
Warren Buffett: “Stop Coddling the Super-Rich” (2011) - porsupah
http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html
======
chollida1
> I have worked with investors for 60 years and I have yet to see anyone — not
> even when capital gains rates were 39.9 percent in 1976-77 — shy away from a
> sensible investment because of the tax rate on the potential gain

I've been in finance long enough to believe that this is true.

The problem is that the rich have the ability to take their income in alot of
different ways.

Tax income more, they'll take it as dividends.

Tax dividends more, they'll take it as capital gains.

Tax capital gains, they won't realize their capital gains until they can
offset them with realized losses or they'll just get bank loans again't their
stock holdings.

Tax assets on death and they'll pass them o n in trusts.

Some will move money off shore if they think they can get better returns that
way.

The problem is that no tax code can close all loop holes because you just
can't foresee the creative ways people will out maneuver the tax code.

Who would have thought 25 years ago that companies would buy other companies
in different countries, not to acquire their products or markets, but to
acquire their headquarters address to lower the tax paid in the US.

~~~
guard-of-terra
How about taxing net worth of an individual? Calculated by market participants
like they do today.

Tax 0,1% of net worth of those whose net worth exceeds say $10 million. Such
people have to get assessment of their net worth and then pay their tax.

Of course they have incentive on doing slightly funny things with their net
worth, but it is difficult to race them to the bottom in view of very large
fines for crossing the line.

Of course people will skip citizenship then; but as long as they do business
within country it is solvable too.

~~~
herge
Net worth, as in property value - mortgages? Most 'middle class' people have
most of their net worth in their principal residence, so you'd be adding quite
a shocking tax bill to a lot of seniors on fixed incomes who own their own
house. That's the problem with Mark-to-market taxing.

You could start added loopholes to your "block loopholes" law, like "If you
reside in the property, it's tax free", but then you hit problems like parents
given their kids properties as tax shelters, and the like.

~~~
antisthenes
What's wrong with seniors getting hit with a slightly larger tax bill?
Besides, you could alwaysexclude the primary residence from the wealth tax to
lessen the burden.

It would either generate additional revenue or have them move to an area with
cheaper houses/properties to avoid paying it, which would make space for young
professionals who otherwise would not be able to afford it.

I'm also venturing to speculate that a lot of seniors are NIMBYs, facilitating
the lack of affordable development and re-zoning, in which case that's another
argument to get them the hell out of their expensive suburbia.

~~~
JonFish85
Mostly because the seniors have spent their working lives building their
savings (hopefully) to be able to retire, and have a very fixed income -- they
can't look forward to getting another job, getting a raise, etc. Seniors as a
whole are a very vulnerable group, which I think is one of the reasons that
their voter turnout is so high.

Think about what that'll do to your retirement. Presumably you're saving and
such, and want to get to a point where you can live comfortably (not
extravagantly) when you retire: a trip a couple times a year, the ability to
take your grandkids to get ice cream, etc. A tax bill can be devastating to
your retirement savings & therefore lifestyle.

~~~
iofj
Think of Europeans, mathematically the idea that Europeans will ever retire
doesn't make sense. It'd require 80% or 90% income tax, maybe even more,
because there aren't enough kids to split the burden on.

Even in the US this is true, except to a less extreme extent. The systems the
current seniors have put in place make sure few of the current workers will
retire.

So why do they deserve it ? They voted in governments that fucked us, so why
wouldn't we get to fuck them ?

------
gadders
Good counter-argument at the time from Michael Arrington from TechCrunch:

[http://techcrunch.com/2011/08/15/screw-the-rich-heres-
how/](http://techcrunch.com/2011/08/15/screw-the-rich-heres-how/)

"Buffett calls for an increase in all types of taxes – income, dividend and
capital gains. That would be a nice triple layer of protection against any
newcomers, and still preserve all – 100% – of the $47 billion he’s accumulated
until now."

~~~
bprieto
Arrington nails it.

If Buffett was really willing to pay more taxes, he could just stop using
loopholes to avoid paying hundreds of millions every year. Or stop litigating
with the IRS to get to pay less. He doesn't want "the rich" to pay more taxes.
He wants other (less) rich people to pay more taxes.

------
bwoj
Of course the super-rich are going to get coddled. If you are in a position of
influence they can throw $100,000 to a million dollars your way to make sure
you enact the policies they want. This can be in the form of consulting gigs
or speaking fees or what have you.

Point is, the money is literally chump change to them.

~~~
sharemywin
a lot of the loops holes are for the "jobs" they are going to create.

------
parsnips
How about "stop soaking the working class and spending like drunk sailors?"

------
wturner
In the United States there are about 500 billionaires. There are also 150
million U.S. gun owners in a declining middle class where dead end temp work
is a lifestyle for a large part of the population and basic social well-being
and security is an "issue". I can tell you from first hand experience, when
you are in that state ... you are not in your right mind. If I was one of
those 500 people I would be very paranoid.

