My gripe with Warren is that if he cares about our society he should do more than write an occasional editorial. He should invest his money in our elections or media like so many of the right wing rich do. I know. George Soros, but the money spent by the rich right far exceeds the money spent by the fewer rich lefties. In addition much of the money is spent like the Gates money (not that Gates is a lefty!). It goes to ameliorate symptoms of the right wing takeover of government-- food pantries, aids medications, remedial education etc. The rich liberals should use their money to invest in media and polticians like som many of the righ wing rich do. The potential to solve problems by a humanitarian government far exceeds that of the relatively few rich who donate to charity.
I don't pay taxes on compounding investments. You only pay the tax when you cash in and move from one investment to another.
Not entirely true (Dividends), and it does lessen the amount you have to invest in something else after you've sold said investment.
I agree with Buffett politically, worked for one of his companies for eight years and respect his estate gift to the Gates Foundation; but there's rich, super-rich and then there's freaking sovereign.
No one wants to pay more taxes. But, sometimes you have to do things you don't want. When one of the greatest financial minds of all time (not to mention one of the wealthiest) comes out and says taxes on the rich need to rise, you should probably listen to him. All these politicians who probably studied political science or law know maybe 1/10% of what Buffet knows in regards to economics. Listen to the man, he's not going to steer you wrong.
Oh please, people have this tendency to give Warren Buffett much more credit than he deserves. As robbie already mentioned, I have an acquaintance at the IRS who would be more than willing to his money; and that is if you even ignore then voluntary hotline. Here's a man that unlike say, Lloyd Blankfein at everybody's favourite firm, knows the value of good PR. People don't give a **** about realities when you say all the right things. Let's examine Warren's track record shall we? Here's a man who called derivatives the weapons of mass financial destruction, incidentally one that he dabbles in right now. He lashes out at the leverage at major banks (not without reason) yet is adding more leverage himself. He and his buddy Bill Gates call for tax hikes for the rich back during the Bush tax cuts debate yet he derives most of his income from LTCG and LT dividends. Also interestingly, had the Bush cuts expired, Warren and Bill would go back to paying 39.6% marginal tax on dividends whereas Obama's grand bargain would have capped LTCG and LT dividends at 20% (39.6% still for salary). So needless to say, I was not at all shocked to see Warren and Bill support the plan (which would have capped their tax liabilities to a lower level as supposed to the full hike) but of course Bill's buddy Steve Ballmer (who actually draws salary) was against it. It's really not Warren's fault that he paid so "little" taxes than he wanted. I mean c'mon, it's clearly all his tax accountant's fault. He's too brilliant and of course, quite secretive behind the scenes. There's also of course his little bank investments. Supposedly Warren hates all banks except Goldman Sachs, which interestingly gave him quite a return. No of course I'm not suggesting that Goldman bribed Warren. Nope, not at all. But ostensibly every bank was some combination of ****, fraudsters, etc except Goldman. And of course, people tend to mark Goldman as an exception because they have this tendency to forget that just like Warren didn't get bought by Goldman, there was this little matter involving John Gutfreund at a little firm called Salomon Brothers (little as in just the biggest investment bank at the time) in the early '90's. Nope, he didn't get bought out at all. He was all buddies buddies with John Gutfreund and full of praises for Salomon Brothers, which purely coincidentally until it became clear that Salomon was going down the crap-shoot and all of sudden Warren and John weren't all buddy buddy any more and had quite a few choice words for Salomon. Of course, I'm not suggesting at all that Warren picked his money over loyalty by tossing Gutfreund under the bus. Nope, not at all. And that fact that he got more money by tossing Gutfreund the bus was also, purely coincidental. Oh no, Warren's not like Lloyd Blankfein at all. He's more like the silver-tongued Jamie Dimon over at JP MorganChase. And I definitely trust Warren as much as I trust Lloyd Blankfein. I can clearly see where their motivations (money) lie.
Dividends are a small part of any investment strategy though....And usually aren't a major factor in deciding if you will invest - in fact it can be a negative factor. But the idea of selling investments and reinvesting is contrary to the idea of "long term" investing. usually if you are putting in and pulling money in a market, you're not an investor but a day-trader or whatever. The "job creators" are the ones who make the 10 year investments, not the 2 month ones.
So, just to be clear ... what's the excuse for dismissing this? Warren Buffet's a liar? Is that the excuse this time?
His idea of raising taxes on the 280k or so households making more than $1mil per year barely raises any money.
