Well Written Article by Warren Buffett Today

[Gaspar]

Stop Coddling the Super-Rich
http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?src=tp&smid=fb-share

I actually agree with him.  Especially the points he make about "percentages."  

Because of the way the income tax system works, fairness is out of the equation.  The system needs to be simplified and the burden shifted to the usage side rather than the income side of the calculation.

There are essentially three ways you can tax a person.  You can tax on income, on use, or on worth.  The United States does not tax on worth, because that represents taxation on money that has already been taxed.  We also don't want to penalize people for saving; however, income and worth can in many cases be blended and blurred.  With complex investment mechanisms and deductions, it is possible for people like Mr. Buffett to shelter income from taxation.  In fact, Birkshire Hathaway, Mr. Buffett's company, employs an entire team of accountants who's job is to do exactly that, shelter income from taxation.  

Even as his tax attorneys and accountants work diligently to make sure he always pays less than "his fair share," he complains that he is not being charged enough.  We know that Mr. Buffett likes to play political games, and this article, while well written, is nothing more than that.  I would rather see a press release announcing a gift of $7,000,000 to the federal government from Mr. Buffet.  This would make a far stronger political statement and perhaps encourage the "super-rich" to follow suit.  Of course we know this won't happen.  The sole purpose of this article is to fan the class warfare fires as President Obama sets out on his bus tour of the Midwest.

I applaud the campaign on this strategy, and Mr. Axelrod Buffett makes some excellent points that indeed need to be addressed, but not by adding additional layers of taxation or regulation to the 6,000 pages plus of federal income tax code.  As I think most of you, liberal and conservative alike, will agree, the current tax code no longer functions appropriately.  It is a leviathan that must be constantly fed with new regulations and bureaucracy yielding less and less equality.  Each new layer breeds a thousand new cockroaches to lay more eggs and make the code even more complex.

It has become so bad that a significant amount of the US economy exists solely to prepare, file, and defend taxation.  This is an entire economic segment designed to interpret and do battle with a branch of the US Government (IRS).  Even the most brilliant economic minds in the whole universe, like our treasury secretary, Timothy Geithner, can't file a return without significant error.

We don't need to adjust the system again (for the 487th time).  We need to fundamentally rebuild it, and remove politics from the equation.

[we vs us]

http://givingpledge.org/#warren_buffett

[Red Arrow]

http://givingpledge.org/#warren_buffett

Noble but not the same as sending money to the government directly.

[Gaspar]

Noble but not the same as sending money to the government directly.

That's right.  He is asking that the government take more, therefore he needs to be the example or his words hollow. 

[TheArtist]

  I would want there to be a level playing field among my peers.  I enjoy the game of competition and money making, but that game is most fairly played when we are all toughing it out under the same conditions.  Plus, just me alone with a few others won't assure the amount of change that needs to happen NOW, and thats what we really need is a big level of assurance, not, Ok I will do it (with no guarantee for how long even with my best intentions you can't rely on me alone for who knows I may lose money but in the aggregate there is more assurance) anyone else with me, "game" going on.  The national government can't project future budgets, figure out future outlays and assure future payments on that. There needs to be a REAL, significant, aggregate number thats more predictable and measurable over the long term.

[Gaspar]

  I would want there to be a level playing field among my peers.  I enjoy the game of competition and money making, but that game is most fairly played when we are all toughing it out under the same conditions.  Plus, just me alone with a few others won't assure the amount of change that needs to happen now, and thats what we really need is a big level of assurance, not, Ok I will do it (with no guarantee for how long even with my best intentions you can't rely on me alone for who knows I may lose money but in the aggregate there is more assurance) anyone else with me, game going on.  The government can't project future budgets, figure out future outlays and assure future payments on that. There needs to be a significant, aggregate number thats more predictable and measurable over the long term.

Here is why this is simply a campaign stunt.  Lets say that congress goes for it 100% and President Obama gets his tax increases on those makeing $250,000 or more. 

This would bring in merely $0.7 trillion over the next decade, or about 0.4 percent of Gross Domestic Product per year. As a comparison, the Congressional Budget Office estimates that the deficit over the same period is going to grow more than 6 percent of GDP per year.

