Warren Buffett is Wrong on Taxes

I was very concerned with the tax statements that Mr Buffett has put forth over the past year. We may all sing his praises for his considerable investing savy, but stop there. He is not an economist, a tax accountant, or a politician. In regards to the rich paying too little taxes, it is those "rich" people who flood the markets with investment dollars and in doing so expect returns. I do not feel that the difference they pay between capital gains and income tax percentages is a break or credit. I feel this difference reflects the amount of risk those individuals take by investing. So what is Mr Buffett's alternative? Let's take the difference between the highest rate 35% and the 15% he pays now and give our government the 20%? I'm not really happy with how that bunch is spending my tax dollars now the last thing I want is to give them more to build bogus projects or bail out companies that maybe should have gone under in the first place.

Taxes will forever be a thorn in the side of average hard working Americans. Folks in the higher brackets have the income to avoid them and those in the lower brackets get a check back. I say cut out all the BS wording and laws of the tax system and come up with a plan that is simple and one you can't hide from.

Brian I agree with you. I'm one of those mid size business owners that pays plenty of taxes when we have a good year. Sometime I don't pay any taxes because of a lousy year. I'm having a pretty lousy year, so I'll pay very little taxes next year. Trust me, taxing small and mid size business owners more is not going to expand job growth. As to Mr. Buffett, he is indeed brilliant. Mr. Buffett is sitting with billions of cash on the sidelines. Of course he is supporting BO for president, he knows that when BO gets elected, confidence will be low and a long term economic stagnation or decline is likely. Mr. Buffett can pick up some real bargains with the cash he has.

Yes, Warren Buffett and many others talk about getting the rich to pay more taxes. Obviously, no one would argue that Mr. Buffett and his kind (Gates, Soros etc.)are rich and could easily afford to pay more taxes regardless of whether anyone believes it's fair or not. My problem is the definition of "rich". Obama and others define "rich" to be anyone making $250K and more. Why? There is certainly a BIG difference between an annual income of $250K and Buffett's billions. Furthermore, I've never accused someone making $250K a year as being "rich". Maybe comfortable but not rich. I'd like to hear Buffett's answer to this question since he's so smart and compassionate.

Mr Buffett's comments and the way they are being used politically by the Obama campaign are just the latest example of how complex the tax system is and how few people actually understand how it works. It shows us all why the move to a simpler tax system is not only required, but will never happen. I'm quite sure Mr. Buffett would have serious issues if all his revenue streams were added up and treated the same as my paycheck. If he were really serious about the extremely wealthy paying an appropriate amount of taxes based on their actual assets and revenue, he would call for a system that offers no deductions, no hiding anything. Everyone would be required to do what we are now demanding of Wall Street - total transparency!

And based on this example does anyone really wonder why the masses are angry and going to elect a socialist like Mr. Obama? The wealthy in America have failed to make the case against him, and at times, have even made the case for him. Since less of us are wealthy than not, I personally don't find it surprising that we are heading down the path that we are.

Buffet is just trying to stay the richest man in the world. He knows that if everyone else has their taxes rasied, it will be almost impossible for someone to catch him. It is very selfish.

The wealthy want Barack in the White House because he is a Puppet. Well actually all politicians are puppets it seems. The politicians don't want to fix our financial system because there are those that control it are building an empire off of it. And those are the ones in control of our politicians. I really believe if we all and me including would live within our means and save 10% each month their empire would crumble and we would get back to rebuilding this financial system. I don't want socialism but I don't want elitism either. Sara Palin isn't a puppet. She has a track record for going after corruption.

If he feels so bad for people like his secretary, why doesn't he pay her more than $60,000 a year? And if he's so progressive, then why is he still calling her a secretary?

Brian do you feel the capitial gains tax should be higher then? also is the 17.7 percent really the same rate as a family making $15,000? That has to be wrong because tax brackets (let alone overall tax rate) are not that high for $15,000.

Any discussion of tax rates and percentages is always used by the Democrats and the left to to promote their idea of class envy and fairness. I would like to see more examples of dollars paid or dollar range paid instead of rates and percentages. For example: Buffett is in the $1,000,000+ tax due bracket and his secretary is in the $10,000 - $15,000 tax due bracket. Instead of hearing that a "big oil" Company got a 10% tax break, I would like to hear that they paid $--- in taxes, up or down from the previous year. Using Dollars instead of rates & percentages gives one a very different perspective.

There is no doubt - but what increasing taxes on the Middle Class (with enough capitol left to invest in anything) will cause our unemployment to skyrocket. Every single thing out there tells everyone to "save their money" because if any is spent to begin a small business - the folks opening their wallets will get mauled! One depression in my time - is enough for me! So I hope everyone will "open their eyes" and look elsewhere for "the one" to arrive; Obama is NOT "the one" to save anyone!

