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WEB- New York Times Op-Ed: How to tax the wealthy


philassor
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Just out of the oven:

 

http://www.nytimes.com/2012/11/26/opinion/buffett-a-minimum-tax-for-the-wealthy.html?_r=0

 

Looks like Buffett is trying to preempt the "lobbyists,, lawyers and contribution hungry legislators" by suggesting a minimum

tax above one and ten million of income regardless wether it is a capital gain, a dividend or pay for labor. Bye bye carried interest scams.

 

Cant' wait to hear some ranting from the delusional Ann Randists steeped in self serving bias (even though they lost the election).

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Just out of the oven:

 

http://www.nytimes.com/2012/11/26/opinion/buffett-a-minimum-tax-for-the-wealthy.html?_r=0

 

Looks like Buffett is trying to preempt the "lobbyists,, lawyers and contribution hungry legislators" by suggesting a minimum

tax above one and ten million of income regardless wether it is a capital gain, a dividend or pay for labor. Bye bye carried interest scams.

 

Cant' wait to hear some ranting from the delusional Ann Randists steeped in self serving bias (even though they lost the election).

 

I don't fit in either category but I really like how WB has all these ideas on how to tax the rich.  And people actually praise him for it.  One glaring thing though, he has a history or not eating his own cooking regarding taxes!!!

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"Cant' wait to hear some ranting from the delusional Ann Randists steeped in self serving bias (even though they lost the election)."

 

Yes, yes, it's quite self serving to complain how somehow it's "fair" that 10% of America pays over 50% of total taxes... Liberals live in an effing DREAM WORLD believing the rich should pay more bc the current system somehow isn't "fair." Nobody seeking to enter the middle class is held back from pursuing whatever their dream is bc Buffett pays 15% on his investment income - the only thing holding back those who believe the current system is unfair is their own outlandish selfishness. They need to get the eff over themselves, get of their asses and get to work.

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I wonder why he's leaving out real estate from these discussions.  A person can defer capital gains taxes if an appreciated property is sold and the proceeds are reinvested in another piece of real estate.

 

It seems this is a place where he could point out the inequity in the tax code.  Especially since it would be fun to give a jab to Donald Trump.

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Cant' wait to hear some ranting from the delusional Ann Randists steeped in self serving bias (even though they lost the election).

 

"Ann Randists" lost the election?  You are going to have to explain this one to me.  While I don't consider myself a "Randist" she was dead wrong on a number of important things, I will admit to being heavily influenced by her in my younger years (her first name is Ayn btw).  Reading her fiction then non-fiction works set me on the path to where I am at today.    And I have never won an election.    I actually thought O-bomb-ya was the lesser of two evils in this past one.  Seeing the war mongers that the other guy was surrounding himself with scared the hell out of me.  If I were to lower myself and add my support to the legitimacy of the leviathan by casting a ballot it would have been for Obama not Romney. Luckily I am still free to register my dessent by staying home.

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Just out of the oven:

 

http://www.nytimes.com/2012/11/26/opinion/buffett-a-minimum-tax-for-the-wealthy.html?_r=0

 

Looks like Buffett is trying to preempt the "lobbyists,, lawyers and contribution hungry legislators" by suggesting a minimum

tax above one and ten million of income regardless wether it is a capital gain, a dividend or pay for labor. Bye bye carried interest scams.

 

Cant' wait to hear some ranting from the delusional Ann Randists steeped in self serving bias (even though they lost the election).

 

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. 

 

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To the uninformed, Buffett makes it sound like that "carried interest" is somehow a new evil that needs to be taken care of immediately. What he fails to mention, is that he would never have had the career that he has had without it. He would never have been as rich as he is today if he had been subject to a 70% tax rate on effectively investment counsel type of work during his partnership years.

 

Instead, he was taxed at 27.5% on his cut of the money that he made for others using carried interest. It is also interesting to read in the biography by Lowenstein that Buffett knew the tax code inside and out. Why is that? To ensure that he paid as much tax as possible or to exploit some aspects of it? Totally legal, but who is he to lecture people today on carried interest? Here is a good article about carried interest by the way:

 

http://www.bloomberg.com/news/2012-01-30/if-carried-interest-irks-you-don-t-get-it-commentary-by-william-dantzler.html

 

So what should be proposed instead is to raise the capital gains rate on everyone, but here again, I would love to know what were States tax on capital gains at the time. If they were 0% in Nebraska at the time, then the difference with someone living in New York State currently is not that dramatic with a combined 24%.

 

"Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P. "

 

While it is better than the numbers today, it still does not cut it in my view and these 2 numbers should be reversed to at least repay some debt over time. Just like it would be done at Berkshire or with any good family.

 

I am quite disappointed by Buffett going down the route of simply taxing more to fix issues and to apply it on the very rich only. While I am not a beneficiary of "carried interest", not American and certainly not in the very rich category, it is clear that the governments down there are spending well beyond their means. And I am certain that a very large chunk of it is going to waste.

 

What is next? Seizing assets from the rich to help pay for all these entitlement programs. It will be the only way to raise revenues if this thing goes too far, since the rich will simply do like Buffett and never sell any stock to not trigger taxes.

 

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