Skip to comments.
(April 11, 2015) Warren Buffett’s Nifty Tax Loophole
| April 11, 2015
| Morris Propp
Posted on 10/11/2016 3:22:26 PM PDT by CruiseMates
Warren Buffett is fond of saying his tax rate is lower than his secretarys. He does not publicize his tax returns, but for the tax year 2010, he paid $6.9 million on taxable income of $39.8 million, according to partial disclosures he made in 2011.
What is astounding about those numbers is not the 17.3% tax rate, but that Buffetts $39.8 million of taxable income is only about 0.05% of his reported net worth ($71 billion according to Forbes, which put him third on its list of the 400 wealthiest people in the world for 2015).
(Excerpt) Read more at barrons.com ...
KEYWORDS: incometax; loophole; trumpbuffet; warrenbuffet
This is an older piece, but it is timely with Buffet calling out DJT to compare tax records. It seems both Billionaire's are paying what the law dictates, but in Buffet's case he is holding back far more revenue for the "Military, Vets and Children of America" than DJT.
Headline is terribly misleading— “income” and “net worth” are very, very different things.
To: CruiseMates; Admin Moderator
Warren Buffet Only Pays .05% tax on his income....Buffetts $39.8 million of taxable income is only about 0.05% of his reported net worth
Income is not net worth......
And you shouldn't alter the title.....aside from your error.
posted on 10/11/2016 3:27:26 PM PDT
("Telling the government to lower trade barriers to zero...is government interference" central_va)
Conservatives should boycott every part of Buffett’s empire at every opportunity.
posted on 10/11/2016 3:30:15 PM PDT
(Halten Sie sich unbedingt an die Lehre!)
Please do not alter the title. It makes Search not work and results in duplicate postings. Thanks.
posted on 10/11/2016 3:39:13 PM PDT
by God luvs America
(63.5 million pay no income tax and vote for DemoKrats...)
...but in Buffet's case he is holding back far more revenue for the "Military, Vets and Children of America" than DJT.
How do we know that?
If I understand Buffet’s scam correctly, basically the value of his stock is so high because he doesn’t distribute many dividends or capital gains brought in by the underlying assets which are held in his shares - thus he doesn’t have to pay taxes on that income and it is built up instead in the value of his shares - pretty slick - he could certainly pay lots more if he were really concerned about “fairness” in the tax code......
To: Intolerant in NJ
I think Buffet also purchases tax-free municipal bonds.....as per their name, no tax is due.
A net worth of $71 billion? Wow.
The article should also point out the lie about Buffet’s “secretary's” salary. He brags that the “secretary” pays a higher tax rate than he pays. His “secretary” is actually an executive at his company. The total salary is north of a quarter million a year, making the secretary a “one percenter”. There is little to dodge for someone on a salary, so the “secretary” pays the top income tax rate in the country.
To: Intolerant in NJ
If I understand Buffets scam correctly, basically the value of his stock is so high because he doesnt distribute many dividends or capital gains brought in by the underlying assets which are held in his shares - thus he doesnt have to pay taxes on that income and it is built up instead in the value of his shares - pretty slick - he could certainly pay lots more if he were really concerned about fairness in the tax code......
That's not a scam. Having things that change in value isn't income until they're sold.
Yes of course - the scam is he locks up the value of his assets in the price of his stock - Berkshire-Hathaway climbs into the thousands of dollars per share range and everybody says he must be a financial genius - he cashes out behind advantages such as the evil Donald Trump used - loss carryovers and depreciation deductions and pays the rest at low long term gain rates - then he goes all self-righteous complaining that his “secretary” pays more taxes than he does and that rich people should be paying more of their fair share......
To: Intolerant in NJ
Yes of course - the scam is he locks up the value of his assets in the price of his stock... loss carryovers and depreciation deductions and pays the rest at low long term gain rates...
I don't know the full complexities of the tax code, and I'm sure he has plenty of shady stuff going on. But the loss carryover isn't really shady, it's lost money that he actually lost. Not just numbers on paper. And as much as I think tax code needs to change, removing that from the code as it stands now will do way more damage to small businesses and individuals than the amount it's currently helping the billionaires. Depreciation is just stupid as well.
thus he doesnt have to pay taxes on that income and it is built up instead in the value of his shares - pretty slick - he could certainly pay lots more if he were really concerned about fairness in the tax code......
This isn't a scam, owning something that increases in value isn't income. When he does cash out, he'll be taxed on that actual income. I don't think people should be taxed on their land property either.
I have no problem with the tax code - it doesn't bother me that Buffett uses the code to the max - my complaint is that having used it, he turns around and self-righteously proclaims that he doesn't pay enough taxes, that his tax bill is less than his "secretary's" (really a highly-paid administrator) and that the rich in general should be paying more of "their fair share" (even though the top 1% of earners pay 40% of the federal income tax, easily more than their "fair share") - it's deceitful, done to help Buffett shield himself from criticism from the public who resent the rich - if he wants to pay lower taxes, he should just abandon some of the tax breaks he takes.
When an asset is held as an investment and increases in value, and is then cashed out (sold), tax is owed on the difference between the purchase and the sale prices - if the asset is held for less than a year in most cases this is considered a short-term gain and is taxed at ordinary income rates - if held for more than year it is a long term gain and is taxed at a considerably lower rate than ordinary income - this is another place where Buffett probably uses the tax code to his advantage - by keeping assets locked up in his shares for years and years he undoubtedly pays taxes on the sales of the shares at long term rates - then turns around and complains about it.....
Opinions posted on Free Republic are those of the individual
posters and do not necessarily represent the opinion of Free Republic or its
management. All materials posted herein are protected by copyright law and the
exemption for fair use of copyrighted works.
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson