• Knave Dave
    05/23/2016 - 18:16
    This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve...

Guest Post: Exploring The Not-So-Altruistic Aspects Of The "Buffett Rule"

Tyler Durden's picture




 

Submitted by Robert Ross of Casey Research

Exploring The Not-So-Altruistic Aspects Of The "Buffett Rule"

This week, President Obama released his $3.8-trillion budget for fiscal year 2013. The plan calls for new taxes on the wealthy, a restructuring of the tax code, and short-term infrastructure spending aimed at boosting the economy (albeit artificially).

Also included in the budget are limitations on subsidies for oil and gas companies, an end to the Bush tax cuts, and a proposal to raise taxes on dividends, which could be as high as 39.6% for households making over $250,000 per year.

Although Senate Minority Leader Mitch McConnell (R-KY) dismissed the proposal as "a campaign document," the White House claims the measure would generate $206 billion in revenue over 10 years.

One of the most interesting aspects of the plan is the inclusion of the Buffett Rule as a replacement for the alternative-minimum tax (AMT).

The AMT was originally implemented to ensure that high-income Americans paid their taxes. But, alas, the geniuses in Washington "forgot" to index the AMT for inflation, rendering it useless and unintentionally ensnaring an increasing number of middle-class taxpayers into a system meant for the wealthiest of Americans.

Unintended consequences abound, but I digress…

The "Buffett Rule," named after famed investor Warren Buffett, would require those who earn more than $1 million per year to pay a tax rate of at least 30% and prevent them from claiming deductions to push down their tax rates.

Buffett, who penned a New York Times op-ed in August of last year espousing the need for an overhaul of the tax code for America's top earners, appears to have caught the ear of President Obama.

(Click on image to enlarge)

The message of the op-ed was clear: Mr. Buffett, who paid nearly $7 million in income tax last year, wants to pay more.

But will he actually sacrifice anything? It's hard to say, as some of these new taxes will directly benefit Buffett.

Additional tax dollars in the government's coffers could help Buffett even more. Who can forget the Oracle of Omaha's opportunistic investment in Goldman Sachs (NYSE: GS) in the wake of the Lehman Brothers collapse (where he made nearly $1 billion on the assumption that the government would bail it out)? Buffett has indicated that his next acquisition could be Exelon (NYSE: EXC), General Dynamics Corp (NYSE: GD), or Archer Daniels Midland (NYSE: ADM), all of which are heavily connected to government contracts and would benefit from increased government spending.

Exelon is directly tied to the Obama administration: Rahm Emanuel and David Axelrod act as consultants, two top Exelon advisors are Obama fundraisers, and the company lobbies heavily for more greenhouse-gas restraints to drive demand for its nuclear power.

General Dynamics, the world's fifth-largest defense company, generated 72% of revenue from the Department of Defense in 2011, and was the number-four government contractor for fiscal year 2011.

Last but certainly not least, ADM, one of the world's largest processor of agricultural commodities, profits not only from ethanol subsidies but from corn syrup and export subsidies as well.

Although no one can be sure of Buffett's motives, it would be naïve to believe that someone as intelligent as Buffett has not considered the benefits of pushing through this tax structure. Higher taxes are always problems for entrepreneurs and regular people in the economy. However, they're often beneficial to the well-connected, who receive government bailouts and favors. And with Buffett even on the president's lips, he is becoming more connected to the power mechanism in D.C. every day. With many of Berkshire's companies, your loss as a taxpayer will be their gains.

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/17/2012 - 20:58 | 2171983 davood
davood's picture

It was not a coincidence that when they enacted the income tax laws in the US that laws for tax-free foundations were also enacted.  Foundations serve at least two basic functions: to allow the super-rich to bypass paying any taxes on their capital and assets, and to allow inter-generational tax-free transfer of wealth for the super-rich class.  The third function of major foundations is the unfettered ability to indirectly implement policies detrimental to the "little people" under the guise of helping them, through grants and such.

