Buffett made $62,855,038 last year

[tooskinneejs]

Here is an article about Warren sharing his tax info for 2010 with Republican Rep. Tim Huelskamp...

 

http://money.cnn.com/2011/10/12/news/economy/buffett_taxes_2010/index.htm?hpt=hp_t2

 

AGI $62,855,038

Taxable income $39,814,784

Tax $6,923,494

 

[biaggio]

Making money on money is  what makes america great.

 

Do we really want to increase taxes on investments?

 

That will result in less investments. I think we need to encourage people to delay gratification,  save and invest more.

 

I love WEB, but his net income is not like ours or most people in this world ie it is almost all passive income.

 

I favor a tax on consumption-everyone else has one. I remember when the GST was introduced here in Canada, everybody hated it but we have all learned to live with it.

 

Don t discourage people from working hard, saving, investing, innovating (new products + services that will make them more money), etc

 

P.S.  he made $62 million -that's awesome and I would say he deserves all of it-everyone here in North America has a chance to and some (owner of the Dallas Mavericks-what's his name?) would say an obligation to (try) do the same.

[brker_guy]

Don't you ever wonder what that Buffett personal portfolio looks like for him to make $63MIL in AGI last year?

 

Also, attached is his letter to the Congressman on his little challenge.

buffett-letter-to-tim-huelskamp-v2.pdf

[beerbaron]

He's probably around 1B in non BRK by now. If I remember correctly in 2008 he was about 500M in cash.

 

BeerBaron

[moore_capital54]

Hes got about $600-700mm outside of BRK based on my estimates. Keep in mind this is from the original $17 or so he had when he closed the partnership... what a guy!

[Hawk4value]

I love Warren, but I believe he is on a guilt trip which is getting the best of him. The foundation of any financial system is savings. The system recycles savings into investments, investments produce savings, and the cycle keeps repeating and mutiplying.  For many years people were not saving (negative savings rate), they were spending more than they earned, and then borrowing and spending more and going into debt, so we had a credit bubble. Fictitious propsperity. Now people are being forced to save because they are deleveraging.  Bottom-line:  we need to incentivize saving and investments. The best way to do this is to eliminate taxes on savings and capital gains. I believe Warren is dead wrong on taxing passive income.

[ubuy2wron]

I do not understand why Warren pays ANY personal income tax, is he not giving away  almost  1 billion of BRK every year.

[tooskinneejs]

"Bottom-line:  we need to incentivize saving and investments. The best way to do this is to eliminate taxes on savings and capital gains."

 

1.  Some might argue that the Federal tax code's purpose isn't to incent behavior but to collect revenues.

 

2.  Maybe people would save if they could earn more than 0.5% interest in a year.

[ERICOPOLY]

Now people are being forced to save because they are deleveraging.  Bottom-line:  we need to incentivize saving and investments. The best way to do this is to eliminate taxes on savings and capital gains.

 

Person A has a debt on his boat and another on his sportscar.  He has no liquid assets to invest.

Person B is a billionaire and has no debts.

 

How does eliminating capital gains tax help person A pay down his debts?  I can see how it helps person B, but person A?

 

Person A already has a large incentive to pay down his debts -- the interest rate on his loans is much higher than interest rates available elsewhere.  Why does changing the capital gains rate have much to do with anything related to deleveraging?

 

[merkhet]

 

 

Now people are being forced to save because they are deleveraging.  Bottom-line:  we need to incentivize saving and investments. The best way to do this is to eliminate taxes on savings and capital gains.

 

 

Person A has a debt on his boat and another on his sportscar.  He has no liquid assets to invest.

Person B is a billionaire and has no debts.

 

How does eliminating capital gains tax help person A pay down his debts?  I can see how it helps person B, but person A?

 

Person A already has a large incentive to pay down his debts -- the interest rate on his loans is much higher than interest rates available elsewhere.  Why does changing the capital gains rate have much to do with anything related to deleveraging?

