Tim Eriksen

Please look up a chart on effective income tax rates for income groups. The wealthy pay twice the rate of the middle class, and the poor have a negative rate. What skews the numbers (to make it appear that the middle class is taxed higher than the rich) is ignoring corporate taxes on dividend income and cap gains, and the improper treatment of payroll taxes. Why should both halves (employer and employee) be attributed to the individual and ignore the benefit payments at retirement (as Buffett does)? His approach is ridiculous. Why not just use what they actually pay and factor in benefits? It was purposefully designed for individuals to get back what they pay in plus a modest return. Buffett's secretary, that he is so concerned about, will end up paying a lifetime rate in of 10% if you attribute the cost of both halves of payroll taxes to her and include her benefits, but only a 3% lifetime rate if you just attribute what she directly pays (employee portion). Either way, that is well less than the rate Buffett will pay. Why doesn't Buffett compare his taxes with his previous secretary who is of similar age? Because he/she at age 80 would have a hugely negative rate since he/she would be getting Social Security and Medicare benefits. Do the math. Buffett's analysis is a joke and based on the conclusion he desires, not the facts. The poor and middle class are not getting screwed. Everyone has seen rates lowered.

I disagree with your perception of US politics. Obama is not center-right in terms of the US (compared to Europe he is). Romney was center-right and they certainly had differences in terms of social policies and role of government. Obama is on the extreme left on abortion, left on gay marriage, left on civil rights, wants government spending at a higher % of GDP since WWII, etc. He is certainly center-left in terms of the environment (global warming, offshore drilling, drilling on federal lands). On wire tapping, Gitmo, and the wars he switched from left to center after being elected. You could argue he is in the center on campaign finance, bailouts, and tax cuts, etc. but that is more pragmatism than his actual philosophy. You seem to think the Tea Party and Republicans recently moved to the right. If you study politics, the Democrats started moving left in WWII and then lurched in the 70's. Republicans did move left under Nixon, but reversed that with Reagan. I don't see a rightward move since then. The Republicans have the same beliefs today as thirty years ago. As I said before, Republicans were disappointed with Bush as he was too open to big government. He was the one who moved, not the core of the party.

This has been discussed previously in other posts about Buffett and tax rates. The rich do not pay a lower rate on average than the middle class. Buffett has to allocate both halves of payroll taxes to the individual, ignore untaxed medical benefits, ignore the return of those payroll taxes at retirement, ignore that dividends and capital gains are already taxed (or likely will be) at the corporate level, and include all deductions to lower the actual income of the middle class for his analysis to work. It is sloppy IMO.

Reagan wanted lower taxes and lower spending, other than defense. Congress refused. Reagan went to the American people to get them to push their Congressperson. Congress still refused to cut spending but did strike a deal with Reagan to lower taxes. The economy grew as did the deficit. Are you saying you want Democrats to take ownership of the deficit or the growth? You can't have it both ways. Cheers!

Republican "president". Singular, not plural. Eisenhower did it in 1956,1957, and 1960. He raised the tax rate to 92%. You are correct that there is one Republican President - Eisenhower. All three of his balanced budgets were under Democratic controlled Congress. There are two Democrat Presidents (Truman and Clinton). Truman had three budget surplus years (two of which were under Republican Congressional control the third was Democrat) and Clinton had two (both under a Republican Congress). By President it is 5-3 Democrats. By Congressional control it is 4-4. I would also note Republicans have balanced the budget when in control of Congress 4 out of 12 years since WW2. When Democrats are in control it has been 4 out of 46 years. I am not trying to be harsh, but to say that "liberals actually have more balanced budgets" is to either purposely mislead or to be ignorant of the truth.

I didn't read the article, so I may be off base, but the writer may have referred to the '93 budget under a Democrat majority. That would just show that the writer is a poor writer too. To reference legislation from six years prior to balancing the budget is irrelevant. Regardless Presidents don't balance budgets. It is primarily Congress that does. President's send Congress a budget proposal that they can either work from or ignore. Ultimately it is Congress that writes the budget. Thus the writer's whole analysis is based on a flawed premise.

