Sunday, July 01, 2007
Warren Buffet's Tax Knowledge is Questionable
Or is the agenda more important?
Sadly, the media published this all as if it were true.
Shouldn't they be fact-checking like IBD did...
Sadly, the media published this all as if it were true.
Shouldn't they be fact-checking like IBD did...
Investors Business Daily did some math:
"Billionaire Warren Buffet, sage of Omaha, is a man we admire as an investor. He's done a brilliant job of ferreting out value from stocks that are out of favor. He's made many people rich, and that's a noble thing. But when he mounts a political dais at a $4,600-a-plate fundraiser for Sen. Hillary Clinton, and begins saying things that just can't be true, we start to wonder why.
Buffett told Clinton's supporters he makes $46 million a year in income, but is taxed only at 17.7%. Meanwhile, he claims, his secretary pays 30% in taxes, and the rates for others who work for him are as high as 39.7%.
...
Sounds unjust, if true. But we don't know what tax system Buffett is looking at. It certainly isn't the one we use here in the U.S. We went to the IRS' Web site and used its tax calculator. We put in various incomes, from $50,000 to $350,000 a year — the latter being quite a bit for a secretary to make in Omaha.
...
Here's what we found: At $50,000, the IRS asks for 13.5% of your income. At $75,000, it's 17.3%. You can keep going all the way to about $350,000 before you're in spitting distance (28.4%) of what Buffett's secretary supposedly pays."
Comments:
<< Home
Fuzzy tax math? Did you include FICA in your calculation. Mr. Buffet pays FICA on only the first $100,000 (approx) he makes, his secretary probably pays on her entire salary.
Also his secretary "earns" her income -- you know, she works for it. Earned income in this country is taxed at a higher rate than "investment" income such as capital gains and dividends. I'll bet much of Mr Buffet's income is investment income. Did you get that far in your research, or simply stop at the IRS tax calculator (which, BTW, shows marginal tax rates)?
I believe Mr Buffet has a standing bet with any one on the Forbes 500 list that they pay a lower effective tax rate than their employees. As far as I know, no fat cats has taken him on his wager.
Also his secretary "earns" her income -- you know, she works for it. Earned income in this country is taxed at a higher rate than "investment" income such as capital gains and dividends. I'll bet much of Mr Buffet's income is investment income. Did you get that far in your research, or simply stop at the IRS tax calculator (which, BTW, shows marginal tax rates)?
I believe Mr Buffet has a standing bet with any one on the Forbes 500 list that they pay a lower effective tax rate than their employees. As far as I know, no fat cats has taken him on his wager.
# posted by 
: Sat Feb 09, 09:23:00 AM EST
: Sat Feb 09, 09:23:00 AM EST
Thank you for your comment.
I don't really disagree with you.
The actual article does include an FICA scenario, but discounts it as it is money eventually returned via SS payouts during retirement.
As far as the source of Buffett's income, I'd be foolish to think it wasn't 99% investment income, which I believe is taxed less than earned income because there is the risk of loss.
Overall, I suspect Mr. Buffett "cherry picked" his numbers and that they are accurate for his purpose. I also suspect that IBD did the same for their purpose.
For me, the tax laws are the issue. They are far too pervasive and complex to exist in a country that came into existence because of those very same issues.
For that reason, I have issues with anyone who advocates more or higher taxes.
Post a Comment
I don't really disagree with you.
The actual article does include an FICA scenario, but discounts it as it is money eventually returned via SS payouts during retirement.
As far as the source of Buffett's income, I'd be foolish to think it wasn't 99% investment income, which I believe is taxed less than earned income because there is the risk of loss.
Overall, I suspect Mr. Buffett "cherry picked" his numbers and that they are accurate for his purpose. I also suspect that IBD did the same for their purpose.
For me, the tax laws are the issue. They are far too pervasive and complex to exist in a country that came into existence because of those very same issues.
For that reason, I have issues with anyone who advocates more or higher taxes.
<< Home