 

 

Why do most people keep forgetting that Warren's plan was to bring the passive income of the ultra-rich (50,000 people) to 30%-ish rates?  Warren's not dead wrong on taxing passive income since it has little to no effect on those 50,000 people's consumption...

 

The actual plan being touted by the administration is a different plan than the one Warren initially envisioned...

[ERICOPOLY]

I do not understand why Warren pays ANY personal income tax, is he not giving away  almost  1 billion of BRK every year.

 

You may only deduct up to 50% of adjusted gross income for charitable deductions.  Unused deduction is carried forward to the next year.

 

[lethean46]

<<<The 2010 donation to the Gates Foundation was worth around $1.6 billion.

 

http://www.cnbc.com/id/38046115/Warren_Buffett_s_1_6_Billion...

 

Charitable contributions are generally limited to 50% of AGI. But this is a contribution of appreciated stock and will be limited to 30% of AGI. So Mr. Buffett would be able to deduct only $18.9 million of his donation.>>>

 

I found the above explanation at the MF BRK board posted by a guy who usually hangs out on the MF tax board. 

 

ML

 

[Tim Eriksen]

Obama has proposed an increase in rates for the wealthy.  The Senate Democrats have proposed a surtax.  If the problem is that some rich do not pay a high enough percentage, why is no one proposing an AMT (Alternative Minimum Tax) option that says at the end of the day you must pay a minimum of X% of your taxable income?  Wouldn't that be simplest and most logical? 

 

 

[moore_capital54]

Now people are being forced to save because they are deleveraging.  Bottom-line:  we need to incentivize saving and investments. The best way to do this is to eliminate taxes on savings and capital gains.

 

Person A has a debt on his boat and another on his sportscar.  He has no liquid assets to invest.

Person B is a billionaire and has no debts.

 

How does eliminating capital gains tax help person A pay down his debts?  I can see how it helps person B, but person A?

 

Person A already has a large incentive to pay down his debts -- the interest rate on his loans is much higher than interest rates available elsewhere.  Why does changing the capital gains rate have much to do with anything related to deleveraging?

 

Eric I completely disagree with you here, Person A doesn't need to be "helped" he needs to file for bankruptcy. Person A is a cancer on society, and wealth creation! Just my two cents.

[Hawk4value]

Lowering capital gains taxes does not help people who are not investing and I don't think it was ever intended to help these individuals. It is to incentivize people and companies to invest in new ideas and companies which should create more jobs and build a better economy. It keeps a larger float of money in the system recylcing from investment to investment.  Tax the money, and the float decreases.

 

Amen Junto. Could'nt have said it better myself. Unfortunately people look at this issue on the micro level instead of a macro level. The idea is for society to encourage savings and investment from people that have the means to do it. If you do not have discretionary monies for savings or investment than you have to work hard, live within your means, limit your debt, buy a used car instead of a brand new one, rent an apt instead of buying a house, cook at home instead of eating out, etc, etc and so on.  Until you scrape up enough money to take advantage of the savings/investment incentives. In the last number of years the US incentivized consumption and debt-----Result: Big Trouble.    Now I am suggesting the US needs to incentivize savings and investment.    Therefore Warren, God love him,  is as wrong as he can be. 

[ERICOPOLY]

Guys,

I like to keep more of my profits too but in this argument I'm playing the devils advocate.  I'm trying to see where the logic flows.

 

Isn't the lack of final demand the issue that is holding up investment and job creation?

  I believe it has absolutely nothing to do with the capital gains tax rate.

 

Meaning... there is not enough demand to justify an increase in output.  If you produce more, and it just sits there, it's a loss.  So lowering the tax rate makes the loss more enticing?  I'm scratching my head.

 

Having a lower capital gains tax doesn't increase final demand, or does it?  And if we already have excess capacity, then wtf with the lower tax argument?