It is also not a coincidence that Bill Gates Sr., father of the former computer nerd and newly vaccine and GMO eugenicist, is at the forefront of trying to repeal the so-called "death tax." Both the income tax and the estate tax serve as an invisible glass wall for the aspiring nouveau riche, i.e., they prevent the new rich from climbing into the super-rich stratosphere which usually takes more than one generation to achieve.

So, why is Mr. Buffet being so generous wanting to pay more income taxes?  7 million in income taxes is peanuts to him, pocket change and only the "cost for doing business" for keeping the financial and political apartheid system going, not to mention keeping the financial Ponzi scheme afloat.

Sat, 02/18/2012 - 01:10 | 2172376 matrix2012
matrix2012's picture

 

The scheme of tax-free foundation already in effect  half a century ago...

 

"The best part of this book is how Allen goes through and exposes the ROCKEFELLERS' "FOUNDATION" SCAM whereby they funnel their own money through TAX EXEMPT FOUNDATIONS back to themselves through complicated investment schemes and tax loopholes that THEIR BUDDIES WROTE SPECIFICALLY FOR THEM IN CONGRESS.

Also, Allen documents the Rockefellers' main tool of control-- the COUNCIL ON FOREIGN RELATIONS (CFR)--and how they basically act as the invisible government in this country. It's absurd how many people belong to these Rockefeller founded and funded groups who are considered to be movers and shakers in our society; it's even scarier to think about what these groups are pushing ideologically.

Allen, in his somewhat sardonic writing style, also does a good job exposing the ENDGAME-- WORLD GOVERNMENT (NEW WORLD ORDER). He talks about the Rockefeller's weird connections to movements that should seemingly be anathema to everything they stand for, as well as their DELIBERATE DUMBING DOWN OF THE AMERICAN SCHOOLCHILD through their gigantic tax exempt education foundations."

 

The Rockefeller File (1976) - Gary Allen

 

Fri, 02/17/2012 - 21:08 | 2171998 Bunga Bunga
Bunga Bunga's picture

The chart above looks like the inverse debt/GDP.

Fri, 02/17/2012 - 21:09 | 2171999 Lucius Corneliu...
Lucius Cornelius Sulla's picture

You can't take it with you Warren. 

Fri, 02/17/2012 - 21:13 | 2172008 Quinvarius
Quinvarius's picture

Yes he can. And for the price of one baby, he will tell you how.

Fri, 02/17/2012 - 21:23 | 2172022 Conrad Murray
Conrad Murray's picture

So THAT'S why Becky Quicky was preggo. Uncle Moloch, you sneaky devil you.

Fri, 02/17/2012 - 21:38 | 2172049 nmewn
nmewn's picture

Buffet couldn't get it up with a crane...they probably stuck a needle in his sack if anything ;-)

Sat, 02/18/2012 - 12:28 | 2172881 MinnesotaMD
MinnesotaMD's picture

Unless you are properly embalmed and loaded into the Valley of the Kings. I would personally take more satisfaction doing a "Ted Williams" to him....

Fri, 02/17/2012 - 21:10 | 2172000 spastic_colon
spastic_colon's picture

Buffet is someone we all aspire to be...a tax evading blowhard

He sheltered 99% of his estate and can annuitize the income for the rest of eternity

Fri, 02/17/2012 - 21:11 | 2172004 Lucius Corneliu...
Lucius Cornelius Sulla's picture

A lot of good that will do him when he's 6 feet under.

Fri, 02/17/2012 - 22:53 | 2172186 palmereldritch
palmereldritch's picture

At that share price I suspect he's a front, an employee.  At the very least, not an existentialist.

Sat, 02/18/2012 - 07:44 | 2172626 The Alarmist
The Alarmist's picture

Buffet's grave will have a monument far better than the 99.99% ... there ought to be a law about taxing headstones and monuments or something to iron out that unfairness in death.

