Buffet Three

[foodserver]

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I would write more explaining this article by the big daddy "Rocketman" who took this name after I did and managed to make a bit more of it, but frankly, there is nothing in here I haven't already explained.  Maybe dagon would like another shot this time--or maybe dagon will just accuse John Hinderaker of drinking.  I'll go ahead and underline what Mr. Hinderaker explains that I told you weeks ago.


      http://www.powerlineblog.com/archives/2011/08/the-stooge-of-omaha.php



We wrote here about Charles Koch’s elegant rejoinder to Warren Buffett’s very silly op-ed, in which Buffett requested that the federal government raise his taxes. The flaws in Buffett’s reasoning, and his epic hypocrisy, have been widely noted. Some of the main points can be summarized as follows:

1) Nothing prevents Buffett from contributing more money to the federal treasury, but, like every liberal I know of, he has chosen not to do so.

2) Buffett’s tax rate is lower than his secretary’s because his income consists entirely of capital gains, while hers is ordinary income. (This would be the case, by the way, only if Buffett’s secretary is exceptionally well-paid, as she probably is.) Capital gains are taxed at a lower rate than some ordinary income because a) they constitute a one-time profit, generally accrued over a period of years and consisting partly, if not entirely, of inflation, and b) the company in which the capital investment was made has already paid taxes at a steep rate on its income. Politicians debate what the capital gains rate should be, but I am not aware of any politician or economist who argues that the capital gains tax rate should be as high as, or higher than, the ordinary income rate. (explained earlier by Mornac)

It turns out that there is more. While liberals raced to denounce Charles Koch’s observation that he spends and invests his money more wisely than the government could, Warren Buffett is on record as believing–no doubt correctly–the same thing. That is why his vast fortune, which consists of unrealized capital gains, won’t be going to the Treasury. In a 2007 CNBC interview, Buffett explained why he intended to donate his fortune to the Gates Foundation and other charities:

    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.

That is the same point that Koch made, and it refutes Buffett’s notorious op-ed: the nation would be better served if it cut government spending rather than increasing Buffett’s taxes. Buffett, being a liberal, understands that he can make decisions better than the government; he just doesn’t think you can. (holy shit! I've just unmasked dagon's secret identity! dagon is Warren Buffet!) Thus, he wants taxes generally raised, while he donates his money elsewhere. We, as conservatives, believe that both you and Warren Buffett can dispose of your money better than the government will. Why? Because it’s yours, and you care.

But there is another layer of Buffett hypocrisy yet to be plumbed. It turns out that, contrary to his protestations that he would dearly love to pay more taxes, Buffett has in fact been battling the federal government for years to keep his company’s taxes to a minimum. Note 15 to Berkshire Hathaway’s 2010 Annual Report relates to income taxes:

    With few exceptions, we have settled tax return liabilities with U.S. federal, state, local and foreign tax authorities for years before 2002. We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years. It is reasonably possible that certain of our income tax examinations will be settled within the next twelve months.

So Buffett’s company is still battling with the IRS to minimize its taxes as far back as 2002. The amounts in dispute are substantial:

    At December 31, 2010 and 2009, net unrecognized tax benefits were $1,005 million and $926 million, respectively. Included in the balance at December 31, 2010, are $774 million of tax positions that, if recognized, would impact the effective tax rate. The remaining balance in net unrecognized tax benefits principally relates to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

To be fair, Democrats can argue that Berkshire Hathaway’s corporate income taxes are a different issue from Buffett’s personal income taxes: the vast majority of Berkshire Hathaway stock is held by people who are not billionaires, like Buffett. But that distinction is revealing in itself. Liberals constantly want to increase taxes on corporations, as though ignorant of the fact that those taxes are paid mostly by consumers, not shareholders, and that a large majority of shareholders aren’t rich. If liberals now want to acknowledge that it is better for Berkshire Hathaway and its shareholders to keep the company’s profits than to pay them to the federal government, the implications are far-reaching.

In sum, if the world contains a worse hypocrite than Warren Buffett, he would not be easy to find.

[ivanm]

A minor point, capital gains can also occur on bonds, and the issuer of those bonds has not paid any taxes, so you are only half right.  I personally own municipal bonds, and when they are called at a price more than I gave for them then that is a capital gain.

