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Warren Buffett: Stop coddling the super rich

nytimes.com

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Re: Warren Buffett: Stop coddling the super rich

#301

Post by perfunctory »

dantheman wrote: post #109
rdtsc wrote: post #54

Earlier quoted context omitted.

I bet it wouldn't phase them a bit. They would create a watchdog professional organization (see US Chamber of Commerce) that makes sure local elections and appointments are influenced just as effectively as federal ones. This already happens in judge elections in many states. Certain "business-friendly" candidates are showered in campaign money, with the expectations that when certain cases are appealed those judges…

It's easier for people to control their government at the local level, than at the national level. For instance, the city of Cambridge a year or so ago removed all the DHS cameras that were put up after 9/11. That wouldn't happen if they were controlled at the national level. Look at gay marriage or marijuana, only a problem at the national level - let the states do what they want; it's less of a chance of one group…

> being able to vote with your feet is much better than voting in an election.

I've had this idea for a while already. Indeed, it would be interesting to set up a free market system for the governments. US seems to be an ideal place for this sort of experiment given the ease of movement. Competition between states could be quite healthy.

Re: Warren Buffett: Stop coddling the super rich

#302

Post by travisp »

ender7 wrote: post #298
DanielBMarkham wrote: post #291

Once I realized that you could take all the money from the rich, stop all defense spending, and still have a massive budget problem? These sorts of things stopped being an issue for me. Seriously folks, it's a red herring, an issue created to make sure that one party has something to fight the other party over. If you want to sack the rich, have at it. Just don't pretend that by taking that position you are doing any…

Please supply a source for your claim in your first sentence.

The entire net worth (not income) of all billionaires in the United States may be about $1.3 trillion[1]. Therefore, if you took all of the money currently held from all U.S. billionaires, you would decrease the national debt by about 10%, or cover the deficit for just one year. A high (say, 90%) income tax rate would presumably bring in even less.

1 - http://www.moneycontrol.com/news/business/interesting-number...

Re: Warren Buffett: Stop coddling the super rich

#303

Post by Andrew_Quentin »

[deleted] wrote: post #292
Andrew_Quentin wrote: post #244

Earlier quoted context omitted.

I think there is a point about fairness as well. Taxes are progressive for a reason. Those with the broadest shoulders should bear the greater burden. Warrent Buffet is perhaps giving away a lot of what he maybe would have given in taxes but plenty of billionaires or super rich just spend it on their spoiled sons and daughters, some who end up in rehab, spent a tremendous amount of resources to create a parallel soci…

[deleted]

It actually was not a broad brush, you just chose to not quote the full sentence I wrote.

Re: Warren Buffett: Stop coddling the super rich

#304

Post by JabavuAdams »

kahawe wrote: post #293
JabavuAdams wrote: post #278

Earlier quoted context omitted.

Because no such limit exists. Yes, there are a lot of people spending mega-bucks on what I consider frivolities -- utter waste. But, there are others starting space programs. I don't want to lose the latter.

You are trying to tell me that someone like Warren Buffet with a net worth of $50 billion can really actually make good use of all that money? I know, "there can never be enough" out of principle. But really, with 50bn I imagine you could not (sanely) possibly spend it fast enough in a way where you get something out of it or in return; it would grow back faster in interest than you can dish it out.

Well, assumed you were talking about sums Now, suppose we wanted to cap individuals at say $2B. How would this actually work? That's not cash that's lying around. Almost all of Buffett's wealth is in equity of Berkshire Hathaway. He can't sell that without also losing ownership of BRK. Is BRK worth as much without Buffett and/or the people he's explicitly groomed?

Billionaires are billionaires not because of their income, but because of the assets that they control.

Re: Warren Buffett: Stop coddling the super rich

#305

Post by DanielBMarkham »

ender7 wrote: post #298
DanielBMarkham wrote: post #291

Once I realized that you could take all the money from the rich, stop all defense spending, and still have a massive budget problem? These sorts of things stopped being an issue for me. Seriously folks, it's a red herring, an issue created to make sure that one party has something to fight the other party over. If you want to sack the rich, have at it. Just don't pretend that by taking that position you are doing any…

Please supply a source for your claim in your first sentence.