Do you really need me to note every error in the article? Not going to happen. I have better things to do, and I know that it would likely be lost on you. That you cannot see the errors in statements like "Only 5 (five) current Presidents have governed with a surplus. They were all Democrats!" The truth is 1 not 5. It was Clinton, under a a Republican Congress benefiting from lower defense spending due to the end of the Cold War, and a revenue spike from the telecom/internet bubble. It is not the charts that are often incorrect, it is the assumption about the chart. It assumes a direct relationship between the party of the President and the economy, but ignores Congress, State Government. If you cannot see that the article is not objective, then we cannot have a rational conversation. The charts imply that Presidents control government spending and the economy. Only those who are ignorant of our political system believe that.

Not sure what world you are living in, but the majority of citizens are not clamoring to pay down the national debt, nor eliminate the deficit (which is probably what you really meant). While I agree too many conservatives see lower taxes as the solution to every problem, you give liberals too much credit. We have had 8 balanced budgets since WW2 (not counting the years where SS surpluses were used to mask the deficit). In 5 of those years we had Democrat Presidents and 3 were Republican presidents. Hardly overwhelming evidence. Two of the years were Clinton, who clearly governed as a moderate/conservative fiscally, and they were brought about by a Republican Congress. If you compare by Congressional control versus Presidential you may get a very different result. Fiscal restraint is lost on both parties. The reason for the rise of the Tea Party was that the Republicans lost their way. They would argue that Bush spent like a Democrat. When the liberal solution to a $1 trillion deficit is an $80 billion tax increase, it is hard to take them seriously as the party of fiscal restraint. Also, linking to an article that is not credible does not support your argument. The writer attributes the 2009 deficit to Bush. Bush cannot be responsible for Obama's stimulus. It also makes Bush fully responsible for TARP (yet liberals want to give Obama the credit for saving the economy and the auto bailout). They need to pick one side or the other on that. That budget was also enacted by a liberal Congress. I find it interesting that Obama appears in charts where he looks favorable but not ones where he wouldn't. My favorite lie in the article is when the writer says "President Clinton balanced the budget, giving the government a surplus. Not one single Republican in either house voted for the balanced budget." Since Republicans were the majority in both houses at the time, it is mathematically impossible to be true.

You do realize Berkshire is made up mostly of operating businesses now at this stage? That many of those businesses require enormous amounts of capital, which ultimately do employ tens of thousands, and probably hundreds of thousands over the next 10-15 years. How is expansion in MAE or the largest order of private jets in history at Netjets, not as effective as anyone else at creating jobs and wealth for this country? Berkshire is one of the largest public company employers in the world...that has a net wealth effect that trickles down ten fold. Cheers! And one of the biggest reasons for that is taxes!

Let's talk about the so-called "carried interest scams." I'm sure you are aware that is due to partnership accounting. If a $1 billion fund makes $250 million the managers often receive 20%, or $50 million. The manager's tax is based on the gains. If some is unrealized gain then it is deferred. If LT cap gain then the manger is taxed at that rate and so on. Yes, the manger reduced his/her tax rate below the rate for wages. If carried interest is eliminated all you get is a re-allocation. No net tax gain to the US Treasury. The manager will pay more, but the investors will pay less. The manager will now have wage income, and therefore a higher tax bite. The investors will have higher dividend and cap gain income, since they will now be allocated the portion that had been going to the manager; however the investor will now have a deductible expense equal to the wage income received by the manager.

Sorry, but I think you give Buffett too much credit. He is an incredible investor, but I would not call him a good man or humble. He was not a particularly good husband or father, and those things count for much more than investing. Nor would I call him humble. I would argue that he lacks courage. Our deficit problem is not due to the tax rate on the rich. Buffett's tax proposals amount to about 10% of the gap. He fails to take a stand on real spending or tax reform. The truth of the matter is that the non-rich demand much more in services than they are willing to pay for. You cannot tax the rich enough to fill the gap. Either taxes must rise for all, or the role of government must be reduced (or some significant combination of the two). His proposal for having spending reduced to 21% of GDP (and note he declines to suggest any cuts) and revenue rise to 18.5% (where he once again declines to offer any suggestions for the majority of the needed revenue increase) results in annual deficits of 2.5% of GDP. In his mind if the economy is growing at a similar rate then the deficit is sustainable. To me, it is a foolish proposal. He leaves little margin for error. The occasional recession would result in huge deficits and result in debt rising faster than GDP. Buffett is an incredible investor, but a lousy economist.

