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Source link: http://archive.mises.org/18100/warren-buffett-begs-tax-me-more/

Warren Buffett Begs “Tax Me More”

August 16, 2011 by

Warren Buffett should feel free to donate all the money he wants to the government, but his plan to have the government forcibly extract more wealth from the so-called wealthy amounts to advocating robbery from a sector that is a major contributor to economic growth. In general, he is getting worse and worse, and he is living proof that investor billionaires wouldn’t make good political leaders.

{ 30 comments }

J. Murray August 16, 2011 at 9:32 am

What do you expect from a man who gives thanks to special subsidies for his fortune? I can’t name a company he invests in or outright owns that doesn’t get extreme special priveleges from the taxpaying public, usually at his own personal behest.

Julien August 16, 2011 at 10:10 am

Very interresting, sir, would you have precisions on that so I can throw it to the face of my chuckling friends?

Thank you.

Michael August 16, 2011 at 10:15 am

I think Julien is asking for ‘references’… :) I would like them, too.

J. Murray August 16, 2011 at 10:28 am

A list of Berkshire holdings:

http://www.cnbc.com/id/22130601/

And a list of owned companies:

http://www.berkshirehathaway.com/subs/sublinks.html

For instance, BNSF Railways is owned by Berkshire outright, and here’s a nice subsidy granted to them for “recovery”:

http://www.berkshirehathaway.com/subs/sublinks.html

This is on top of previous major upgrades to the rail network paid for by the generosity of the taxpayer, including major upgrades in the Northeast.

Just one example upon many.

Michael August 16, 2011 at 10:40 am

Thanks! Always good to have more information… I wish the article above would go into detail on stuff like this.

Julien August 16, 2011 at 11:32 am

Your third link appears to be wrong. And I agree that this should be the subject of a full article.

J Cortez August 16, 2011 at 11:49 am

If I recall correctly, Buffet also had an interest in Goldman Sachs, which was the beneficiary of some government money in this last bust.

Eric Bandholz August 16, 2011 at 9:36 am

As I said on twitter, if he wants to give money to the US Treasury, no one is stopping him. http://1.usa.gov/oOuZbg

D. Wilkins August 16, 2011 at 10:26 am

I must preface my comments by saying I have been a longtime admirer and student of Warren Buffett and have learned a great deal about the practice of investing from this very exceptional businessman. That said, I have been quite conflicted for some time about “Uncle Warren.” You see, I’m also a student of the Austrian School and an avowed Libertarian. My worldview is somewhere between Ayn Rand and Murray Rothbard. My basic question is this: Do the tenets of Collectivism–egalitarianism, self-sacrifice, duty, loyalty, destiny, etc.–truly guide Buffett’s outlook on life, or is he, in the tradition of the great Robber Barons, a Machiavellian Statist who slyly pursues self-interest in concert with the Feds while packaging it all in a way that flatters the masses? Maybe it doesn’t matter.

Ned Netterville August 17, 2011 at 9:17 pm

Anyone who would advocate for the State to forcibly tax his neighbor, rich or poor, is a weasel, and a cowardly one at that. Warren, why not get a gun and take the money from those other rich guys yourself, instead of sending IRS hoodlums to do your dirty work for you? The sounds I hear is his businesses noisily sucking up OPM (sounds like opium, is equally addicting, stands for other people’s money) from the public trough. His lack of sincerity and integrity are palpable in his statement that he pays the lowest tax rate of any of the employees in his office. If he believes government needs more money, why didn’t he voluntarily pay more taxes?

Walt D. August 16, 2011 at 12:06 pm

Even if Warren Buffet gave all his wealth to the Federal Government it would only be enough to run the government for 4 days!. The entire wealth of the the Forbes 400 would only last for about 6 months.
If Buffet’s companies were as lax at controlling expenses as the Federal Government, they would all go out of business in a very quickly. Successful businessmen, such as J. Paul Getty, Michael Bloomberg and Warren Buffett all have the reputation of being able to squeeze the penny until Abraham Lincoln whistles Dixie.

Mark U August 16, 2011 at 12:26 pm

He’s no dummy. Warren Buffett invests in companies; his prime competition are other “rich guys”. Since by all accounts Buffett has more money to begin with, taxing the income of his competitors reduces the means by which they compete with him. Buffett’s call for taxes is nothing more than the time honored tradition of getting the government to cripple one’s competition.

nate-m August 16, 2011 at 12:37 pm

What type of income tax hikes is he advocating?

There is a different tax rates for wages and benefits versus capital gains and dividends.

Big Big Big money guys like Bill Gates and Warren Buffet do not pay taxes on wages. Or at least if they do it’s a tiny amount compared to their overall income.

Long term capital gains tax is at 15% now. For the very rich like Warren this is his effective tax rate for the vast majority of his income, which is far less then a average percentage that a upper middle class wage-earner is required by the government to pay.

If Warren really was advocating raising his tax rate he would be advocating bumping long term capital gains tax up to 40 or 50%, at the very least. Back in the 1970′s the income tax rates for the highest earners was something like 70-90%

Has any of these massively rich people said that long term gains should be taxed at 70%?

I am not sure myself. I tend to ignore the the useless babble these sort of people produce. You can’t believe anything the man says as he understands how much power his word has and thus everything is just manipulation.