I would appeal to simple reasoning: everybody has known that the U.S. is on an unsustainable spending curve due to entitlements for the last decade or more. The only thing that changes is how politicians choose to spin it from year to year. If you create a system where politicians get elected promising to spend money that doesn't exist, then such a system will outgrow any amount of revenue you can throw at it. If you somehow changed the rates right now and squeezed enough out of the economy to make it all balance? Ten years from now some new bunch of guys will be running on a platform to provide SUVs in every driveway or something equivalently intellectually sexy and emotionally attractive. It's simply too enticing not to.

But you asked for something solid, so here's the result of some random Googling. Note that it's a little unfair for this author to use the current year's deficit in this calculation, but then again with growth rates where they are it's only a decade or so until such spending will be commonplace even in a frugal environment.

http://billwhittle.net/?p=562

There are about 400 billionaires with a total net worth of around $1.3 Trillion.

Seriously, this entire discussion all boils down to how honest you can be about how the system is broken, not which party is to blame, how much the rich should pay, whether or not we need more or less government, or any of that. All of that nonsense is just bullshit to keep you coming out to vote.

I'd also point you to a graph of total debt as a percentage of GDP. http://www.usgovernmentspending.com/federal_debt_chart.html Even if you argue that the last year or two is somehow "special" (A common theme when its your guys spending the money) It's plainly clear that the trajectory leads to default in a very short amount of time.

Re: Warren Buffett: Stop coddling the super rich

#306

Post by DanielBMarkham »

travisp wrote: post #302
ender7 wrote: post #298

Earlier quoted context omitted.

Please supply a source for your claim in your first sentence.

The entire net worth (not income) of all billionaires in the United States may be about $1.3 trillion[1]. Therefore, if you took all of the money currently held from all U.S. billionaires, you would decrease the national debt by about 10%, or cover the deficit for just one year. A high (say, 90%) income tax rate would presumably bring in even less. 1 - http://www.moneycontrol.com/news/business/interesting-number...

Yes. Also note that the super rich, as Buffett points out, make money by investing, not by regular income. The purpose and art of investing is to place money in the best spot. So if you took all the money they had, you'd be a trillion or two ahead, a huge amount of investing would stop, and there would be no more money from them in the pipeline. If, instead of sacking wealth you stuck with income only (perhaps with progressive rates), somebody would simply do the math and put the funds in tax-free bonds or something.

Money, especially money of this scale, works for people. It will find the best spot to stay untouched and continue to work. You don't pay an accounting firm and tax lawyers in the six or seven figures for nothing. In fact, many argue that the way you get rich is to be a better steward of money than the other guy. If you took 100 people, gave them each a million bucks, in a year only one of them would probably have kept it and increased it. Odds are that was the guy who was already rich to start with -- who already had good habits and wise spending strategies.

I mean honestly, there's a wee bit of irrationality in Buffett's position. You don't get wealthy by putting your money in places where it disappears, so why would somebody who was super frugal and managed to plan where each and every penny went leave his money in a spot were it would decrease drastically if he didn't have to? Buffett's going to haggle and fight tooth and nail over some small sub-percentage points on a huge acquisition and then not manage his own money so that it works optimally? Huh?

Re: Warren Buffett: Stop coddling the super rich

#307

Post by a5seo »

dmayle wrote: post #24
a5seo wrote: post #9

What's missing is an estimate of the revenue impact of doing what Buffet suggests. I've always heard that this kind of policy would add little to revenue, because there is simply far more tax money available by taxing earned income.

If you just count the top 400 income earners in the US that he mentions in the article, and they restore the the 1992 rate of 29.2% (as opposed to the 21.5% of 2008), then we're talking about 7 billion dollars

So here's a question- if you follow Buffett's logic, then a guy who builds a company for 40 years, most likely goes with barely any income in some years, and sells it for $10M when he retires, that guy gets slapped with a 100% tax increase.

