Sometimes a person can be so wealthy that he loses touch with the common man. According to popular myth, Marie Antoinette was so divorced from the plight of the peasants that hearing they had no bread to eat, suggested "qu’ils mangent de la brioche" ("Let them eat cake").
Warren Buffet, fluctuating between being the second or third richest man in America, has informed us that he (and by extension, every rich person) pays too little in income taxes (1) in terms of percentage. As for proof, he confessed that his effective tax rate is 17.7%. Then taking 15 volunteers from his office personnel in Omaha, Nebraska calculated that not one had an effective tax rate below 32.9%.
Of course, this is all smoke and mirrors. Mr. Buffett pays exactly the same rate on the first $102,000 of income as do his employees. Since FICA taxes stop at that point, anyone making more than that amount will have a lower tax rate. Should rich people continue paying the FICA tax on the rest of their income just to make Buffett happy? They certainly are not going to collect millions from social security when they retire. If we followed Warren Buffett's suggestion then someone making 10 million a year will pay an extra $765,000 a year into social security with no hope of ever getting back any fraction of a fraction of that when he retires. Is that fair? There are over 7,500,000 millionaires (2) in America and if they don't have enough cash to pay more in taxes, then what? Let them cash in their stock, or as the French would say, "Let them eat cake?"
Since Warren seems to be an idiot these days, let me make a simple suggestion: if you feel you're paying too little in taxes, then simply write a check and pay more (3), you goofball, but kindly leave everyone else alone.
Now it is very difficult to call someone who is worth tens of billions of dollars an idiot, but that is what he is now. He once had smarts but sadly this drooling, babbling moron has lost most of his little gray cells.
I don't think anyone really knows what he is suggesting. Does Buffett want everyone pay FICA taxes without limitation? Do we then give these rich fatcats a few hundred thousand a year when they retire? Or do we just raise the tax rate simply because they are rich?
Buffett Is Not Being Honest
One of the reasons Buffett pays a lower tax rate is that most of his income is not from a salary, but from tax exempt or lower-taxed streams of income. Is he suggesting that we eliminate non-taxed income or tax-free bonds? If we did that, then cities and states would have to pay more in interest to lure investors to their bonds. And if those government entities paid more in interest then they would have less money for services that the poor and middle class utilize more than rich people do. Those entities would in fact have to raise sales taxes to make up for the shortfall and consequently the non-rich would suffer more since more of their income goes to purchases as opposed to investments.
I thought the "Sage from Omaha", generally regarded as the most successful investor of all time, had some knowledge of how high taxes cripple investment, industry, the stock market, and employment. But I suppose when you are so far removed from the common man, you have no clue of what their options are when the economy sours, as it will under his suggestions.
So here is Warren Buffett's advice in case you are fired because your employer cannot afford to pay you because that money is now going to the Federal Government: "Can't pay your mortgage? Cash in 100 shares of Berkshire Hathaway Stock (currently $133,800 per share) and simply pay off the bank entirely and retire."
What an idiot!
I know I spelled Buffett's name incorrectly in the title, but I cannot change it without losing links to this article.
BlueOregon, 30 Oct 2007, Warren Buffett Thinks He's Not Paying Enough in Taxes
Brian Williams: (There's) a looming tax fight in Congress. The Democrats want to revamp the tax structure and get rid of some of the loopholes that the wealthy and corporations enjoy to pay less taxes. And it may surprise you to learn that one of the universally accepted richest guys in the world, Warren Buffett, feels he pays too little by percentage.
In our office 15 people cooperated in a survey, out of 18, I didn't make anybody do it. And my total taxes paid, payroll taxes plus income tax, mine came to 17.7 percent. The average for the office was 32.9 percent. There wasn't anybody in the office, from the receptionist on, who paid a lower tax rate. And I have no tax planning, I don't have an accountant, I don't have tax shelters. I just follow what the U.S. Congress tells me to do.
CNN Money, 25 May 2005, Number of millionaires hits record
The number of millionaires in America reached record highs in 2004, hitting 7.5 million, according to a new survey.
That represented a gain of 21 percent, the largest jump in the number of U.S. millionaires since 1998, according to the survey by the Spectrem Group, a Chicago-based research firm.
Spectrem counted Americans with net assets of $1 million or more, excluding primary residences but including second homes and other real estate holdings. There were 6 million millionaires in 2001, when the bursting of the tech-stock bubble pruned more than a million Americans from this status.
Big Dogs Weblog,
So What's Stopping Warren Buffett?
Warren Buffett, the billionaire ho has not yet found a way to enjoy his wealth, complains that he does not pay enough income taxes and states that he pays less than his employees who make far less money. Buffett indicated that he does not have accountants and all that (I find that hard to believe) and that he just follows the government's rules and he ends up paying less in taxes than he feels he should. I have news for Mr. Buffett; the treasury will accept money from citizens who want to pay more in.
If Buffett feels so terribly guilty about not paying enough in taxes then I suggest he ease that guilt by going to Treasury Direct and following the instructions on how to reduce the debt through voluntary donation. This should ease whatever guilt Mr. Buffett feels.