RTB August 16, 2011 at 9:32 pm

15% of his capital gains is a hell of a lot more than 100% of my income.

D. Wilkins August 16, 2011 at 4:42 pm

I think this hits the spike squarely on the head. It is probably pretty gratifying for Buffett to buy a railroad as one of his crowning achievements late in his career, placing him metaphorically, and quite literally, in an elite group of Robber Barons.

Ohhh Henry August 16, 2011 at 1:01 pm

“Tax Me More”.

What a crock. Show me your tax returns, Warren, where you haven’t structured your income to pay the lowest possible amount of personal income tax. Show me your daybook so I can see how when you travel to exotic locations, you DON’T always schedule a meeting or lecture so that the whole thing can be written off as a business expense. Please tell me that your company employees do not mow your lawn, get your laundry or cook your meals. I hope that your company hasn’t provided you with apartments or condos, with um, “office space” as justification. If you have children, tell me that you haven’t put billions of dollars into “trusts” so that you and they never have to pay the taxes which you claim that you want to pay.

Zack A August 16, 2011 at 1:18 pm

There is absolutely nothing preventing Warren Buffett from paying more in taxes. He simply chooses not to. Then he proceeds to complain that he is not being taxed enough, when he is fully capable of paying more in taxes if he chooses to?

Heck, the government won’t stop anyone from paying more in taxes than they owe, or stop anyone from not taking advantage of tax deductions and write offs they qualify for. But of course, people tend to only pay what they owe, and always take advantage of deductions if presented. Buffett included.

If he practiced what he preached, Buffett would pay more of his own money and taxes and set an example for his fellow billionaires to follow suit. But of course, like other statists, its only other people that have to be generous with their money.

RTB August 16, 2011 at 9:35 pm

Yeah, but what he really wants is for other people to pay more taxes, not just him.

Ned Netterville August 17, 2011 at 9:19 pm

Hear! Hear!

Jason Jiang August 16, 2011 at 2:01 pm

The income inequility in America is high for structual reasons. To correct this will take many years. In the short run, a redistribution of the wealth by the dumb government may still do the economy more good than leaving it like this.

Inquisitor August 16, 2011 at 2:52 pm

Seeing as it actively foments income inequality (particularly via central banking), its incentives for doing so are minimal.

Walt D. August 16, 2011 at 2:18 pm

Warren Buffet’s $40 billion would pay 1 million of the people who would lose their jobs, $400 a week unemployment for 2 years.

Michael A. Clem August 16, 2011 at 3:03 pm

Warren Buffet made a lot of money from investing (although he inherited a significant amount to start out with). So why does anybody think this guy is some kind of expert on taxation? He probably has a regiment of accountants who do his tax returns!

Jack Roberts August 16, 2011 at 4:27 pm

The US government spends Buffets net worth in under a minute.

OK maybe two days, he is one of the richest after all.

Walt D. August 16, 2011 at 9:10 pm
Walt D. August 16, 2011 at 9:12 pm
Juraj August 16, 2011 at 11:29 pm

Would he be paying higher taxes though? As Rothard pointed out, the very rich often support progressive taxation and such to stifle their competition.

Walt D. August 17, 2011 at 12:14 am

I think you are on the right track here. Warren Buffett has often written about how he selects companies with high barriers to entry – it is hard to create a new business that will compete with Gillette or Coca Cola. High taxes create the ultimate barrier to entry. Since most start up businesses fail in the first or second year, high taxes ensure that very few new businesses will succeed unless they are making a new product.
Warren Buffett also bought preferred stock in Goldman Sachs. Since it was rumored that he was approached by senior government officials to do so, with the full knowledge that the government would bail out Goldman Sachs, this was the ultimate trade based on non-public knowledge and “straight from the horses mouth” to boot.

George August 17, 2011 at 9:21 am

A couple of years ago Warren, the second richest man in the world, avoided paying taxes on his $35 billion by transferring it to the richest man in the world’s foundation.

Warren distributed his money the way he wanted to and didn’t pay taxes on it, why shouldn’t others have the same option?

It’s time for Warren to put up or shut up. If he isn’t going to pay tax on the $35 billion he isn’t credible telling anyone else to pay more taxes.

D. Wilkins August 19, 2011 at 11:24 am

If you look back at his letters to shareholders, you’ll find several places where he explains one of Berkshire’s “best kept secrets” for wealth accumulation, which is nothing more than a clever tax dodge: Look through earnings. The concept is deceptively simple; you buy stocks of companies that earn money at high returns on equity. This means that the company is plowing money back into the business rather than paying out dividends. Why was (is) that significant? Because dividends are usually taxed at much higher rates than capital gains. This is also one rationale behind why Berkshire never pays a dividend: The stockholder doesn’t have to pay the higher tax. Of course, high ROE companies are also very profitable and efficient; they’re well run, so that adds its own advantages. The point is, though, that the avoidance of income tax has always been part of Buffett’s overall strategy; his whole mantra about “buy-and-hold” is partly premised on the notion of avoiding capital gains taxes long enough for compound “interest” to work its magic. Buffett is, above all, a capitalist AND (necessarily) a pragmatist. Therefore, ideological arguments about taxation don’t enter into Buffett’s worldview.

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