Buffett's Doublespeak On Taxes

[nathanm]

So it's perfectly okay by you if people conflate the issue of Romney and Bain?

How is it conflating when the major and very hands-on stakeholder in one of the largest PEF's advocates for higher taxes on one hand and employing schemes to lower them on another?  I thought the idea is to overcome the massive deficits and debt, unless the whole idea is for people like Buffett to pay more taxes so the underclasses can feel better.

I don't see any hypocrisy in paying what is asked, even as you advocate that more be asked of you.

Are people saying Romney is somehow bad because of Bain itself or because of what he did while he was at Bain?

[Teatownclown]

No Nate. They vilify Mitty because he's a Mormon....they'd never admit to it though...just like Obama and his skin color
war on the rich.

I'm amused at how many posties are defending the %1. Rather clueless and not too sincere about balancing the budget.

Just sitting around until after the election to see how we go back to pre-Bush. Meanwhile, ya'll wasting your time.

[Conan71]

I don't see any hypocrisy in paying what is asked, even as you advocate that more be asked of you.

Are people saying Romney is somehow bad because of Bain itself or because of what he did while he was at Bain?

That's the point though, Buffett has employed a cadre of accountants and attorney's to avoid paying the government what has been asked of Berkshire.

[Conan71]

No Nate. They vilify Mitty because he's a Mormon....they'd never admit to it though...just like Obama and his skin color
war on the rich.

I'm amused at how many posties are defending the %1. Rather clueless and not too sincere about balancing the budget.

Just sitting around until after the election to see how we go back to pre-Bush. Meanwhile, ya'll wasting your time.

It's not the black thing about Obama for me.  I hate angry white guys.  He is 1/2 white and is angry at the upper crust.  Ironically, he will be one of the 1%'ers when he's fired in 2012 after he leaves office.

Who's defending them?  I'm simply pointing out the folly in Buffett as being some paragon of tax fairness.

[Teatownclown]

It's not the black thing about Obama for me.  I hate angry white guys.  He is 1/2 white and is angry at the upper crust.  Ironically, he will be one of the 1%'ers when he's fired in 2012 after he leaves office.

Who's defending them?  I'm simply pointing out the folly in Buffett as being some paragon of tax fairness.

You and every other fright wingnut talk host....today's jabber is all about Buffet's secretary. Talk about having no material.

No originality, either. And you better work on flexibility if you have some. 

You fear the runs? 

[Conan71]

And you better work on flexibility if you have some. 

I haven't been to yoga in ages, so no.

[nathanm]

That's the point though, Buffett has employed a cadre of accountants and attorney's to avoid paying the government what has been asked of Berkshire.

If you can avoid it legally, you haven't been asked to pay it. For example, a person taking the mortgage interest deduction is still paying what was asked of them. It may be that they were not asked for as much as they should have been, but that's a different question entirely.

Also, you appear to misunderstand the point. Buffett does not say he pays enough taxes. He says he and those like him pay too little. I don't know why you expected him to be a paragon of fairness when the entire conversation is about how he doesn't pay as much as he ought to in taxes.

I'm still not sure why hedge fund managers get a lower rate than the part of the 1% who actually start and run productive nonfinancial businesses.

[heironymouspasparagus]

That's the point though, Buffett has employed a cadre of accountants and attorney's to avoid paying the government what has been asked of Berkshire.

Again...

Because you are completely avoiding the fact that he has a fiduciary responsibility to the shareholders to find and use every little nook and cranny of the tax code!  As you know, if he didn't, then he would be held responsible to those same.

There is no moral conflict nor hypocrisy when he uses the tax code the way it has been defined that he is required to use it, and also say that it needs fixin'.  Another point in the "as you already know" category.

[AquaMan]

He owns 30% of Berkshire. Not all of it. As a stockholder he gets to avoid personal responsibility for the corporations actions. That is a benefit. He may or may not receive a dividend (though with such a large share he certainly has influence). That is a benefit. Corporations are considered people. They are responsible for paying their taxes. Buffet is responsible for paying his own taxes. The corporation has a responsibility to minimize its costs, including taxes, as much as possible for its stockholders, just like they have a responsibility to maximize its profits. Buffet is only responsible to himself. These are the facts.

So, Buffet basically is not paying taxes twice as Conan and the new script from the right alleges. Neither are any other stockholders. Taxes are a cost of doing business that the government exacts to offset the use of the people's resources that the corporation uses to make private profit. Stuff like roads, bridges, lighting, air etc.