Brian, You are correct, Buffett is wrong on taxes. Capital gains/losses are incurred when investors move money between competing investments. I will go with Stock A over B, because I believe it has better value. I may believe it is a better value for a host of reasons. But over the market long-run A will only be chosen as an investment if is more economically productive. So why does it make sense for the gov't to impede investors moving their money over the long-run from less productive to more productive investments. Isn't more productive investment what helps everybody? Indeed it is. Furthermore, it is easy to prove Buffett incorrect. If he advocates increasing cap gains taxes to say 25% (pick your % du jour), ask him why gov't shouldn't tax it at 100%. If higher rates are better, why then is 100% bad? And if higher rates aren't better, then why don't we use a rate of 0%, and correspondingly reduce gov't spending, the real source of trouble.

This is yet one more reason why taxing income doesn't work. If we really wanted to have a fair tax system, Big Government would switch from taxing income to taxing consumption. The Fair Tax is just that: a repeal of the federal income, corporate income, & FICA tax while replacing them with one national sales tax. The more you spend, the more tax you pay. I like the Fair Tax myself but those who try to get it passed keep overlooking one thing: to really succeed, passing the Fair Tax isn't enough. First the 16th Amendment must be repealed, so that left-wingers can't slap the income tax back on us on top of the Fair Tax sometime later.

The one thing that could upset every "apple cart" out there would be if Obama went thru with plans most people now worry about: 401 being discarted! A lot of folks have suffered many years - to make sure they saved through this plan. If those people were to lose what they have done without to save - it could be a costly burden placed on a great deal of the population?! This, the higher taxes (in an economy that is already bankrupt) to come up with the money to "spread the wealth around" - grouped together will bring about "the great depression". And I mean as bad - or worse - than the one some of us remember! Yet, Democrats refuse to even LOOK at the possibility of Obama having problems (with his past). How is it possible - for that many people to follow like sheep - regardless of the number of "bad" things that come out? Makes me aware - that we are in for some pretty rough times - in the near future. I'm not even saying "don't vote for Obama". I'm saying the American people should at least be able to listen to all the messes starting to show up? We can all remember - when even a SMALL problem like this came up - folks wanted to know about the scandle before just laying down and quitting? People are a lot more gullible than they used to be. It will not be the downfall of me, personally. Because I am getting past my "prime" and don't have many years left. But it WILL effect those I love so much - in the years to come. Americans were always thought to be the smartest people (overall) in the world - but I'm not as convinced about that (as I used to be).

We can see clearly what the government has done with our tax money, the Iraq war, bailing out the banks and henry paulson's buddies, screwing up social security so that it is fairly obvious that while we pay, there WILL NOT be a social security check waiting for us, especially if god forbid we are one of those evil people who earns more than 250,000 a year. Why should we give the Government one penny more?! They have all but wasted and squandered our hard earned money and now want MORE? That is appalling and disgusting. Patriotism? Are you joking senator Biden, get back to planet Earth where the rest of us are.

Thus speaks the "Fair Tax". The only real way to spread the wealth and be fair to everyone. Why concern ourselves with what is earned...let's generate taxes to "Protect & Serve" the country thru the Fairest Tax of all...based upon what it spent. There are only a few misers out there who work hard to earn more and don't intend to spend it. If we aren't collecting income tax on illegal earnings (illegal aliens, cash only business, drug lords, and hiding money in of-shore accounts, etc), generate the tax when the money is spent. Drug lords don't sell drugs and hide income with the intention to save the money for retirement, they spend it, but if they don't report the income, we don't collect a dime. Why does it matter if the money Buffett spends is derived from Earned Income, Cap Gains, or inheritance...my guess is no matter where the "income" in generated from he spends more than his admin does. And what could be fairer...if you earn $50K each year and spend $40K and save some...collect the 15%, or whatever the rate might be, on the $40K spent. If Buffett earns $2B, and spends $30M (or whatever he burns through in a typical year) tax his spending at th same 15%...he earns more, he spends more, he pays more. You earn less, you spend less, you pay less...but we all pay the same rate...gee doesn't that sound fair? NO ONE wakes up in the morning, gets out of bed to go to work with the goal to earn a living to pay their taxes...they want to earn a living, take care of their family and SPEND the money they earn. If you don't want to work hard, and you earn less, guess what you have less to spend. Your problem, not mine. Even though the Lottery system is a voluntary tax system for stupid people, no one plays the lottery so they can pay a lump sum in taxes...they play the lottery with the intent to SPEND the winnings. One would think that the State & Feds would "earn" more in tax if paid on what is spent out of the lottery winnings than them skimming 30% off the top...let all that money get spent in the economy and it would most definitely generate more. We talk about all the money sent overseas paying for crude and energy, and we don't collect a penny on the income earned by some sheik in the Middle East...but if he sends his harem here to do some shopping, or makes a trip to Vegas to blow off some steam, then we can collect some Fair Tax when the bounty is spent. And guess what...they spend a LOT of money in the US... Overhaul the system, do away with the IRS, simpify taxes and grow the economy, and bring true fairness to all. I think it is so simple it only makes sense, but then the Leftists will loose the ability to blame the rich for all the country's ills and create class envy...Oh yeah and by the way, we also need to cut back on Federal spending at the same time. I live in Texas and we don't have a state income tax and guess which state is one of the only ones with positive growth in the down economy? Yeah we have a higher sales tax than many states but guess what...EVERYBODY pays it...