Based on prices on eBay ($20 per box) it looks like some people are trying to, and making, a buck out of this: http://www.ebay.com/sch/i.html?_trksid=p5197.m570.l1313&_nkw=twinkies&_sacat=0&_from=R40

It's not that he doesn't like Jack Welch. He's just interjecting in a debate and trying to enlighten...kind of like how everyone on here does! ;D Cheers! Sorry but I still don't see it as a dig. Buffett is trying to get Welch to tell a funny story that Buffett thinks is hilarious yet has nothing to do with why Welch is on the show. Buffett sounds dorky to me. To read into it that he is putting Welch down due to the "your career peaked" quote would be like using Welch's later response of "incentives drive all kinds of behavior" as a dig back towards him and the President. If anything Welch made Buffett look bad by not knowing what Buffett was talking about.

What are you guys talking about? Buffett thought that Welch's story was funny and wanted Welch to tell it to everyone watching CNBC. The humor didn't quite work out because Welch didn't recall the story. You guys are reading way too much into this. this is one of Buffett's many talents - he can take people down so subtlety that some don't even notice it was a take down I'm sorry, but if that was a take down, I found it weak. I thought Warren came off looking silly and out of touch, not Welch. To call in and want Welch to share some supposedly funny story from fifty years ago, which he apparently does not remember, is a bit strange. Even when Warren tried to describe the funny part, it really wasn't. If anything it was implying naivete on the part of women.

There is no disputing that some partisans switch when their party is not popular, just as some true independents become leaners for a few years. While he doesn't push leaners, it is interesting that Rasmussen is seeing something different: http://www.rasmussenreports.com/public_content/archive/mood_of_america_archive/partisan_trends/summary_of_party_affiliation If you compare their numbers to actual election results, Ras picked up the 2006, 2008 and 2010 swing where Gallup's numbers definitely picked up the 2006 swing but not so much in 2008 or 2010. Granted he is not measuring turnout but identification which is different. How doe we make sure we are not locking on to information that confirms our biases versus being objective? This happens in investing just as in politics. That is why it is fascinating to me.

If it weren't for the hoops to open an Intrade account I would have done it. Due to time constraints I would have had to wire money. Since the market is so thin I doubt one could have put a $1,000 to work without significantly moving the numbers. I decided it was not worth my time. But Nate's model is only good as the data he feeds it. So IF there is oversampling of Democrats via oversampling of minorities, then the model will spit out the wrong answer. Maybe it is because I am a Romney supporter but when I dig into the state polls I struggle to believe them. Most imply an electorate that will be more Democrat than 2008 and that seems highly unlikely. Look at 2008 - Obama had a huge advantage due to the economy, his fundraising, his charisma, and his message. Today - he does not have the advantage on the economy, fundraising, or message. There is a lot of evidence that Romney supporters point to that imply victory. Lower early voting numbers for Obama, Romney winning independents nationally, and partisan leanings as measured by Rasmussen are the three biggest. Political preferences aside. The process of sorting through conflicting information (and spin) in order to come to the most probable outcome is fascinating to me.

I'm not a lawyer, but I do manage a fund, and I am fairly certain your suggestion is illegal. If the partnership is formed by non-accredited investors with the sole purpose of investing in a hedge fund it is a violation. Even if it passes that test, it could also be subject to a "look through" in terms of investor count. Meaning if the partnership had ten people the fund would be using up ten slots. Someone please correct me if I am wrong here.

Here is what I found The following schedule will be used to list the 2015 Equity & ETF LEAPS: Monday, September 17, 2012: 2015 LEAPS begin trading for January cycle option classes. (for example, IBM is in the JAN, APR, JUL, OCT Cycle) Monday, October 15, 2012: 2015 LEAPS begin trading for February cycle option classes. (Home Depot - HD is one of the stocks in the FEB, MAY, AUG, NOV Cycle) Monday, November 12, 2012: 2015 LEAPS begin trading for March cycle option classes. (Wal-Mart - WMT is in the MAR, JUN, SEP, DEC Cycle) The week before the new LEAPS are added (e.g. the week of Sep 10 for the Sep 17 LEAPS listings), an Information Circular at cboe.com will list strike prices for LEAPS added Sep 17th. If you look at the listed options you will be able to discern which cycle the stock is on.