Lets say you add Buffett's recommendations on significant increases for the super-rich.  Well, that's only a tiny fraction of the population and a few extra billion in revenue.  Meanwhile while the administration plays the class warfare game, they still spend a hundred times more than that.

The administration has no intention of cutting spending as has been demonstrated by the debt debate. The idea now is to wave a red cape again so that the bull focuses on it rather than the matador. President Obama knows that congress will never allow a tax increase on anyone in a recession (that would be insane), but the battle is an easy one for President Obama to campaign on.  It is the same battle he has always waged, from his beginnings as a Community Organizer. 

Work inside the system. Mobilize the people against a cause (in this case the filthy rich).   Make the people feel so frustrated, so defeated, so lost, so futureless in the prevailing system that they are willing to let go of the past and change the future.  Demonize your target through ridicule.  It's all standard Alinsky.

Unfortunately, it will do nothing to solve the problem, but it will motivate the liberal base.  We can only hope that they have learned from this experiment and become a bit more leery of this tactic.  It's not playing as well in the media as I think they had hoped.  Mr. Axelrod Buffett's article really didn't pack any punch without a true gesture by Buffett himself.

[we vs us]

That's right.  He is asking that the government take more, therefore he needs to be the example or his words hollow. 

This whole "why don't you go ahead and pay more taxes yourself then, neener neener neener" childishness is just . . . childish.  Taxes work because a cohort not an individual pays them.  Even with the superrich (whom Buffet describes as making $1mil or more a year, not the $250k you claim), it's simply more efficient and fair if everyone gets assessed at once. "Going first" has no utility whatsoever in economic or policy terms.  It just makes you feel better so can say neener neener neener again.

Likewise, I posted the giving pledge link simply to prove that Buffet's money is where his mouth is. His money is going away one way or the other as are the fortunes of the 75-odd other families who signed the pledge. In other words, the op-ed isn't some sort of bizarre gambit to do a reverse-double-lutz jujitsu move to somehow further protect his fortune.  He's making an argument from a policy standpoint.  I'd sure love it if you could refute it from a policy standpoint as well, rather than spending this entire thread trying to prove that he's a moron.

[Gaspar]

This whole "why don't you go ahead and pay more taxes yourself then, neener neener neener" childishness is just . . . childish.  Taxes work because a cohort not an individual pays them.  Even with the superrich (whom Buffet describes as making $1mil or more a year, not the $250k you claim), it's simply more efficient and fair if everyone gets assessed at once. "Going first" has no utility whatsoever in economic or policy terms.  It just makes you feel better so can say neener neener neener again.

Likewise, I posted the giving pledge link simply to prove that Buffet's money is where his mouth is. His money is going away one way or the other as are the fortunes of the 75-odd other families who signed the pledge. In other words, the op-ed isn't some sort of bizarre gambit to do a reverse-double-lutz jujitsu move to somehow further protect his fortune.  He's making an argument from a policy standpoint.  I'd sure love it if you could refute it from a policy standpoint as well, rather than spending this entire thread trying to prove that he's a moron.

Good Lord!  I don't think he's a moron.  I admire him on many levels, but becoming a tool for class warfare is not one of them.  The tone of the article as well as the tone of the current administration is that if we tax the rich more, everything will be ok.  Well, that is simply not true.  If it was sustainable to tax the rich at 100% it would not be enough revenue to make a difference.  Even if you go beyond that and take 100% of the taxable income of those who make more than $100k, you only come up with $3.4 trillion. Not enough to pay for the President's planned spending of $3.6 trillion this year.

We need to focus on the problem, and the problem is that we are spending too much.  We don't need to focus on how we can get a bigger credit card or who we can fleece, because if we do, the problem will simply grow.

We are in a spending driven crisis, and more warfare against businesses, the rich, and other groups simply adds to the level of economic uncertainty and market chaos that keeps companies from hiring.

[we vs us]

We need to focus on the problem, and the problem is that we are spending too much. 

In actuality, the problem is that tax receipts are down, and 10% of the working population is unemployed.  Also, the rich are being taxed at historic lows, even in comparison with the historic lows of other income brackets.

