Wednesday, August 27, 2014

Warren Buffett, Do As I Say

Warren Buffett's Tax Whopper - WSJ:

Yet again, the Oracle of Omaha is in the news for the old "do as I say, not as I do" problem endemic to humanity in general, but pretty much the rule for those of The Party that make over say "$150K".

In this case, Buffett is going to profit handsomely from financing a merger between Burger King and Tim Horton's of Canada. The primary reason for moving the HQ to Canada is that the company wants to expand internationally and the US not only has the highest corporate tax rate in the world, but it is the only major nation that ALSO double taxes income earned outside the US for US based corporations -- a very hefty penalty for a multinational corporation for being based in the US. One wonders how management with a fiduciary responsibility to shareholders can justify being US based given such a strong anti-business sanction.

In the past, Buffett has run up HUGE credentials with the easily led and the uniformed by saying "I pay a lower rate than my secretary" ... and even having BO, the prevaricator in chief, pick that up. This article points out the obvious fallicy in this claim -- if one wants to assume it is true at all, which is at least somewhat doubtful:

The big subterfuge in Buffetts claim is the rate he primarily pays is CAPTIAL GAINS ... a rate that less than 50% of Americans are used to dealing with since they have no financial assets which would qualify them. So the low information voter hears Warren or BO bray about "my secretary pays a lower rate than I do" and assumes some strange "benefit to billionaires" in the tax code making it to be "unfair", when in fact the rate is the same for all -- you just have to sell assets held for certain periods of time to use it.

Insofar as Buffett (like Mitt Romney) earns income primarily from capital gains, which are taxed at 15 percent (and according to Obama need to be raised for reasons of fairness), we need to determine how much income a taxpayer like Bosanek must earn in order to pay her  tax rate. This is easy to do within ranges.
Buffett has enough non-capital gains income to bring his claimed rate up to 17.4% and claims that his staff pays 34%  ... so it is just a matter of looking at the tax tables to see what amount of income his secretary has to make to hit that figure  ... as the linked article points out, something north of $200K.

Now I'm sure that to a man with $60 Billion in assets, $200K a year is a paltry sum -- virtual impoverishment. No doubt he feels some guilt at being involved with the scourge of "income inequality" on a level that there are only a few hundred men in America that can even come remotely close to imagining.

For the rest of us however -- and indeed BO, $200K+ is actually wealthy ... if you run it through, you find it is the top 6%, so 94% of the population makes less.  This is PRIME territory for BO to fleece even harder than the current 34% rate.Already, if Warren's "poor" secretary made $450K, she would be saddled with a 39.6% rate! I'm sure Warren would feel especially bad about this!

The moral of all this is that Warren is a smart man -- sidling up to The Party is just a sign of knowing where your bread is buttered. His opposition to the Keystone Pipeline is brilliant -- makes him a friend to The Party while he profits handsomely through his rail interests moving the oil that the pipeline would move -- all be it more expensively and dangerously. You don't get to be worth $60B by being stupid.

The other moral OUGHT to be that our Founders were right when they put the equal protection clause into the Constitution -- all OUGHT to be treated equally under the law, and the "progressive" income tax ought to be ILLEGAL. Pick a rate, and make ALL AMERICANS pay it!!!

With what we currently do, it allows the vast majority of Americans to believe that they can get goodies and "someone else" will pay for it. Meanwhile, the super wealthy -- like Buffett make expert use of whatever system is put in place to maximize their benefit, and those that were formerly "the middle class" -- those that are striving to pull themselves up a class or two from their birth, are the ones that get the shaft.

And of course that isn't enough either -- so we go after the corporations, chasing them and their jobs from our shores. We disincent people from trying to improve their station with taxes, regulations, and the general idea that somehow improving your position is always at the expense of someone else -- we kill the idea of economic growth benefiting all.

So we continue to slide -- those with wealth siding with The Party because they know it is where the power is, and The Party being happy to have them and give them cover -- even if they have $60B, because they never were actually about "fairness" -- they are about POWER, and they know that the actual country that they are shepherding us to is like the old USSR or some Central American republic -- a very very few wealthy, directly connected with the government, and vast heaps of impoverished humanity, hopeless, seeking greater hand outs from the elite. A country where BO could preen and posture as Presidente for life!

Liberal Heaven.

'via Blog this'

No comments:

Post a Comment