The Buffet Rule is a waste of time - Page 10 - Politics and Economics

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The Buffet Rule is a waste of time

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04-13-2012 , 05:46 PM

#226

NewOldGuy

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Quote:

Originally Posted by Aytumious

What is his overall percentage of income to taxes paid? That is all that is relevant.

2011, earned 20.9 million paid 3.2 million federal income tax. 15.3%

For comparison, close to 70% of households had a lower effective rate than this.

04-13-2012 , 06:04 PM

#227

suzzer99

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Great, so $20.9M is something like the top one-thousandth of 1 percent (closest info I could find is $5M = 1/100 of 1 percent) and he pays an effective tax rate less than 30% of us, including me. Awesome and totally fair. Raise my payroll taxes some more please. Mitt needs another house.

04-13-2012 , 06:13 PM

#228

seattlelou

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Quote:

Originally Posted by suzzer99

If you accept the argument that capital gains taxes are counterproductive it seems that we should be able to live with the rich paying a smaller percent of taxes.

04-13-2012 , 06:25 PM

#229

suzzer99

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I don't accept the argument that Mitt Romney's income from capital gains is more likely to be re-invested than if he paid himself a salary. I think low capital gains (and even lower that's being proposed) are a huge incentive to structure your salary as capital gains. That's why I support some kind of minimum effective rate on combined income.

04-13-2012 , 07:02 PM

#230

seattlelou

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Quote:

Originally Posted by suzzer99

I haven't seen any of Romney's tax returns from his time at Bain. Have they been provided? Good corporate governance tries to align CEO pay with stock performance I would have to see more specifics of his pay before having an opinion. I was speaking to his latest returns where his rates were low due to most of his income being capital gains and having no job.

04-13-2012 , 07:34 PM

#231

NewOldGuy

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Quote:

Originally Posted by suzzer99

I think low capital gains (and even lower that's being proposed) are a huge incentive to structure your salary as capital gains.

It isn't possible to do this. Even if you shift the asset ownership to a corporation, they pay the capital gains. Then pay yourself a salary out of that and you paid MORE tax. The capital gains tax is very simple, sell something, pay tax on the difference from what you bought it for. You can't avoid it except by not selling assets. And there isn't any way to make it look like salary.

04-13-2012 , 07:38 PM

#232

Riverman

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You can defer it indefinitely by borrowing against appreciated assets, often in otherwise tax advantaged ways like home equity loans.

04-13-2012 , 07:58 PM

#233

seattlelou

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Quote:

Originally Posted by Riverman

You can defer it indefinitely by borrowing against appreciated assets, often in otherwise tax advantaged ways like home equity loans.

I had friends in the late 90's that thought it was smart to borrow against there stock option windfall as opposed to selling to avoid capital gains taxes. An excellent way to lose your ass. It really did suck for them figuring they were going to work for a couple more years until completely vested and retire at 30 then realizing that they had long careers ahead of them. Easy come easy go was def not true in these cases.

04-13-2012 , 08:01 PM

#234

Riverman

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Sure. But they could have used options to hedge.

04-13-2012 , 08:15 PM

#235

seattlelou

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Quote:

Originally Posted by Riverman

Sure. But they could have used options to hedge.

Oh yeah, the irrational exuberance Greenspan mentioned was alive and well. I don't recall the pricing but volatility was so high at that time if you didn't go naked you pretty much ate up the tax advantage. Honestly not sure I sold my options never look a gift horse in the mouth.

Edit: I was waay to late to the party to make the serious cash.

Last edited by seattlelou; 04-13-2012 at 08:44 PM.

04-14-2012 , 04:38 AM

#236

AlexM

ignored

Join Date: Dec 2003 Posts: 20,655

Quote:

Originally Posted by ctyri

LOL. Yeah, that was the primary reason the US grew rapidly as a world economy in the 1800s--it was all about income tax!

I always love these radical & insane interpretations of my posts.

04-14-2012 , 06:18 AM

#237

mrbaseball

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Grunching this, but this whole "secretary" thing is ridiculous. Who here doesn't think Buffetts secretary is in the top tax bracket? His secretary isn't some typical 9-5 office worker the word "secretary" implies. He/she is the personal secretary of a billionare money manager and likely makes mid/high 6 figures. Buffett is on record for a 100K salary so the secretary makes more than that.