Buffett doesn't differentiate the Walton kids who inherited billions and assuredly live off capital gains their entire lives from the entrepreneur who makes $10M that ONE year of his life that he sells his company.

Buffett claims that the tax rate in fact was of no consequence to his behavior. Well, I guess if you're in the business of speculation, that's true... you must invest/speculate because that IS your job.

But the same is not true for entrepreneurs who build stuff. What's the entrepreneur's incentive to build his company and to wait to reap his gain if his gain is taxed like ordinary income? Why not just pull income out of his company instead of reinvesting it? On the margin (that's the key), this tax policy will affect entrepreneurs decisions.

I've read Snowball, Buffett's biography, and it's pretty clear Warren has never built a company that serves customers. He's always been a speculator.

Bottom line, Buffett's proposal would have punishing consequences on entrepreneurs who earn big windfalls a handful of few times in their lives. That absolutely WILL have consequences on entrepreneurs decisions and risk/reward tradeoff.

Unless a policy to tax the super rich is proposed that doesn't somehow have that pernicious side effect of treating entrepreneurs' gains as earned income who see precious few windfall gains in their lives, I'd never support it.

There's a reason why society created lower tax rates for capital gains. Perhaps we should go back and study them.

Re: Warren Buffett: Stop coddling the super rich

#308

Post by wpietri »

yyyyyyyyyi5 wrote: post #234
wpietri wrote: post #226

Earlier quoted context omitted.

Suggesting the bottom 1% has game consoles and smartphones is a) ridiculously wrong, and b) irrelevant. Regarding wrong, The bottom 0.2% don't even have housing , which is going to make a game console hard to use. The I was talking just this morning with somebody doing financial literacy programs, and they decided against doing a web or smartphone tool because most of the people they are trying to reach don't have re…

This is getting absurd. What I find a ridiculously disgusting is your pretentiousness is assuming how poor Americans live. You're justifying your argument based on a shoddy and superficial experience with poor people? My family immigrated from a third world country and the adult members earn ~$20K salaries. The children have a free and subsidized $10K+ education, is safe (yes, the ghetto isn't on high alert for drive…

As I explained elsewhere in the thread, adult members (plural) earning ~$20k means (depending on number of children) you probably aren't poor, or at least not very poor. 12.9% of households earn under $15k, 24.7% earn under $25k, and 35.6% earn under $35k:

http://www.census.gov/compendia/statab/cats/income_expenditu...

The use of subsidized education and dental services helps to prove my point, which is that the poor in America don't have much to give up, and need the assistance (government and otherwise) that they're getting.

Also, emergency room access does not equal medical care. It does mean emergency care, but it does not mean preventative or chronic care. For example, it means you won't have a doctor helping you avoid diabetes and you won't get your diabetes treated. However, they will amputate your gangrenous toes once the disease develops that far.

I'm really glad that your family has done well. Every family should do at least that well. Many don't.

Re: Warren Buffett: Stop coddling the super rich

#309

Post by callmeed »

stanleydrew wrote: post #297
callmeed wrote: post #190

Earlier quoted context omitted.

Agree completely. I think the problem is that $250K is around that "top 1%" mark. It's a convenient demarcation line and makes for a smooth soundbite. What many don't get is that the bottom of the top 1% includes doctors, attorneys, and entrepreneurs.

Why do the professions of those at the bottom of the top 1% matter?

Because they're not making money from investments—therefore they're not really getting tax breaks.

Re: Warren Buffett: Stop coddling the super rich

#310

Post by stanleydrew »

callmeed wrote: post #309
stanleydrew wrote: post #297

Earlier quoted context omitted.

Why do the professions of those at the bottom of the top 1% matter?

Because they're not making money from investments—therefore they're not really getting tax breaks.

Ah yes, good point.
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