes it clear that he is talking about anyone who makes a capital investment like buying stock. He makes it clear when he brings up "or every rich person" that he is talking about people buying stock in any other company, not necessarily a company they own. Clearly when he talks about Buffet's secretary's tax rate he is not talking about corporate taxes.

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.

Alright, I was ready to agree with you, but then I got to thinking.

So, let me ask another question.

The only stocks I deal in are ones in my 401K mutual funds. So, I know little about stocks.

However, I do know that benefits come from dividends and from price increases.

A dividend would be taxed twice (as described by Rush and others). Would you agree with that ?

But if you buy a stock at $30 and sell it (I think you have to wait a while for it to qualify for capital gains....but I could be wrong) at $40 and pay capital gains on the increase, you would not be double taxed.

Is that correct ?

If so, then I would say that you and Rush are partially correct and partially incorrect.

If not, help me see my mistake.

No, paying a tax on dividends is not a double tax. A dividend is an added value over and above what you paid for the stock. You still have the stock hopefully still worth at least the $30 you paid for it, so your dividend is money paid to you that was not taxed before because you didn't have it before to tax.

Actually, a dividend IS double taxed, the first time as profit that the company pays taxes on and the 2nd time by the person on his/her personal tax return.

About stocks, if you hold the stock (don't sell it) for more than 1 year, then it counts as capital gains and gets taxed at 15%. But if you sold the stock before then then it counts as ordinary income and you pay the same rate as wages.

 

[edthecynic]

Alright, I was ready to agree with you, but then I got to thinking.

So, let me ask another question.

The only stocks I deal in are ones in my 401K mutual funds. So, I know little about stocks.

However, I do know that benefits come from dividends and from price increases.

A dividend would be taxed twice (as described by Rush and others). Would you agree with that ?

But if you buy a stock at $30 and sell it (I think you have to wait a while for it to qualify for capital gains....but I could be wrong) at $40 and pay capital gains on the increase, you would not be double taxed.

Is that correct ?

If so, then I would say that you and Rush are partially correct and partially incorrect.

If not, help me see my mistake.

No, paying a tax on dividends is not a double tax. A dividend is an added value over and above what you paid for the stock. You still have the stock hopefully still worth at least the $30 you paid for it, so your dividend is money paid to you that was not taxed before because you didn't have it before to tax.

Actually, a dividend IS double taxed, the first time as profit that the company pays taxes on and the 2nd time by the person on his/her personal tax return.

About stocks, if you hold the stock (don't sell it) for more than 1 year, then it counts as capital gains and gets taxed at 15%. But if you sold the stock before then then it counts as ordinary income and you pay the same rate as wages.

But that was not what your MessiahRushie said!!! You are talking about 2 different entities, and Stuttering LimpTard is talking about one.

If you are going to include multiple entities than you could come up with more than double taxation, but it would be moronic. Somebody paid for the goods or services of the company, that paid the dividends, with dollars that were taxed when he earned them, etc., etc., etc.

Basically you are saying that once a dollar is taxed, it can't be taxed ever again no matter how many hands it passes through afterward.

 

[Oddball]

LIMBAUGH SAID!...LIMBAUGH SAID!...LIMBAUGH SAID!...LIMBAUGH SAID!...LIMBAUGH SAID!...

What a fucking tool.

 

[The T]

LIMBAUGH SAID!...LIMBAUGH SAID!...LIMBAUGH SAID!...LIMBAUGH SAID!...LIMBAUGH SAID!...

What a fucking tool.

Alot of libs have a hard on for Limbaugh.

 

[Listening]

No.
He uses Buffet as an example because Buffet is in the news, but he makes it clear that he is talking about anyone who makes a capital investment like buying stock. He makes it clear when he brings up "or every rich person" that he is talking about people buying stock in any other company, not necessarily a company they own. Clearly when he talks about Buffet's secretary's tax rate he is not talking about corporate taxes.

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.

Alright, I was ready to agree with you, but then I got to thinking.

So, let me ask another question.

The only stocks I deal in are ones in my 401K mutual funds. So, I know little about stocks.

However, I do know that benefits come from dividends and from price increases.

A dividend would be taxed twice (as described by Rush and others). Would you agree with that ?

But if you buy a stock at $30 and sell it (I think you have to wait a while for it to qualify for capital gains....but I could be wrong) at $40 and pay capital gains on the increase, you would not be double taxed.

Is that correct ?

If so, then I would say that you and Rush are partially correct and partially incorrect.

If not, help me see my mistake.

No, paying a tax on dividends is not a double tax. A dividend is an added value over and above what you paid for the stock. You still have the stock hopefully still worth at least the $30 you paid for it, so your dividend is money paid to you that was not taxed before because you didn't have it before to tax.

But if the corporation wasn't taxed, it is likely your divident would be higher. At least earnings per share would be higher.

is that not true ?

 

[Listening]

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 will go back to this and add that there appears to be more agreement about double taxation than disagreement.

The majority of the "issue" seems to be with Rush Limbaugh and his blatherings about the Buffet secretary standard.

I appreciate the information and perspective supplied by all and feel more educated on this issue for having been on this thread.

 

[Listening]

Alot of libs have a hard on for Limbaugh.

A great many conservatives (like myself) don't really care for Rush either.

 

[editec]

As a percentage of their incomes, the very VERY wealthy probably pay a smaller percentage of their incomes for all taxes, than all other taxpayers. (ESPECIALLY a greater percentage than the merely well off and affluent!)

In absolute terms the wealthy pay the greater amount of INCOME taxes than any other class of taxpayers.

In absolute terms everybody else pays the greater amount of all state and local taxes than the very very wealthy.