This is not all that complex and the right is using the lack of knowledge of the public to spin this into some sort of hypocrisy. Its not.

[Gaspar]

He owns 30% of Berkshire. Not all of it. As a stockholder he gets to avoid personal responsibility for the corporations actions. That is a benefit. He may or may not receive a dividend (though with such a large share he certainly has influence). That is a benefit. Corporations are considered people. They are responsible for paying their taxes. Buffet is responsible for paying his own taxes. The corporation has a responsibility to minimize its costs, including taxes, as much as possible for its stockholders, just like they have a responsibility to maximize its profits. Buffet is only responsible to himself. These are the facts.

So, Buffet basically is not paying taxes twice as Conan and the new script from the right alleges. Neither are any other stockholders. Taxes are a cost of doing business that the government exacts to offset the use of the people's resources that the corporation uses to make private profit. Stuff like roads, bridges, lighting, air etc.

This is not all that complex and the right is using the lack of knowledge of the public to spin this into some sort of hypocrisy. Its not.

How does that work?

I own part of a company, my profits from that company are taxed at a rate of 35%.  I have the right to participate in corporate governance.  I am only taxed once.  This pays for the public resources this company enjoys.  The remainder of that profit is mine to keep or reinvest in the company.  My real tax rate is 35%.

I also own part of several other companies to varying extents.  I have the right and responsibility to participate in corporate governance for those companies too.  My profits from those companies are taxed at 35%.  This pays for the public resources these companies enjoy.  The remainder of that profit is then taxed a second time at 15% before I can keep or reinvest that money.  My real tax rate is 50%. 

Where is the spin?

[AquaMan]

I own part of a company, my profits from that company are taxed at a rate of 35%.

Where is the spin?

Let's take it one spin at a time.

Untrue. It is not your company (if we're talking corporation and not partnership). They are not your profits. It is the corporation's profits. The corporation made a profit that they may or may not share with stockholders like yourself depending upon your agreement.

If they don't share them, and yet are taxed on them, would you say you were taxed twice? No. Would you take that loss of profit sharing off your taxes? No. Because they weren't your profits to begin with.

That person, the corporation, made a deal with you to sell a portion of his business. His business is in effect, his personhood.

[AquaMan]

How does that work?

I also own part of several other companies to varying extents.  I have the right and responsibility to participate in corporate governance for those companies too.  My profits from those companies are taxed at 35%.  This pays for the public resources these companies enjoy.  The remainder of that profit is then taxed a second time at 15% before I can keep or reinvest that money.  My real tax rate is 50%.

This again is based on your assumption that you own the company. You own a fractional part of a corporation with an agreement that may or may not involve a share of its profit. The corporation's profit. You may have some say as to whether a dividend is paid but that is also spelled out in your agreement and is by no means a responsibility. You take a risk that the company will prosper and share its wealth with you but mostly you are hoping it prospers and its shares all become more valuable on the open market.

IMO, many people confuse this agreement with marketing that implies they are the real owners of the corporation and that they are making money "the old fashioned way....earning it." In fact they are simply low level gamblers and the corporations are bookies.

[Gaspar]

Let's take it one spin at a time.

Untrue. It is not your company (if we're talking corporation and not partnership). They are not your profits. It is the corporation's profits. The corporation made a profit that they may or may not share with stockholders like yourself depending upon your agreement.

If they don't share them, and yet are taxed on them, would you say you were taxed twice? No. Would you take that loss of profit sharing off your taxes? No. Because they weren't your profits to begin with.

That person, the corporation, made a deal with you to sell a portion of his business. His business is in effect, his personhood.

You are not making sense. The profit amount is taxed twice. There is no mechanism to disassociate corporate ownership from being a stockholder.

[AquaMan]

You are not making sense. The profit amount is taxed twice. There is no mechanism to disassociate corporate ownership from being a stockholder.

That's funny. I just heard a discussion of this new script on NPR with someone like yourself across from two other qualified guests. They called his assertions "nonsense" and "indefensible". He was pimping his book on the subject and espousing eliminating all corporate taxation. You writing a book?

And, are you going to write off your lost income on your taxes this year from not receiving a share of your company's profits? Cause if they are being taxed on your income then the loss of that income should certainly be deductible. I think that's either under gambling losses or losses from theft.

[Teatownclown]

There are ways to avoid it being taxed at the corporate level. MLP's are allowed to distribute profits as return of capital lowering your basis in the event you sell then the tax is based on cap gains rate if held for the one year period. REIT's are capital intensive and shelter much of their income through depreciation.