~~~
kbenson
My understanding is that there's a few uber-rich that push for reform
specifically because of this (or at least they use this argument on their less
agreeable brethren). Being rich is only useful if there's enough stability to
allow that fortune to be used.

------
c3534l
Lets not forget the rebuttal, too.

[http://www.forbes.com/sites/paulroderickgregory/2012/01/25/w...](http://www.forbes.com/sites/paulroderickgregory/2012/01/25/warren-
buffetts-secretary-likely-makes-between-200000-and-500000year/#3e547f7b18b8)

Edit: maybe that source isn't as good as I remember, but other sources seem
suspicious over the factual accuracy of Buffet's claims.

[http://www.politifact.com/truth-o-
meter/article/2011/sep/21/...](http://www.politifact.com/truth-o-
meter/article/2011/sep/21/does-secretary-pay-higher-taxes-millionaire/)

[http://www.factcheck.org/2011/10/shes-no-buffetts-
secretary/](http://www.factcheck.org/2011/10/shes-no-buffetts-secretary/)

~~~
kbenson
_Buffet himself declares that he pays a 17.4 percent rate on taxable income.
His staff, like Bosanek, pay an average of 34 percent. The IRS publishes
detailed tax tables by income level. The 2009 results show that the average
taxpayer paying Buffet’s 17.4 rate earns an adjusted gross income between
$100,000 and $200,000. But an average taxpayer in Bosaneck’s rate (after
downward adjustment for payroll taxes) earns an adjusted gross income of
$200,000 to $500,000. Therefore Buffett must pay Debbie Bosanke a salary well
above two hundred thousand._

Is it me, or does that not make any sense? The average tax payer of that
percentage makes that amount, therefore she must make that amount? Am I
supposed to believe this man doesn't know how averages work? Because the
alternative is he's being _very_ disingenuous.

~~~
djrogers
The way the progressive tax rates work in the US, you truly have to get to a
pretty high level of adjusted gross income to average 34%. In 2011 the highest
tax bracket was 35%, so you couldn't even pay 34% until you earned $379,151 or
more.

Given that you'd only pay 35% tax on the money earned above $379,151, so it'd
take a pretty darned high income to bring your total tax rate up to 34%.

~~~
kbenson
For _federal_ taxes, yes. Was there a distinction by Buffet that he was
referring to her federal tax burden, and not her combined federal and state
burden? Nebraska's and New York (the places I figure she's likely to live/work
out of) both seem to have state income tax rates between 6-7%. It's
significantly easier to hit the 28% federal tax rate.

~~~
shostack
California tax payer here--FML.

~~~
lg
don't forget NYC wage tax...

~~~
kbenson
Sheesh, the worksheet[1] to compute your tax burden if you make more than
$106k is annoying. I was just looking for an algorithm of some sort. From the
under $106k table, it looks to be about 5%. That plus NY state taxes seems to
put it on par with CA as a whole. That said, San Francisco appears to have an
additional 1.5% flat income tax rate, which can raise the tax rate for high
earners (well over $200k) in SF to close to 15% for combined state and local
taxes.

1:
[https://www.tax.ny.gov/pdf/current_forms/it/it201i_nys_tax_c...](https://www.tax.ny.gov/pdf/current_forms/it/it201i_nys_tax_computation_wkshts.pdf)

------
agounaris
on taxation, I always believe that "you" should make the tax reasonable enough
to render its avoidance obsolete. Close all loopholes with flat laws and just
force them. On the other hand there will always be some corrupted official to
create another loophole in the process...

~~~
antisthenes
Unfortunately, this always runs into the problem of the elites influencing
politics and policy, so all the loopholes will never be closed and there never
will be 100% effective enforcement (as the Panama papers shed some light on).

I bet there were people in the 1850s saying the exact same thing.

------
loki49152
Warren, shut your hypocrite mouth until you start writing checks to the US
Treasury that cover the gap between whatever you're taxed and whatever you
think you should be taxed.

Even then, STFU. You have no right to dispose of the lives of others.

------
known
Not possible due to
[https://en.wikipedia.org/wiki/Stockholm_syndrome](https://en.wikipedia.org/wiki/Stockholm_syndrome)

------
_yosefk
How about not bailing out private enterprises with public money? That'd cost
Buffet a few tens of billions.

~~~
tim333
They could of done and allowed the banking system to collapse and cost all
Americans billions instead of making a profit for the public on the bailout.
That said I can see an argument for what they did in Norway where if the
government has to bail out a bank, they get to own it.

------
beyondcompute
Are there similar statements by any of Russian oligarchs?