 

 

 

 

 

 

[ERICOPOLY]

Therefore Warren, God love him,  is as wrong as he can be.

 

I think he expects other capitalists to behave as he would.  He says that if final demand is there, he will invest in expanding production.  Otherwise, he'll sit on his cash until it returns. 

 

Lower capital gains tax policy changes nothing in this time line, except his cash piles up faster.

 

So I don't think he's wrong.  He just thinks that if you have more cash and demand still isn't there, then you'll still be sitting on your cash (you'll just have a softer cushion). 

 

You're not going to go out and waste your extra cash to produce goods that nobody wants.

 

Or would you?  Maybe you disagree with him after all.

 

 

[ERICOPOLY]

Perhaps we need person C and person D.

 

Person C:  capitalist

Person D:  debtor consumer

 

You (might) agree:

Person C will invest when Person D can afford to buy more things.

 

You recommend:

Cutting taxes for Person C so he will invest

 

However,  I say:

Person C won't invest until Person D can afford to buy more things

 

I fear:

Lower tax rates on capital gains will do nothing but make person C accumulate cash faster.  We would likely cut person D's services in order to afford the tax cuts.  Thus you make C better while D is getting even worse off.

 

Instead I think we should try to heal person D.

[Hawk4value]

Eric,

 

When you talk about demand and output what is your reference point??  Is your reference point the demand and output that existed between 2004 and 2007????  If so, this was a debt fueled frenzy that had no basis in reality.  Why, because it collapsed!!  It was what I like to call a fictitious prosperity.  What I am interested in is a sustainable prosperity that is fueled by long term savings and investment, not debt.  Now, humans being what they are, want to be gratified today not tomorrow, sooo we must dampen debt fueled consumption urges by incentivizing responsible behavior. 

[ERICOPOLY]

My reference point is the present.  Watsa says we have excess capacity.

 

Yet you guys think if there were more "float" in the system it would boost investment.

 

You would seriously go out and hire more workers if only taxes were lower?  That's where your argument breaks down.

[txlaw]

I know a lot of people on this board probably aren't so fond of Elizabeth Warren's political perspective, but she is a very well respected commercial law scholar who has done a lot of groundbreaking work on bankruptcy using actual data rather than conjecture.

 

See http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html

and

 

America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

 

Just another perspective on Person D, the real "forgotten man."

 

[ERICOPOLY]

How would a lower capital gains tax rate bring us more innovations like the iPad?

 

For one thing, companies like Microsoft Apple and Google have enough cash to fund any such ideas, and their profits fall under the corporate tax rules rather than capital gains.

 

You guys are throwing out great sounding ideas but you are not explaining how the capital gains tax is standing in the way.  I see only strong assertions.

 

Bill Gates decided to give up on Microsoft in the 1970s because the capital gains tax was too high?

[txlaw]

Going to college and finding a good job no longer guarantee economic safety.

 

Never did and never will.

 

I agree. 

 

Perhaps the more salient point of her presentation is that the notion that people are in debt primarily because of crazy consumption is a half truth at best. 

 

 

[JSArbitrage]

It is the small businesses, innovative corporations, and venture financed firms that will drive growth in this country.

 

Is there any evidence that there was more entrepreneurship under environments with lower capital gains rates?  Because most entrepreneurs I know don't give a hoot about capital gains rates.

[moore_capital54]

Kind of spamming with this but I could not find the HFT thread where I intended to post  (getting old here), anyhow I think this bit of data may even contribute to this thread:

 

"Critics like Mr. Volcker argue that much of modern finance amounts to arbitrage, in which technology and globalization have allowed traders to profit from being the first to notice small price differences. IN the process, Wall Street has captured a growing share of the world’s economic pie — thereby increasing inequality — without doing much to expand the pie. It may even have shrunk the pie, given that a new International Monetary Fund analysis found that higher inequality leads to slower economic growth."