"That is the same point that Koch made, and it refutes Buffett’s notorious op-ed: the nation would be better served if it cut government spending rather than increasing Buffett’s taxes. Buffett, being a liberal, understands that he can make decisions better than the government; he just doesn’t think you can. (holy shit! I've just unmasked dagon's secret identity! dagon is Warren Buffet!) Thus, he wants taxes generally raised, while he donates his money elsewhere. We, as conservatives, believe that both you and Warren Buffett can dispose of your money better than the government will. Why? Because it’s yours, and you"

Had you noticed how the high paid pinkos on this forum whine about the rich not paying enough taxes?  It is pretty simple, the hogs themselves want to pay less taxes so they shove the load off on someone else.

And the clown that probably makes 100 grand a year thinks government should furnish him free day care for his kids?  What else does the hog want, food stamps.

[johnhp]

So you all have objected to being called Tea Baggers....how about Kochsuckers?

[ivanm]

Wealthy people like to leave a legacy of themselves and it is not unusual for them to engage into philanthrophy.  However, the additional taxes they propose are no skin off their hides because they would still have plenty for their own needs and wants.  The less affluent people can and do feel the pinch of higher taxes, so how many of them do you see advocated higher taxes?

So we have the middle class caught between a rock and a hard place, the greed of the lower classes and the greed of the uber rich. Maybe those two groups need to get together and leave the rest of us alone.

[johnhp]

Wealthy people like to leave a legacy of themselves and it is not unusual for them to engage into philanthrophy.  However, the additional taxes they propose are no skin off their hides because they would still have plenty for their own needs and wants.  The less affluent people can and do feel the pinch of higher taxes, so how many of them do you see advocated higher taxes?

So we have the middle class caught between a rock and a hard place, the greed of the lower classes and the greed of the uber rich. Maybe those two groups need to get together and leave the rest of us alone.

How often do poor people influence public policy?

[foodserver]

  The relative silence John's reaction to the substance of Hinderaker's article speaks loud loud volumes.

Wonder what the dagster will have to say.  I suspect he's busily searching the internet for dirt on Hinderaker or Powerline...

[johnhp]

The relative silence John's reaction to the substance of Hinderaker's article speaks loud loud volumes.

Wonder what the dagster will have to say.  I suspect he's busily searching the internet for dirt on Hinderaker or Powerline...

i don't respond point by point to trivial bullshit penned by obvious morons.  i believe referring to him as a Kochsucker is all his statement required.

[foodserver]

i don't respond point by point to trivial bullshit penned by obvious morons.  i believe referring to him as a Kochsucker is all his statement required.

...or, at any rate, all ya got! 

Dags too, no doubt.

[johnhp]

...or, at any rate, all ya got! 

Dags too, no doubt.

Not at all, as stated previously when similar canards were raised, the ideas will not address the financial issues facing us.

[foodserver]

Not at all, as stated previously when similar canards were raised, the ideas will not address the financial issues facing us.

Which "canard" would that be.  That despite what Buffet says that he does everything he can to minimize his own tax bill while claiming he and others should pay more?

Or claiming the government is a better spender of donated money than the private charities he himself put's all his money into?

[johnhp]

Which "canard" would that be.  That despite what Buffet says that he does everything he can to minimize his own tax bill while claiming he and others should pay more?

Or claiming the government is a better spender of donated money than the private charities he himself put's all his money into?

The canards in the article you posted.  Each of them.

[foodserver]

The canards in the article you posted.  Each of them.

   To borrow from YOU John, thanks for not having a point.  Word fairy*ism at it's most typical...

*patent pending all rights reserved Boffo

[johnhp]

  To borrow from YOU John, thanks for not having a point.  Word fairy*ism at it's most typical...

*patent pending all rights reserved Boffo

i am not sure how you missed the point: the whole article is a canard that does not address the issue of taxation.

[foodserver]

i am not sure how you missed the point: the whole article is a canard that does not address the issue of taxation.

No argument there.  I would describe the article as addressing the discrepancy between what Buffet says and what he does.

[johnhp]

No argument there.  I would describe the article as addressing the discrepancy between what Buffet says and what he does.

And as such is a canard.