If you disincetivize investment/dividend returns via taxation growth will slow pure and simple.

04-14-2012 , 10:36 AM

#238

Copernicus

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Join Date: Jun 2003 Posts: 9,155

Quote:

Originally Posted by mrbaseball

Apparently its too simple for a group that studies game theory and has to apply 3rd level thinking to a 1st level issue. . Based on the claims of her tax rate and IRS averages she's probably above 200k AGI.

04-14-2012 , 11:46 AM

#239

bobman0330

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Quote:

Originally Posted by Riverman

Sure. But they could have used options to hedge.

This doesn't actually work though.

04-14-2012 , 12:37 PM

#240

Copernicus

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Quote:

Originally Posted by bobman0330

This doesn't actually work though.

Yes, though capital gains tax on employee stock options can be deferred by having the employer reconvert them to deferred compensation. Im not sure what the tax consequences to the employer are though.

04-14-2012 , 01:56 PM

#241

Effen

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Quote:

Originally Posted by Copernicus

Apparently google is too hard to use because the first page results are all WSJ and NRO opinion pieces that she mist make 200k plus bc of blahblididdyblah.

Or you could look for an actual quote from Buffet where he says outright he was paying her 60k in 2008.

What level is getting source material and not opinion pieces who are paid to make democrats look bad er ah "commentators" on?

04-14-2012 , 02:22 PM

#242

Copernicus

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Quote:

Originally Posted by Effen

What level is looking at the taxes someone with 60k of income and taking standard deductions pays and knowing that either

1) Buffet is wrong
2) Buffet is lying
3) The joint return has total income in excess of 200k and the comparison is meaningless.

Cliff notes for the tax disabled: 60k in income taking standard deductions pays less than 10% of gross income so Buffet is FoS about something.

04-14-2012 , 02:45 PM

#243

Effen

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so either buffet is incompetent, or too stupid to realize his statement could be easily fact checked as well as Obama as well as his entire political team for making an issue about it, or you don't have enough information

im going with #3

edit: also, him paying her 60k would fit the narrative he's lived so far, that he lives in his house from 1955 or whatever and doesn't spend extravagantly on basically anything. small town sensibilities imo

Last edited by Effen; 04-14-2012 at 02:52 PM.

04-14-2012 , 03:31 PM

#244

suzzer99

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Copernicus doin work

04-14-2012 , 04:30 PM

#245

bobman0330

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Quote:

Originally Posted by Effen

The numbers Buffett uses in his editorial include both sides of the payroll tax. That adds 15% to the average income tax rate for anyone who makes less than $100k.

04-14-2012 , 05:23 PM

#246

Copernicus

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Quote:

Originally Posted by bobman0330

The numbers Buffett uses in his editorial include both sides of the payroll tax. That adds 15% to the average income tax rate for anyone who makes less than $100k.

Which is BS, of course, since payroll taxes are returned to the taxpayer via benefits. The net of taxes less benefits is progressive, so it cant possibly make his comparison look any better. And of course the "Buffet tax" isnt offset by ANY payroll taxes.

04-14-2012 , 05:26 PM

#247

suzzer99

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04-14-2012 , 05:52 PM

#248

Effen

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Quote:

Originally Posted by bobman0330

The numbers Buffett uses in his editorial include both sides of the payroll tax. That adds 15% to the average income tax rate for anyone who makes less than $100k.

Unless she's the secretary for herself at SecretaryInIowaLLC she's not paying both ends of the payroll tax. I mean she is in effect compensation wise in a hidden way but nobody addresses that reality when talking about taxes.

I'd be surprised if he tried to slip that in, seems a little Machiavellian for someone writing an editorial with no immediate reward.

04-14-2012 , 05:54 PM

#249

Effen

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Quote:

Originally Posted by Copernicus

Which is BS, of course, since payroll taxes are returned to the taxpayer via benefits.

Uh, all taxes are returned to the taxpayer via benefits, it's just a matter of how direct or indirect they are. The money doesn't go into an incinerator Weimar republic style.

04-14-2012 , 06:09 PM

#250

Low Key

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no no, let's have this discussion about who gets what benefits

I, for one, never use the courts, and would like none of my money from taxes going to it, damn freeloading judges in their ivory towers!

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