Fri, 02/17/2012 - 21:18 | 2172013 HD
HD's picture

You guys leave kindly old grandpa Buffet alone.  Life is short. Just let him play with his trains, eat cheeseburgers, drink coca-cola and get half-hearted blow jobs from Becky Quick. He's not hurting anybody.

 

 

 

Fri, 02/17/2012 - 21:21 | 2172018 New_Meat
New_Meat's picture

"And with Buffett even on the president's lips, ..."

You could have really spared us that vision.

- Ned

Sat, 02/18/2012 - 11:41 | 2172808 Monedas
Monedas's picture

The immaculate kiss !    Monedas  2012   "Clean and articulate"...Joseph Bite Me

Fri, 02/17/2012 - 21:38 | 2172050 John Law Lives
John Law Lives's picture

"Although no one can be sure of Buffett's motives, it would be naïve to believe that someone as intelligent as Buffett has not considered the benefits of pushing through this tax structure."

I am astounded that Buffett is such an outspoken advocate of an onerous Federal Estate Tax. I find it sickening that someone actually claims to believe any Federal Government is entitled to levy an onerous tax upon someone's wealth upon their death and, in effect, punish those who were intended to receive it.

Fri, 02/17/2012 - 21:52 | 2172074 nmewn
nmewn's picture

Susie Buffet is a "philanthropist". Howard Buffet is a "philanthropist", photographer, and farmer. Peter Buffet is a musician, composer, author and producer.

I tried and failed at philanthropy because I had insufficient funds...lol.

Likewise, my career as a well known musician, composer, author and producer floundered on the rocks of insolvency.

If only I had a rich "uncle" or father to make all my dreams come true ;-)

Contrary to Warrens public announcements, his kids will want for nothing but humility, just like his daddy.

Fri, 02/17/2012 - 23:31 | 2172260 John Law Lives
John Law Lives's picture

I'm not too concerned about his progeny.  The fact that he publicly supports the right of the Federal Government to levy such an onerous tax is galling.

Sat, 02/18/2012 - 09:03 | 2172687 nmewn
nmewn's picture

I'm right there with ya John...on both counts. I find the whole damned thing distasteful.

Here is a man who has the luxury of taking the bulk of his earnings...not through the "progressive income tax system" that was set up to fund government operations...but through investment income, taxed at a lower rate in order to avoid paying the higher rates the middle & lower classes are forced to pay.

He himself, by his own past & present actions, is saying I, Warren Buffet, don't trust the government to spend the taxes collected from me wisely or he wouldn't do it that way. He allows himself a salary (wages/income) of 100-175k a year?...and yet the problem is the franchised pizza shop owner or the gas station owner isn't paying in enough?

Really?

"Owning" a private jet and having free "access to" a private jet are two entirely different things. And I'm gonna go out on a limb and say pizza & gas station owners pay the full rate wherever they fly ;-)

Sat, 02/18/2012 - 07:48 | 2172633 The Alarmist
The Alarmist's picture

Read earlier comment ... Buffet's businesses make a ton on money because of the estate tax.

Sat, 02/18/2012 - 09:07 | 2172691 machineh
machineh's picture

Quite right -- insurance is a key element of estate planning.

Sometimes I feel envious about lacking the guile to promote a purely selfish agenda as an altruistic benefit for all.

But then I realize that such deviousness is the earmark of a sociopath.

Sat, 02/18/2012 - 10:21 | 2172742 John Law Lives
John Law Lives's picture

I noticed that comment. Aside from Buffett's profiteering schemes, I find the very notion of a Federal Estate Tax in and of itself to be galling. Ron Paul believes in repealing the Federal Estate Tax completely.

Sat, 02/18/2012 - 12:50 | 2172914 jekyll island
jekyll island's picture

You can avoid it now if you set up an irrevocable trust.  It just takes money and lawyers, that's all.  Breakeven point is when you have assests over $1 million, that's where the insurance part comes in to play usually.  Lawyer's gonna charge you about $2,000 to set up a trust, plus maintenance charges as laws change.  

