Is Warren Buffett stretching the truth?
 

Some interesting information.

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WASHINGTON (AP) ? President Barack Obama makes it sound as if there are millionaires all over America paying taxes at lower rates than their secretaries.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said Monday. "That's pretty straightforward. It's hard to argue against that."

The data tell a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

In his White House address Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the "Buffett rule," named for billionaire investor Warren Buffett.

The rule says, "People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay."

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

http://news.yahoo.com/fact-check-ric...070642868.html

Saw that negro on Man vs. food. Props.

could of been food wars. damn son

I hope that the people that are so in love with this administration read this article.

One of the *loopholes* that not many are aware of is rapid depreciation. Without that, it would be very difficult for manufacturing to continue to invest in more equipment. We are already facing a real challenge against Chinese labor. Without the tax credits we have taken advantage of it's unlikely I would've been able to hire as many new employees.

People think that gains and income tax is the same thing. It isn't.. And I am fairly certain that in the next few months the country will get an education on business 101. Then they can really make up their minds as to who is right.

The entire conversation assumes/implies that people making $1,000,000.00 a year or more are paying lower taxes because they are shady and it does not take into account how/where they invest their money, business losses/investing in new business etc etc etc etc etc. People managing their money well or using it to take huge risks and make investments in business ventures that don't pay off for 3-4-5 years doesn't mean they are greedy assholes.

you can cut taxes to negative numbers, first its demand that creates jobs not lowering taxes and secondly 30 cents an hour is 30 cents an hour.
I have a pizzeria and I sell 1000 pizza's a week and my staff covers that. Im not adding more people no matter howlow my taxes are lowered. Now it booms to 3000 a pizzas a week. Im hiring more people if they raise my taxers or not if I want to stay in business.

It doesn't imply they are shady at all, it implies we have large deficits, two wars and the lowest taxes in 50 yrs. It doesnt work. .

Show me a pizza oven that costs over a million dollars. I can show you a laser that did. And that is just one of many costly investments we made over the last 5 years that have put people to work. Our stamping division now runs on automation. Two people can run 4 machines. Our automation is exactly as fast as it is in China.

Pizza parlors don't compete on a global market. Manufacturers do.

Then maybe it would make sense to STOP spending at the rate this administration is spending. TAX & SPEND has always been the mantra of the democrats. Why is that?

the issues with manufacturing jobs has more to do with China than tax breaks..

manufacturing jobs are not coming back to the US until the govt raises taxes on imports or people in the US become willing to work for $2 an hour...

regardless of who is in the white house next term, this country is economically fucked..





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Wow. Are you even aware of what the discussion is about?

Jesus man. I respect the fact that you are so far left, you are almost right. But damn! At least you could familiarize yourself with the conversation before jumping in to vigorously waive the party flag and parrot the same old rhetoric.

Buffett is bitching about how low his taxes are. Who is forcing him to take the deductions and loopholes? Just another hypocrite.

Well what happens if you start making 1050 or 1100 pizzas a week? Do you higher someone else or because of regulations and taxes you decide to make your employees work 10% harder? Sound exactly like what is happening now.

Funny you mentioned depreciation loopholes, basketball teams use them regularly to write off their players. the argument being that professional athletes, once they've been paid for, "waste away" like livestock. Therefore a sports team's roster, like a farmer's cattle or an office copy machine or a new Volvo, is a depreciable asset.


The underlying logic is specious at best. As Fort points out, a team's roster at any given moment isn't actually depreciating. While some players are fading with age, others are developing and improving. But the Nets don't have to pay more taxes when a player becomes more valuable. And in any case, the cost of depreciation is borne by the athletes themselves, when they pass their primes and lose their personal earning power.

Nevertheless, the IRS not only agreed with Veeck but allowed any owner claiming the write-off to deduct roster expenses twice ? first under "player salaries," in the case of the Nets' documents, and then under "loss on players' contracts" ? and an enormous tax shelter sprang up within the balance sheets of franchises everywhere. This can't be emphasized enough: Every year, taxpayers hand the plutocrats who own sports franchises a fat pile of money for no other reason than that one of those plutocrats, many years ago, convinced the IRS that his franchise is basically a herd of cattle. Fort calls it "special-interest legislation." "It's not illegal," he says. "It's just weird."


http://deadspin.com/5816870/exclusiv...8-million-loss

At the rate wages and raw materials are increasing in China by 2015 it will be an equal playing field. The manufacturers that are established and ready are the ones that will grow the fastest and hire people sooner. I am seeing it happen now. We have many customers that left us and went to China that realize the honeymoon is over. China was tolerable when their costs were cheap. The quality still is poor, dealing with someone that doesn't speak your language and is in a time zone 11 hours different has not gotten any easier.

