

Warren Buffett: misleading Argument, left out the effect of corporate income tax - bakbak
http://www.forbes.com/sites/timworstall/2011/08/15/warren-buffetts-very-strange-tax-argument/

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_delirium
I'm not sure that you can assume that corporate tax revenues, if not taxed and
left with the corporation, would all accrue to shareholders in dividends or
dividend-equivalents. In an idealized setting that's true, but I'd be
surprised if empirically there wasn't more interaction of variables, with some
of the revenues accruing to other parties, like management or other employees,
due to effects such as: cash-flush corporations tend to pay higher salaries
and spend more money on perks.

In other words, this article claims that two situations have equivalent
effects for shareholders:

1\. Corporate tax rate of 35%, and dividend tax rate of 15%

2\. Corporate tax rate of 0%, and dividend tax rate of 50%

But I am not at all sure that that's the case in practice, i.e. that
empirically if we changed from #1 to #2, it'd make no difference.

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ahi
Clearly, corporate income would go to the employees' wages, so the corporate
income tax is a double taxation of employees' wages not Mr. Moneybags'
dividends. </eyeroll>

I am embarrassed for writers that make these arguments. They are so clearly
ideologically driven I imagine there must be a brothel for op-ed whores
somewhere on Wall St.

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beefman
(from a different source)

"Becky: OK, there were a couple of emails that came in that people that said
if you think the government should be able to tax more money, why don't you
just give your money to the government instead of charity?

Buffett: Well, that's a choice and it's an option that... If I had to give it
to a single individual - make some young Buffett a multi-billionaire - or give
it to the government, I'd absolutely give it to the government. I think that
on balance the Gates Foundation, my daughter's foundation, my two sons'
foundations, will do a better job with lower administrative costs and better
selection of beneficiaries than the government."

So, Buffett and his children should have the option of deciding how their
money is best spent, but other "individuals" should not?

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yonran
If a player of a game says that the rules should be fixed, shouldn't the fact
that he happens to be the _best_ player make him more credible rather than
less so?

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waterlesscloud
Personally it makes me start looking for how he'd benefit.

If he's that good a game player, he's probably playing a game when he says
these things.

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yonran
I should have elaborated further. I keep seeing the GP's implication that it's
hypocritical of Warren Buffet to suggest changes to the rules when he has
already won a lot of money. I think this argument is a red herring, and the
reason that it comes up so often is that he is in an enviable position as the
"winner" of the game.

It's perfectly legitimate to advocate for changes to the rules of a game even
while playing under the current rules. By way of analogy, a friend wanted to
win an honorable mention on some website for his work, but he was annoyed that
the last step in judging submissions was a stupid online survey with no
restriction on multiple submissions. He emailed the organizers to tell them
that the form was meaningless, but when they didn't change the form, he used
curl a few thousand times to win. (The runner-up also clearly voted far more
than was possible by hand). Optimizing for broken rules can be unfortunate but
not necessarily unethical.

I just think Mr. Buffet's policy recommendations should be debated on its real
flaws (like the article points out) rather than on how well he plays under the
current rules.

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BSeward
Warren Buffett's argument was "anecdotally the über-rich wouldn't mind paying
more and (demonstratively?) won't invest in US markets in markedly different
ways". That other sundry taxes are out there doesn't seem like it matters in
that context.

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MarkMc
Warren Buffet makes two separate arguments in favor of raising taxes on the
very rich:

1\. Anecdotally the über-rich wouldn't mind paying more and won't invest in US
markets in markedly different ways

2\. The über-rich aren't paying their fair share of taxes because their tax
percentage is much smaller than everyone else.

The first point is a good one, but it's the second point that the Forbes
article is criticising - and to my mind rightly so. Why shouldn't you include
corporate income tax and sales tax when it comes to calculating a person's tax
percentage? I'd love to hear Warren Buffett's response to this criticism.

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megaman821
This article is even more disingenuous than Warren Buffet's article. Entire
departments exists in companies to minimize their taxable income.

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babebridou
> Just send a check to: Gifts to the United States U.S.

I'm far (very far) from an expert, but wouldn't that be somewhat dangerous or
akin to corruption to an extent? Could the balance of the US be saved with
gifts from a few super rich people without anyone raising an eyebrow...?

