Is Warren Buffett just a mouthpiece for the Democrats to get a tax hike passed?

@bobmnu (8157)
United States
September 21, 2011 1:09am CST
Warren Buffett claims that he pays a lower tax rate than his Office staff. This is a true statement but you have to understand the tax code. His tax is based on his capital gains (the difference between what he paid for a stock and what he sold it for, there is short term Capital Gains which is taxes as income if the investment was held for less than one year, and taxed at 15% if the investment is held for more than a year) or his dividend income (Taxes at 15%). You are taxed on 100% of your gains but can only offset that in losses of a maximum of $3,000 per year. Warren Buffett chooses to take payment from his company in the form of dividends rather than taking a salary (which would be taxed at the highest rate 35%). If Mr Buffett truly believed what he was saying he would take payment for his services as a salary and not as dividends. Take the Dividends earned from investments. A company pays a dividend to the investors on the profits of the company after taxes. Lets say that the company made $1,000,000 in profit. The tax on business is 35% so they pay the government $350,000. The after tax profits dividends are not tax deductible by the company) are paid to the stockholders and they pay 15% tax on their dividend. The government receives %447,500 in taxes from both the corporate profits and the dividend tax so the real tax on the dividends is not 15% or even 35% but rather 44.75%. Just like Social Security for people with another pension Dividends are double taxed. Mr Buffett what is needed is a totally new tax code with fewer deductions and a lower rate but one that everyone pays on all money taken in including the rich who earn interest and dividends and the people who get their money from government programs. That would truly be spreading the sacrifice and seeing that everyone is paying their fair share.
3 responses
• United States
21 Sep 11
Bob, you are correct that we need to change the tax code, but the problem is who will make the new rules? The tax code is so bad because of the politicians who changed it, and many of them are still in office. So, if we have the same people who created this problem, fix the problem then won't we have the same problems? Just a side note: According to the IRS 1,400 American households make over $1 Million dollars, and paid NO taxes. That is the problem with our tax code!!!
1 person likes this
@bobmnu (8157)
• United States
22 Sep 11
My solution would be a spending limit on the Government tied to the Gross National Product. To exceed that limit would require a 2/3 vote of both the House and Senate and the Presidents signature. I would use either a flat tax or a National Sales tax with no deductions or exceptions. Every good and service would be taxed. This way the rich who buy lobster would pay more in taxes. I do not support the Value Added Tax because it is a hidden tax and a tax on a tax. it is important that people know what they are paying in taxes. I know that it is harsh to tax food but once you start with an exception then you open the flood gates for every special interest group to plead their case. Just as you have in Greece where there are more people getting early retirement because of a "Hazardous Job" or high risk job than retire at the normal age.
1 person likes this
@Taskr36 (13963)
• United States
21 Sep 11
I'd rather focus on the entire 75,000,000 who aren't paying any taxes instead of pretending that those 1,400 are the only problem.
• United States
22 Sep 11
Taskr, I am one of those 75 million that don't pay taxes, and that has to do with religion, and political moves. When I was single I was paying 30% of my pay in taxes, now that I am married and have kids I don't pay a dime. Nothing else changed, I actually make a lot more money now, but still pay much less in taxes. I agree that we need to change the tax system, but do we really want the system changed by the people that screwed it up in the first place? And, what is YOUR solution?
@sierras236 (2739)
• United States
21 Sep 11
Somehow, I think Warren Buffett is already regretting his words. Although, his arrogance probably won't let him say so. But if the "Buffett" tax passes, he will likely be one of the first people moving the bulk of his money off-shore.
• United States
23 Sep 11
I wanted to add, the "Buffett" tax wouldn't be just for the "rich." It would affect everyone who gets income from investments. Think about 401K, stocks, and whatever else, people invest money into and receive a return on. Some retirees live off of their "investment" incomes. Another idea that hasn't been completely thought through.
• United States
23 Sep 11
Have you ever listen to Buffet talk? I don't think he has an arrogant bone in his body, as a matter of fact if you did some research on the guy you would see how he is. He admits when he is wrong, the name of his company is a reminder of his worse investment so he never forgets it. He lives in a house that is probably the same size that you do, and the care you drive is probably nicer than his. He doesn't live like most wall street fat cats, the guy lives in Omaha Nebraska. When it comes to moving money off shore, that is a government issue. As long as we allow for money to run our lives, we will have these problems. Everything is about money, just ask the supreme court.
• United States
23 Sep 11
Sierras, here is the problem: these rich people have had time to invest their money in the country and create jobs. They HAVEN'T!!!! So why not move the tax rate back to where it was under Clinton, and see what happens? It work in the 1990's!!!
@ParaTed2k (22940)
• Sheboygan, Wisconsin
21 Sep 11
It's so much smoke and mirrors. He manipulates his income specifically to keep the tax rate down, then compares his entire net worth to his secretary's income to try to make his point. If he wants to cast tax stones, the least he could do is pay his company's back taxes first. What a complete phony!!!