The value of money is defined by the things it can buy. It seems that all these guns or butter, capitalist/socialist arguments fail to designate a resulting relative value for money. The bottom line for every one seems to a numerical value and not a relative value. Extreme examples are easy: Cutting spending on law enforcement and a millionaire would have to spend a greater percentage of his wealth on private security. Cutting social services could lead to rioting that might wipe out his small business. Cut the EPA and he might spend more on healthcare, Cut defense spending and the dollar might not be the worlds fiat currency and could be devalued drastically by outside sources. Even self-made Millionaires and billionaires do not exist in a vacuum; by definition they live within a society that allows them to succeed. To not contribute and nurture that society is a self-destructive strategy.
"Oh please," to you, sir! This argument--that rich people who call for higher taxes somehow aren't credible unless they commit an act of financial self-immolation--is tired and, frankly, wrong. It's nothing but a bit of rhetorical flourish that sounds nice (you couldn't even get that part right) but doesn't stand up to even the slightest scrutiny.
I was listening to a midday talk-show on NPR (NPR of all places!) and they had commentators and callers saying Buffett had no credibility because he hasn't voluntarily given the Federal Government piles of extra money himself. And, I thought to myself, "at least the bbs doesn't have anyone who would employ such a weak argument." Until now I guess. Buffett paying 35% instead of 17% would have no discernible effect on our nation's bookkeeping. If it isn't decreed and enforced, there's no point at all. There's nothing shared (or effective) about that sacrifice. Do you really think that Buffett would be kicking himself for writing this article if people took him seriously and raised his tax rates?
pat buchannon was making this argument as well. i really couldn't believe someone gets paid for that type of analysis
The free market has valued Buffet's wisdom: Lunch with Warren Buffett auctioned off for more than $2.6M for Glide Foundation http://www.sfexaminer.com/local/bay-area/2011/06/lunch-warren-buffet-auctioned-more-26m-glide The online charity auction, which started at $25,000 on June 5, ended Friday night at $2,345,678.
Just that his claims never seem consistent with his actions. But like I said, that may or may not be purely coincidental, but he sure talk a big game. It's a pretty good gambit. If you actually took the tough actions you might actually take a hit in the polls. If you look at the current CBO budget deficit, it'll be down (as in down from now) to only $763 billion in 2021. Oh yeah, break out the champagne. Well, except it kinda assumed real GDP growth of 3.1% in 2011, 2.8% in 2012 and 3.4% from 2013 to 2016. Oops. Better catch up. Of course, the CBO baseline number is also based on CURRENT LAW ASSUMPTION, meaning for example that the Bush cuts WILL EXPIRE. So there you have it. Assuming the Bush cuts expire, you have a deficit of $763 billion in 2021. Last time I checked, neither party is much interested in actually letting the Bush cuts expire for at least the vast segments of the population. You know where the cuts/hikes have to be. It's not getting down. It isn't just taxes is it? I do find it amusing that you ignored pretty much everything else in my post, or everything that has happened. Warren upped his Wells Fargo stake recently. He's all of a sudden all OK with banks now? I do, however, love the word you used. "Self-immolation." I'm gonna steal it if you don't mind. Warren didn't show much interest in self-immolation but he seemed perfectly willing to let somebody else burn. Except that's really the point isn't it? Thank you for making it for me. Why stop at Warren Buffet? Take all the top Americans with AGI over $1 million and peg a 10% hike. It raises around $78 billion in revenue. Explain to me doing so (as supposed to everybody) does what exactly? Which is a good lead-in to... I've already explained it perfectly. Taxes are going up. That's the bottom line. Right now you're just trying to figure out how to slice the pie. Had the Bush cuts expired, his marginal rate go up to 39.6%. Bill Gates' marginal rate goes up to 39.6%. When Obama was offering that 20% rate on LTCG and LT dividends well, my math may be wrong but that's significantly lower than 39.6%. Furthermore, Warren and Bill would have significantly more control over the timing of his cash flows as opposed to (the example I used) Bill's buddy Steve Ballmer, who actually draw salary; unless of course, Steve Ballmer voluntarily forgo his massive salary until a future date. This "voluntarily give his money to the Federal government" never was the central tenet to my argument, which would be that somehow Warren's money seem to accrue in the very same areas he openly abhors, not just taxes but also derivatives, leverage, investment banks etc. And the only reason nobody is calling Warren out for insider trading (or at least, front-running) is because there so far isn't any provable evidence he knew of Sokol's stake in Lubrizol (and who knows what else). But returning to that "voluntarily give his money" line? Why is it a weak argument? Is money collected through taxes somehow different than money he volunteered? So his volunteered $1 is worth less than a $1 of tax revenue from him?
