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Liberalism: Why think when you can “feel”?

Delicious irony of the day, “Warren Buffett’s taxes” edition

You think maybe billionaire Warren Buffett, the guy whose team of accountants are hired to minimize his tax liability while he complains about not paying enough taxes, might want to pay his own friggin’ taxes before he opens his cakehole about everyone else paying their “far share”?

Excerpt:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.

NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.

Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax — an excise tax on payments made in exchange for air transportation — to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.

The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’claims and alleged that four of the company’s units owe unpaid taxes and penalties.

Heh.

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March 10, 2012 Posted by | irony, taxes, Warren Buffett | 3 Comments

Warren Buffett and his secretary still misleading America

That poor woman!  She has to pay a higher tax rate than her billionaire boss!  Yeah, about that

Warren Buffet’s secretary, Debbie Bosanek, served as a stage prop for President Obama’s State of the Union speech. She was the President’s chief display of the alleged unfairness of our tax system – a little person paying a higher tax rate than her billionaire boss.

Bosanek’s prominent role in Obama’s “fairness” campaign piqued my curiosity, and I imagine the curiosity of others. How much does her boss pay this downtrodden woman? So far, no one has volunteered this information.

Insofar as Buffet (like Mitt Romney) earns income primarily from capital gains, which are taxed at 15 percent (and according to Obama need to be raised for reasons of fairness), we need to determine how much income a taxpayer like Bosanek must earn in order to pay an average tax rate above fifteen percent. This is easy to do.

The IRS publishes detailed tax tables by income level. The latest results are for 2009. They show that taxpayers earning an adjusted gross income between $100,000 and $200,000 pay an average rate of twelve percent. This is below Buffet’s rate; so she must earn more than that. Taxpayers earning adjusted gross incomes of $200,000 to $500,000, pay an average tax rate of nineteen percent. Therefore Buffet must pay Debbie Bosanke a salary above two hundred thousand.

We must wait for further details to learn how much more than $200,000 she earns. The tax tables tell us about average ranges. For all we know she earns closer to a half million each year, but that is pure speculation.

Look, that meme has been tackled a billion times.  Buffett paid taxes on income, then used that after-tax income to invest…then had to pay taxes again, this time on money generated from his after-tax investments.  When your primary source of revenue is from profits resulting from investments made with after-tax income, your tax rate isn’t going to be the same. 

Capital gains tax rates are lower, and when they were cut during the 1990’s (reluctantly by Bubba), the stock market ROARED to life as investors flocked to it.  As a result of the new influx of investors and investor activity, revenues to the government increased after the capital gains tax rate cut.  Wait…you mean cutting taxes increased revenue to the federal government?  Yeah, go figure.  Turns out that decreasing certain tax rates promotes economic activity and increasing certain tax rates discourages economic activity.  Who knew, right?

So, Warren Buffett pays his secretary between $200-$500k a year in salary.  Good work if you can get it, I suppose.  So I’m thinking that maybe this “my billionaire boss pays a lower tax rate than I do” schtick is just a tad old…and disingenuous.  Besides, Warren Buffett is more than welcome to send more money to D.C., but he hires accountants and tax planners to avoid doing just that…all while complaining that he doesn’t pay enough.  My turbocharged Hypocrisy Tolerance fuel tank is on fumes, I’m afraid.

January 26, 2012 Posted by | economic ignorance, hypocrisy, taxes, Warren Buffett | 7 Comments