cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Veteran Advisor

'Buffet' tax

FYI, Obama has proposed a tax increase on the wealthy.  Here are a few details:

 

http://www.reuters.com/article/2011/09/18/us-usa-debt-obama-idUSTRE78G2K320110918?feedType=RSS&feedN...

 

 

35 Replies
Highlighted
Senior Advisor

Re: 'Buffet' tax

But Warren won't pay it, his lawyers will fix things for him.

Highlighted
Veteran Advisor

Re: 'Buffet' tax

Word on the street here in Nebraska is that he and/or his company owes over $1 billion in taxes he hasn't paid yet.  It seems his lawyers are 'in negotiation' with the IRS over the details of it, and should have it settled within the next several monts.

Comparitively speaking, I wonder if I owed a couple thousand, how many months I'd have to pay, without adding up more penalties & interest?  It would probably be as easy for him to come up with a billion as I could $2500.

The story going around is that his money is in either a tax-exempt trust, or still in stock in his company.  Since his B-H stocks when he got them were worth something like $15 or $18 when he got them, and are now worth in the six-digit range the tax on coming up with the money would cost him a possible extra couple hundred million, which he would have to get by breaking a tax-exempt trust, or cashing in more shares, which would cost another few million in taxes, which he would have to get by either breaking into a trust, or cashing in more shares, etc, etc.

 

I wonder just how low our deficit would actually be, if only the super rich, and those in Congress would pay their fair share (don't even get me started on Congress members who shirked taxes).

Highlighted
Senior Advisor

Re: 'Buffet' tax

Warren says he personally files his tax return. He doesn't even employ a CPA. HIs words not mine.

 

BE aware that the bulk of his income and growth is in capital gains both realized and unrealized until he sells the assets. Thus he has one huge personal IRA type investment that keep growing without taxation. I believe that Warren paid 7 million in personal income taxes in 2010. Thus his return is very simple in that his income is derived from Berkshire Hathaway in the form of capital gains taxes.

Highlighted
Senior Advisor

Re: 'Buffet' tax

snip-

Warren Buffett’s Berkshire Hathaway Corporation paid $5.6 billion in corporate taxes last year on income of $19 billion, a 29 percent rate. (By the way, its tax form ran to 14,097 pages; just imagine what its tax compliance costs must have been.) Warren Buffett owns about 30 percent of Berkshire Hathaway, so he, in a very real sense, paid not just the $6 million in federal taxes he claimed in his Times article, but $1.68 billion more in the form of corporate taxes. But Berkshire Hathaway pays no dividend and I doubt that Buffett has sold any of his stock in the company. Thus he has no capital gains to report from his Berkshire Hathaway holdings.

So while he paid, roughly, the same effective tax rate as his secretary if you count his share of the corporate taxes paid (and you should), he would not owe much more under President Obama’s stick-it-to-the rich plan. Most of his billionaire friends wouldn’t either.  Those most affected would be the upper middle class, as usual, who don’t control the corporations they invest in.

 

http://www.commentarymagazine.com/2011/09/18/a-tax-on-excess-wealth-creation/

 

Highlighted
Senior Advisor

Re: 'Buffet' tax

He didn't pay the corporate taxes. Berkshire Hathaway did. He didn't cut the check for it. The company did. If you don't like corporate tax rates, sell your stock and pay ordinary income tax rates like everyone else. At Least Warren can see the inequities in the tax code as will anyone with an ounce of logic.

Highlighted
Senior Advisor

Re: 'Buffet' tax

If the corp didn't have to pay the tax who would have gotten the money?

Highlighted
Honored Advisor

Re: 'Buffet' tax

http://www.forbes.com/sites/timworstall/2011/08/15/warren-buffetts-very-strange-tax-argument/2/    

As I say above, given the qualifications that Buffett uses he’s correct: by including only federal personal income tax and payroll taxes his average tax rate is that 17.4%. But where he’s made the queen disappear in this game of three card monte is in his ignoring the effect of the corporate income tax on his dividends. They’re taxed at the corporate level before they’re distributed, giving an average tax rate of more like 50% than the 17.4% he’s quoting.   -   See, Don you liberals should drop this tax cheat turkey Buffett like a cheap suit.

Highlighted
Veteran Advisor

Re: 'Buffet' tax

The way I understand it, Berkshire Hathaway, through some sort of tax law gymnastics doesn't pay a dividend tax like the bast majority of corps because Buffet has it set up to never pay a dividend.  Since the dividend does not exist, there is no tax in it.  However, I don't know how they can shelter the dividends from the other corporations that B-H has stock in, and do it legally.  Then again, maybe they can't, and that is why they owe the billion dollars in back taxes.

Highlighted
Veteran Advisor

Re: 'Buffet' tax

Corp taxes are higher than 50%????  I thought we had the second highest with Japan having the highest at 40%.