If anything positive has come out of this it would be the fact that competing with China has taught US manufacturers that you can't ever get comfortable. We make better products faster than we ever have.

Really when you actually look at facts republican admins spend more. I know those facts are pesky and it doesnt fit the talking point.

http://www.businessinsider.com/chart...eficits-2010-6

Companies have been doing that with the low taxes and making record profits.

I listened to an interview with Michelle Bachmann yesterday. I can't stand that chick but she made a very valid point... the government assumes they own all of your money and just decides how much you get to keep.

Here is a sad fact... it doesn't matter who is in power... they will raise taxes when they need money to pay their rich buddies for no-bid contracts.

newsbusters yep its got to be true.

Actually that link is direct from the IRS.gov.... Then again, probably can't trust them either!

http://www.irs.gov/pub/irs-soi/09in11si.xls


.:1orglaugh


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Those *facts* can be interrupted many ways.

Take the politics out of it. No government should spend more than it makes. And the fact remains,the country is in the poorest economic shape that it has been in since the Great Depression. Spending more money and then taxing the remaining people that do have jobs is not going to help things. It also seriously hurts the confidence that employers do need to grow their businesses and spend money.

How many more economic recovery/stimulus plans are we going to see from these people?
Obama appears to be interested in being reelected. Coming up with *plans* he knows won't go anywhere isn't going to do a thing to help the economy.

the problem with the article is how it fails to note that the wealthy make a much larger percentage of their income off capital gains then the middle class. Somewhere i read recently that the middle class make, on average, 17% of their income from capital gains, while the rich make 52% of their income off capital gains.

what does your company manufacture?

I think that the article is essentially trying to compare apples to apples as opposed to apples to oranges, which the argument usually revolves around.

thats a failure. this difference in tax rates between capital gains & income is the key reason warren buffett pays the lowest tax rate in his office.

the whole impetus of a low captial gains rate is that, when the wealthy keep more of their profits, they re-invest them & grow the economy. Sounds good in theory. except the wealthy have so many options that don't produce jobs (like hedge funds, buying gold, or just keeping it in the bank.) All its done is make the rich richer...while the middle class has gone nowhere.

http://i56.tinypic.com/1zfuc11.jpg





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We have over 800 different part numbers in the plastics division. Everything from aerospace to waste management. Our metals division has over 300 part numbers. There we make things from door hardware to oil filtration systems. We are what is technically called a jobshop. We have several proprietary lines along with those.

So are they trying to tax revenue or income?

Somebody that has a business setup where they take part of their revenue and reinvest it shouldn't be taxed on that.

They'd be taxed on the money they'd take home. You know, their personal income.

What people continually fail to understand is the disparity between the guy in the top '10%', the guy in the top '1%' and the guy in the top 400.

Top 25% $67,280.00
Top 10% $113,799.00
Top 5% $159,619.00
Top 1% $380,354.00
Top 0.1% $6,000,000.00
Top 400 $8,815,945.00
http://www.irs.gov/taxstats/indtaxst...=98123,00.html

The guy in the 'top25%' has nothing in common with the guy in the 'top 1%' and the guy in the top 1% has nothing in common with the guy in the 'top 400'. The numbers are so heavily skewed that making 'brackets' out of them is pointless.

The rules I have seen mentioned boil down to 'if you earned more than X you can not pay less than Y% as your income tax rate. No deduction, loophole or other financial maneuver would allow you to pay less than a set baseline percentage. A change like that would require someone like Warren Buffet to pay the 30+% his bracket requires even if most of his income is subject to personal gains rates instead. It would have zero impact on anyone who is already paying the rate their 'bracket' requires.

In reality, all of this is a minor reshuffling of a broken deck. There are only two possible eventual outcomes. We are either going to a flat tax rate with zero adjustments and loopholes regardless of amount earned and a one time credit for a 'poverty limit' OR we are going to a National Sales Tax that taxes us all on what we spend rather than what we earn. It won't happen with the current political climate, but it will happen during our lifetimes. :2 cents:

:1orglaugh

I will make them work harder , so more profit for me ...
In fact, I will try to get them to work 20% more, for 10 % less money ... and if the teapublicans lower my taxes by 10 % ... well I am in a situation of win-win-win ...


You really think business owners employ more people out of goodness of their heart ... :1orglaugh:1orglaugh:1orglaugh

Mike I met a Rabbi the other day who told me that even if he had all the money that Buffet has, he was not sure he would be able to give it away to charity so easily.