Spending, all told, isn't up by much, and what increases there are are entirely related to income security programs (food stamps, UI, etc) The debt is up because we're taking in less to cover it.

[Gaspar]

In actuality, the problem is that tax receipts are down, and 10% of the working population is unemployed.  Also, the rich are being taxed at historic lows, even in comparison with the historic lows of other income brackets.

Spending, all told, isn't up by much, and what increases there are are entirely related to income security programs (food stamps, UI, etc) The debt is up because we're taking in less to cover it.

Spending as a % of GDP is what needs to be focused on.  Spending alone is a useless indicator.  I agree that revenue is a problem, but hanging a yolk on the rich is not enough to cover the nut.  They represent a very small portion of taxable income.  They do however make a nice target and distraction.

[TheArtist]

 You can holler class warfare if you want and none of us can stop some politician or other public figure from taking advantage of any chance to push their agenda. But regardless of all the posturing, we do imo, still need to both cut spending and raise some taxes.  Last week there was an article about an Oklahoma Republican throwing a fit about finding out that the federal government spent 5mill a year helping other countries preserve historic buildings. Small as that may be in the big picture, I thought it sounded stupid too and needed to be cut.  Million here a billion there and soon your talking real money lol. 

[rdj]

Does that graph mean that households making $100-200k are the new middle class?

[JCnOwasso]

Here is why this is simply a campaign stunt.  Lets say that congress goes for it 100% and President Obama gets his tax increases on Bush tax cuts repealed for those makeing $250,000 or more. 

First, I fixed a little of what you stated.  Second, the graph you posted is a little misleading.  I believe it says the total taxable income based upon the Adjusted Gross Income, something about that doesn't sit quite right. 

Buffett has pretty much always stated that he does not get taxed enough.  And he employs a team of accountants to make sure he is not paying more than he is required to pay.  Buffett is a cheap bastage, he is only going to pay what he is required to pay.  He is going to take full advantage of what is available to him, this is why he is one of the wealthiest people in the world.  If he is required to pay more tax, he will pay more tax.  He is not going to simply decide to not take a deduction because he doesn't think he is taxed enough.  It would be like any of us deciding we are not going to take the child deduction because we are getting a big refund. 

[AquaMan]

One has to believe that Buffet has been conspiring with Obama and the dems for a long time to buy into what Gas is alleging. And then swallow that the other super rich are also in on the deal since Buffet is not the only one making these remarks.

It is a single minded, uwavering tenet of the new right that every change in the tax code that results in increased revenues, must by default, be a tax increase. This blindered approach makes them look silly to others but fits right in with a faith based personality.

An example of this mentality was an interview with a stock analyst on Fox last Sunday where the analyst noted that European stocks were a good buy right now because they are already facing problems that our Congress refuses to. They acknowledge what WevsUs pointed out the root causes of the crisis are and the market sees movement to meet those challenges (his opinion, not mine) which make there stocks a good buy.  Demand exists and the future is bright. So he noted that he bought when the market in America fell last week and he is buying now in Europe.

All the host could say was, "But the population over there doesn't get it yet do they? Until they understand (like the right here does) that this crisis comes from high taxes and social spending how are there stocks a good buy?" The guy just smiled.

[heironymouspasparagus]

Buffet has been saying this for years.  (I have been harping on it here for what - almost 2 years?)

There is no such thing as a "tax increase" in letting the Bush cuts expire - it is simply going back to the status quo before the richest got their paid representatives to cut them some slack.

Class Warfare.  Right.  Like the poor ever did any of that.  Maybe Buffet is just the first to become so embarrassed by the class warfare the richest have waged on America for 30 years, he feels it's time to slow it down.  Remember how Newt and the boys made their "Contract On America"?

Also, there is no such thing as a "Social Security entitlement".    An entitlement would imply something that you expect to get for free.  That AIN"T Social Security, no matter what the Murdochian/Cheney/Rove cabal would have you believe.  It is a retirement plan that the majority pay into over their career.  No one considers themselves "entitled" - except for the richest rich - they have PAID for it!!

Wouldn't it be nice (and a refreshing change) if Fox would just tell the truth for once??