Sat, 02/18/2012 - 16:18 | 2173462 John Law Lives
John Law Lives's picture

Thanks for the note. I do not personally have an estate that will be subject to estate tax. That is not my issue. My issue is that I think the estate tax is immoral, and I applaud honest men like Ron Paul who want to abolish it. Until that happens (if ever), I agree 100% that it is important to know how best to plan for it.

Fri, 02/17/2012 - 21:44 | 2172055 Downtoolong
Downtoolong's picture

Buffett's has probably already worked up a tax avoidance scheme to get around  his own  rule. If it passes, he's then going to make another fortune marketing that to estate planners for the wealthy. 

Fri, 02/17/2012 - 21:49 | 2172056 non_anon
non_anon's picture

let us all feast on the Buffet, where shall it be?

Fri, 02/17/2012 - 21:47 | 2172063 navy62802
navy62802's picture

That WWII tax rate always amazes me ... above 90% for a few years there. It's truly shocking to look at.

Fri, 02/17/2012 - 21:51 | 2172069 fonzannoon
fonzannoon's picture

nobody paid them.

Fri, 02/17/2012 - 22:31 | 2172152 chunkylover42
chunkylover42's picture

the tax code was loaded with deductions back then, so effective rates were much lower

Fri, 02/17/2012 - 21:59 | 2172087 loveyajimbo
loveyajimbo's picture

Buffet is as crooked as Blankfein and Dimon, he just rubs some manure in his hair and says "aw shuckins" alot.  Lloyd naturally smells like shit and says "Oy Vey" alot... doesn't seem to work as well...

Fri, 02/17/2012 - 22:05 | 2172092 Xkwisetly Paneful
Xkwisetly Paneful's picture

I love when the ultra wealthy blatantly use the poor and middle class as $2whores to advance their agendas. There is no better way to keep the common man down than inflation/taxation and declining wages.

 Love the chart showing rates nobody paid or pays.

Also, adore how pretty much all forms of local, county and state taxation are at record peaks.

Fri, 02/17/2012 - 22:14 | 2172111 linrom
linrom's picture

I love the logic of this 'puff piece'. "If it rains in Denver, it must snow in Miami." Who can forget Casey Research's another brilliant analysis of post Soviet Russia. The report summed up Russia as a land mass populated by drunks and slavish Slavs. In contrast the report presented ex-Soviet Muslim republics as industrious with Muslim men sipping coffee and reading books in order to educate themselves.

On one hand ZH lambastes the government for issuing  phony economic data; but on the other, it itself presents phony articles written almost exclusively by money mangers that distort economic reality and facts.

Fri, 02/17/2012 - 22:28 | 2172149 palmereldritch
palmereldritch's picture

It's an All You Can Cheat Buffet!

Fri, 02/17/2012 - 22:59 | 2172196 TradingJoe
TradingJoe's picture

Yeah, that old fart Warren, give me a break, gees!!!

Fri, 02/17/2012 - 23:59 | 2172304 Benjamin Simon
Benjamin Simon's picture

Buffets philosophy  "pull the ladder up behind me"!

Sat, 02/18/2012 - 05:11 | 2172553 Dorky
Dorky's picture

When we finally get to be as rich as Warren Buffett, we will all be just like him.

Human race is inherently selfish.

Sat, 02/18/2012 - 05:44 | 2172555 Coldfire
Coldfire's picture

Whorin' Warren, the folksy face of fascism.

Sat, 02/18/2012 - 07:23 | 2172614 machineh
machineh's picture

'Biz-gov partnership,' biTchEz!

But you need a billion to get a seat at the conference table ... :-(

Sat, 02/18/2012 - 06:23 | 2172582 Wakanda
Wakanda's picture

I thought the "Buffet Rule" is "Don't double dip your shrimp in the cocktail sauce".

Good thing I read ZH to keep up on the current trends of psychopathic behavior and proper ponzi etiquette.