I will accept your figures as fact. That being said. It's not difficult to do the math. Top 400 x an additional $2m in tax = less than 1 billion dollars. at that rate it will take 1000 years to recover one trillion dollars.


I actually agree with you on this Relentless. A flat and a national sales tax along with a much more moderate spending package is the only hope for the next generations.

Of course then they will unionize and all your hard efforts and financial risks will go right down the tubes.

It's funny how the less you work for your income (welfare, capital gains, etc.), the less you are taxed but the harder you work (punching a clock and working in ditches) for it, the higher you are taxed.

Happy employees would see no reason to unionize. That's why so many employee groups vote against it if its brought up.

True, except for most people the cap gain income came after hard earned money was invested.

I am going way out on the limb here..but I take the position that the employees I made my comment about won't be happy long.


Originally Posted by directfiesta


I will make them work harder , so more profit for me ...
In fact, I will try to get them to work 20% more, for 10 % less money ... and if the teapublicans lower my taxes by 10 % ... well I am in a situation of win-win-win ...

As I understand it...
Warren Buffet wasn't telling the whole truth.

He makes the lions share of his money off of CAPITAL GAINS. In other words...he earns his money, it gets taxed. THEN he invests that money in the stock market. Now the money he earned from that gets taxed again as CAPITAL GAINS.

And Capital Gains tax rate is justifiably lower than income tax. If not, then there would be no incentive for people to invest that money since it was already taxes once before.

So yes, he earns a LOT of money through Capital Gains revenue (he's a wiz at the market...so he deserves to make that money). But NO, his actual INCOME TAX rate isn't lower than his secretary.

And you better believe he pays BILLIONS in taxes each year.

His secretary probably gets a tax REFUND at the end of the year.

Americans making between 100-200K only pay 16.3% income tax? do Americans pay state income tax seperately? How much would that add to the %?

Canadians in that income bracket are in the mid 30% combining federal and provincial income tax.

A CEO or a business manager is considered good at what he does when he can extract the maximum amount of work for the minimum amount of compensation from his workers. When workers mirror this by forming unions to extract the maximum amount of compensation for the minimum amount of work, they're considered lazy parasites. Can someone explain how this benefits society in any way? It's the workers who turn the wheels of the economy and make the fortunes for so many who quite possibly continue to pay rather less taxes than they really ought to.

there's a huge difference in a term "rich", taxing someone more making 500k+ is a lot different then someone making 10mill+...

Capital gains and ordinary income.. are apples and oranges.

good point - and both the greedy owner/manager and the lazy overpaid union suck equally in my book.

I pay taxes every time I turn around. It's outrageous in my opinion.

First the feds take it in income tax. And don't forget if I make the mistake of hiring employees, then I have to pay matching funds for their social security (govt. double dipping)
Then if I invest my money I earned, they tax it again as capital gains. Then I go to put overpriced gasoline in my car and pay a shitload of taxes on that. I moved to Las Vegas because Nevada doesn't have a state income tax...but they more than make up with it in sales tax and "fees" for everything. Registering my cars costs a few thousand dollars.
Owning my own home costs me a nice hefty property tax.
The city gets it's money out of me. And so does the county.

If I could sit down and accurately figure out how much of every dollar that a local, state, or federal govt. takes from me...I'd probably only end up with pennies out of every dollar that I EARNED.

I capitalized the word "earned" because the different taxes from local, state, and fed just take it from me like it belongs to them. :(

EDIT: Oh yeah...and when I die? I can't leave it all to my daughters. The good old "Death Tax" is always around the corner so the govt. can swoop in and steal everything you built.

I'm looking at my pay stub right now.

Federal, about 10%
State, about 4%
Social Security, about 4%
Medicare, about 1.5%

So around 20% total.

These pizza places that had 10 workers for the 1000 pizzas a week cut them to 5 workers for the same 1000 2 years ago. Now if it booms to 3000, they might hire one or 2 to help with demand. Why did it boom? Pizza prices stayed the same, raise the taxes on it, and the pizza prices go up. Yeah typical run around with the answer, but it is an endless cycle on both sides. Raising the taxes is just going to give washington more money to spen, they will NOT pay anything off, either side.

Wonder what this entire chart is, but it looks like this is Adjusted income!

depends on the state, California would be about another 9%

Canadian earning 100K pays 27% average tax rate for federal/provincial combined income tax. Canadian earning 200K pays 36%.

Robbie we have all those taxes and more. And yes, the no state tax states kill you with insane property taxes and other user taxes. Money has to come from somewhere.

The one thing the US doesn't have is a national sales tax - it's inevitable that one day it will happen. Even the Democrats won't mention it now because it's political suicide.

From 2009
47% of Americans paid NO federal Income tax last year!