Posted on 11/27/2012 11:39:29 AM PST by STARWISE
Warren Buffett is by now no stranger to the national debate over federal tax policy. In 2009, he penned a New York Times op-ed calling for "truly major changes in both taxes and outlays." Two years later, he returned to the Times with a widely publicized call for large tax increases on the "super-rich," noting that his own effective federal tax rate (17 percent) was far less than his employees' rates (ranging from 33 to 41 percent). President Obama liked the idea so much, he called for Congress to pass "the Buffett Rule" in his 2012 state of the union address.
Given that long, well-publicized history, there isn't much news to be found in Buffett's latest Times op-ed this morning, calling once again for a minimum tax on millionaires. Except that Buffett opens this one with a rifle shot at Grover Norquist specifically, and supply-side economics generally:
Suppose that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”
Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.
It's a catchy opener, attracting headlines and guffaws from the expected quarters.But I'm struck by his opener because I can think of at least one real-world example in which a rich investor nearly spiked a deal due to taxes: Warren Buffett himself, as recounted in Alice Schroeder's terrific biography, The Snowball (pages 230-232).
Early in his career, Buffett invested heavily—almost one third of his early fund's capital—in Sanborn Map, a company that mapped utility lines and such. But he soon grew frustrated with the company's leadership, which "operated more like a club than a business," and which refused to return greater dividends to investors. So Buffett amassed more and more stock, and with control of the company finally in hand he pressed the board of directors to split the company in two (one for the mapping business, and one to hold the company's other outsized investments).
Finally, the board capitulated. But with victory finally at hand, Buffett nearly scuttled the deal because of ... taxes. As Schroeder recounts, quoting Buffett, one director proposed that the company just cleanly break the company, despite the tax consequences—"let's just swallow the tax," he suggested.
To which Buffett replied (as he recounted to Schroeder):
And I said, 'Wait a minute. Let's -- "Let's" is a contraction. It means "let us." But who is this us? If everyone around the table wants to do it per capita, that's fine, but if you want to do it in a ratio of shares owned, and you get ten shares' worth of tax and I get twenty-four thousand shares' worth, forget it.'
Buffett was willing to walk away from a deal because the taxes would have taken too much of a bite out of it. Fortunately for him, the board gave in and allowed him to structure the deal that he liked, saving him from his own Norquistian response.
Rest @ link
October 6, 2011 - Warren Buffett, the Keystone Pipeline, and Crony Capitalism
*snip*
A year after the election of Obama, Warren Buffett bought a giant railroad, the Burlington Northern Santa Fe. The BNSF has more than 32,000 miles of track and right-of-way in this nation, running from the west coast and through the agricultural heartland of America. It is also hauls coal from the mines in Montana and Wyoming and is the railroad with the best existing north-south infrastructure. In fact, it's quite well-situated to perform precisely the task for which TransCanada has proposed to build a pipeline.
Should the pipeline fail, the oil will still be extracted, but it will then be transported by rail, and Mr. Buffett, thanks to the efforts of his friend Mr. Holland, will be uniquely situated to derive a fortune from that business, as well as enhance the value of his holdings in Conoco-Phillips petroleum. Is it possible that Warren Buffett's assistance to Obama in both policy and public relations lately may be his way of trying to tip the regulatory scales in his favor? After all, nothing says "I love you" to a Democrat better than a public plea for more taxes.
In any case, the opposition to the pipeline is not only tainted, but intellectually and scientifically bankrupt. BOLD Nebraska are correct when they screech that there is an agenda being served here, but it is not big oil, environmentalism, or even green energy; it appears to be garden-variety crony capitalism, an Obama administration specialty.
*****
No pipeline .. and it will not willingly be allowed to happen as long as this cretin pursues his 'help my comrades' mission. I despise these heathens, crooks and liars.
Buffett is so full of crap. A classic example of “do as I say not as I do”-—much like Algore.
Buffett says rich folks like himself should pay more taxes. Yet he is currently setting up his estate so that private tax-exempt foundations like the Gates Foundation will end up getting the bulk of it. The IRS will get very little or nothing when he dies. Buffett knows full well that the federal government wastes money. That’s why is is making sure they will get very little of his money. Nothing wrong with that, of course. It’s when Buffett gets on his soap box saying the rich like him should be paying more when he is busy at work sheltering as much of his income and assets as he possibly can from the tax man. No one is stopping Buffett from whipping out his wallet and writing a check to Uncle Sam. What a big phony and a hypocrite. I’m sick of his sorry ass and his pontificating.
*ping*
Buffett also lies about the effective tax rate of his secretary, and by extension, most wage earners, when he claims they pay a higher effective rate than he does. It’s BS and he—and the media—should know it. Most wage earners have effective tax rates ranging from a negative (earned income credit), to 10% or less. Most “average” wage earners have effective tax rates around 5%. For Buffett and the media to continue peddling this false narrative ought to be an indicator of their ignorance and dishonesty.
Buffet owes back taxes. I’m sick of this geezer’s preaching!
Buffett advocates higher income taxes, which is very easy for him to say because he already has his. Never mind watching what he does, what he says is bad enough.
Thanks for the ping. I used to think that Buffet was a conservative, but he has sorely disappointed me, and I will neither respect nor listen to him again. He’s a snake.
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