401K funds converted to Social Security-style pension scheme, "fairness doctrine", wealth redistribution, Warren Court as paragon of moderation, banned firearms list targeting the hunting rifle your grandfather gave you, percentage of GDP to world-wide welfare, codification of union thuggery, street level agitation trumping the Constitution....these people are Marxists and your criticisms will soon be silenced.

As the saying goes "Taxes are a necessary evil". I don't mind paying taxes, but it is the way in which we are all taxed that must change. Lets face it, at times we want the services of the police, we appreciate smooth roads and it is of the utmost importance that education in this country be the very best. However, the whole idea of credits and rebates, low income verse high is joke and its all about votes. I believe the only way to straighten the system out is to do away with the entire Federal tax system as we know it and implement the Fair Tax and pass a balanced budget amendment. The Fair Tax is a more dynamic system that will create more revenue for the government when the economy is good and less when the economy is bad. Notice I said revenue not higher taxes. Congress can not act as quickly to economic conditions as a simple percentage can. Where spending is concerned, pass a balanced budget amendment that limits government budgets and correlates to the lowest tax revenue of the last 5 years. By doing this, when the economy is slow, the government wouldn't borrow and when its good the government would have a surplus to put toward the debt. Business could make decisions based on profits not taxes. People could understand just how much they pay in taxes. I could go on but I'll encourage you to read up on your own. For those critics of the Fair Tax who say business would get a free ride, you're wrong. Ultimately the consumer pays all the taxes thru higher prices. Last thing I have to say, not as related, but important. Why does Congress not have term limits? With all the ethics problems, partisanship, misguided policies and lobbying taking place in Washington it is long over due that Americans rein in their government. Term limits would reduce their power considerably.

Warren Buffett and Bill Gates are the only 2 billionaires on earth that makes virtually nothing on salary AND bonuses. Every other billionaire on earth makes hundreds of millions of dollars a year on stock incentive bonuses --- that are the root of the problem of the current financial crisis. Stock incentive bonuses are INCOME.

I believe he is right. All income from all sources should be taxed the same. Why should a guy working his backside off and risking his life to hang off a roof all day and support his kids, get taxed more than the guy that sits at a computer selling his stock. Flat tax rates would be much fairer. Let Buffet pay 20% and take off 5,000 or so per dependant. Let everyone do that. Cut out all the rest of the deductions etc. and you will see a lot more common sense in business and out of it.

I started my business out of the back of my car and have been successful because I know my math. Because free markets are dynamic and not static, almost all revenue targets like me are already planning to change our behavior in order to minimize Obama's impending threat to our ability to continue doing business and thereby create jobs. If us revenue targets can't cut enough expenses to cover Obama's new dictated expense (yes taxes are considered just another expense by any rational entrepreneur), then we will be forced to raise our prices, thereby shifting the burden of higher taxes to our clients. Now most of my clients are in the very demographic that will be hurt more by these higher prices than they will be helped by the promised tax cut, assuming it is ever granted by the Washington elite. (Remember Clinton's unfulfilled middle class "tax cut"?) It's always the same story. Businesses are not going to absorb higher taxes or any other expense. Doing so puts the entire enterprise and the jobs it creates at risk of failure. Any business owner, including me, will get out before that happens. At that point, maybe Barack and his friends (do not forget about his dangerous friends) will be able to employ all 70 of my ex-employees as placard carrying protesters against successful people like me.

Just about all of Warren Buffet's income comes from Capital Gains on his Berkshire Hathaway stock, which is taxed at 15% instead of the 35% income tax rate. I don't know which taxes he thinks should be raised, but in my opinion the Capital Gains Taxes should be increased progressively just as the income taxes are.

The important thing to understand is that taxes are wrong on principle. The amount doesn’t matter. Government should not engage in the use of force to fund itself.

Funny how the hard-core libs are noticeabley absent from blogs about money and taxes backed up with hard facts. I challenge anyone to make a case for how "taxing the 'rich'" is good for our economy.