Sat, 02/18/2012 - 07:26 | 2172597 NuYawkFrankie
NuYawkFrankie's picture

The Venerable Warren - patron saint of Corporate Welfare Queens - shouts his virtue from the rooftops giving back chump-change (Buffet-Rule my ass - LOL!), whilst robbing the taxpayer blind (via the Goldman, AIG... bailouts et al). - and all the while putting on this shuffling, "aw schucks - I just wanna help out..." show for for the dupes.

No doubt about it: the sheer bare-faced effrontery &  self-promoting, in-your-face hypocrisy of this old toad boggles the mind - but you gotta give credit where it's due:

For someone who's sucked so much outta the taxpayers tit that his lips are permanently puckered, he's the best conman out there - bar none!

Sat, 02/18/2012 - 08:24 | 2172653 Davalicious
Davalicious's picture

Buffet's cock is on the president's lips.

Sat, 02/18/2012 - 09:24 | 2172700 Sudden Debt
Sudden Debt's picture

Obama's dividend tax will kill the stockmarket.
Dividends are already so low and now he wants half of that income?

Sat, 02/18/2012 - 12:53 | 2172921 JuicedGamma
JuicedGamma's picture

Actually he wants to destroy the capitalist system by taxing it to death.  United States of Europe here we come.

Sat, 02/18/2012 - 16:52 | 2173533 blunderdog
blunderdog's picture

Where's this "capitalist system" you're talking about?  Can you point to an example?

Sat, 02/18/2012 - 10:45 | 2172761 Stuck on Zero
Stuck on Zero's picture

When Obama rejected the Keystone XL pipeline it harmed the environment, destroyed tens of thousands of jobs, will ensure that Canada's oil goes to China, and is driving the U.S. to greater dependency on MidEast oil.  But, it means billions in Buffet's pockets because the oil from Canada and the Bakken will have to be transhipped by Buffet's railroads.  How cozy. 

Sat, 02/18/2012 - 11:18 | 2172782 Monedas
Monedas's picture

Altruism is spending OPM (other people's money) to buy SNAP cards for Ghetto Geeks !  Compassion is sending them to North Korea for extreme potty training !  Monedas  2012  I´d like to see the CNN cameras on Warren Buffet taking a bicycle/water buffalo tour of North Korea !

Sat, 02/18/2012 - 11:17 | 2172787 Monedas
Monedas's picture

Socialism =  Command Control Economy...............Capitalism = Demand Control Economy...................Libertarianism =  Common Man Control Economy.................Obamaism = God Damned Control Economy       Monedas  2012   Command Performance For Pompous Socialists

Sat, 02/18/2012 - 11:30 | 2172797 Alex Kintner
Alex Kintner's picture

    Leave Warren ALONE!!!!!!!!!!!!!!!!!!!!
http://www.youtube.com/watch?v=kHmvkRoEowc
   
    How fucking dare anyone out there make fun of Warren after all he has been through.!

    He lost his aunt, he went through a divorce. he had two fuckin kids.

    His wife turned out to be a user, a cheater, and now he's going through a custody battle. All you people care about is….. readers and making money off of him.

    HE’S A HUMAN! (ah! ooh!) What you don’t realize is that Warren is making you all this money and all you do is write a bunch of crap about him.

    He hasn’t performed on stage in years. his song is called “Give me more money” for a reason because all you people want is MORE! MORE-MORE, MORE: MORE!.

    LEAVE HIM ALONE! You are lucky he even performed for you BASTARDS!
    LEAVE WARREN ALONE!…..Please.

    Perez Hilton talked about professionalism and said if Warren was a professional he would’ve pulled it off no matter what.

    Speaking of professionalism, when is it professional to publicly bash someone who is going through a hard time.

    Leave Warren Alone Please…. !
    Leave Warren Buffet alone!…right now!….I mean it.!

    Anyone that has a problem with him you deal with me, because he is not well right now.

    LEAVE HIM ALONE!

Do NOT follow this link or you will be banned from the site!