Try looking at the figures based on who controls the purse strings (Congress). It gives a completely different result since WWII (I didn't look at the time before that). The market has done noticeably better when Republicans control Congress than when Democrats do. I have always thought it interesting that when Clinton was governor he took credit for Arkansas' economy (during Reagan and Bush presidencies). When president he took credit for the economy (yet Republicans controlled the majority of governorships from 1994 - 2000).

How about we use our morals to take away the right of Christians to practice religion, but allow all other religions in our country? I say that would be tyranny. You would disagree. It's not tyranny, you'd say, because in your language it would be simply "We have to enforce some morals." I'm sorry I thought we were trying to have an intelligent discussion. Clearly I was mistaken. It entered The Twilight Zone stage hours ago when you argued that discrimination was merely a moral viewpoint. I argued no such thing, sorry you got confused. We were discussing Simpson Bowles and then you went into some anti christian thing. Your logic did not make sense so i pursued it. My mistake.

How about we use our morals to take away the right of Christians to practice religion, but allow all other religions in our country? I say that would be tyranny. You would disagree. It's not tyranny, you'd say, because in your language it would be simply "We have to enforce some morals." I'm sorry I thought we were trying to have an intelligent discussion. Clearly I was mistaken.

Eric believes that we should not enforce our morals on others. That it is tyranny. To me, not enforcing our morals would result in no laws and therefore anarchy. We have to enforce some morals. All I am saying is that his argument is flawed.

Ahhh... the slippery slope defense. Very clever! Let me ask you this. How can we justify the legality of marriage between two consenting heterosexual persons? For that logic would... support the legalization of polygamy, prostitution, euthanasia, gambling, drug use, drug sales, drunk driving (as long as no one gets hurt), public drunkenness, indecent exposure (or public nudity), the right to bear arms, duels, elimination of all zoning laws, speeding (as long as no non-consenting adult or his/her property is impacted), etc. Yet how can you reconcile this basic fact. We have in fact legalized heterosexual marriage between two consenting adults and yet we haven't fallen down that slippery path. Eh? My comments are not a slippery slope at all. A slippery slope is typically an argument where one argument leads to another and then another (A to B to C, etc.). What I am saying is that it seems to me that your logic that "one should not enforce our morals on others" should result in you holding those other (libertarian) positions if it is consistent. If you don't hold to those positions, then you probably don't actually believe the argument you made. Or I am missing something? Aren't laws based on morals? Must all laws be in 100% agreement? If it is supported by 99%, isn't that enforcing our morals on the 1%? I guess I don't understand your logic.

My reply is general to all who think this way. Interesting. You call it tyranny when you disagree with them, but I bet that when you agree (in cases such as murder, rape, incest, theft, etc.) you apparently don't consider it tyranny. Would I be correct in presuming that is because you believe there is an innocent victim, in the above examples, which there is? So are you pro-life? Why not? What about partial birth abortions? If not, can a mother kill her one day old? How about a week old? I'm just wanting to see if your logic is consistent. The consenting adult argument basically says it is okay for consenting adults to do whatever they want and none of the government's (society's) business. That logic would support the legalization of polygamy, prostitution, euthanasia, gambling, drug use, drug sales, drunk driving (as long as no one gets hurt), public drunkenness, indecent exposure (or public nudity), the right to bear arms, duels, elimination of all zoning laws, speeding (as long as no non-consenting adult or his/her property is impacted), etc. It would also logically be more in line with limited government and a head tax (same amount per person). How you can you compel another to pay for someone else's healthcare, education, etc. That logically would be using the power of the state to enforce your morals. Are you Ron Paul? :)

I can't vote for Republicans because they advance the agenda of the religious conservatives. Which leaves me with only Obama to vote for. I knew we would get to religion. :) Seriously. Clinton and Obama I were against gay marriage. Not that anyone with a brain believed Obama when he said that (it was clearly a lick your finger and see which direction the wind is blowing flip flop like Romney on abortion). Clinton had "don't ask don't tell" and even signed DOMA. Hard to believe that is the deal breaker. Does that mean abortion is the issue that prevents you from voting Republican? Even if the Supreme Court changed its opinion, which is unlikely, it would become a state issue, and remain legal in the first trimester in most states. Or am I missing something? The Bible thumping religious extremists support the Democrats because... hmm, I can't quite finish that statement, can you help me out? They don't. Outside of the African American community they are steadily moving Republican. No doubt that many conservative Christians vote based on their moral values, just as you apparently do. You are just on opposite sides.