The Buffet Tax Joke

Mr. Buffet is smart. He is smart enough to propose a new tax for “millionaires and billionaires” that he and many others likely will not have to pay. Buffet’s joke is on us, and President Obama is using this tax joke to garner votes through class warfare. Here’s why Buffet will not pay more taxes.

Mr. Buffet’s $46B wealth has been amassed through his company, Berkshire Hathaway, Inc. that has only paid out dividends once in its history. So, Mr. Buffet does not receive dividend income on which he would have to pay taxes. Investments are bought and sold through Berkshire Hathaway so Mr. Buffet pays no capitol gains taxes either. Berkshire Hathaway pays many of Buffet’s travel and other expenses. Since Buffet is known to live frugally, he likely can live on $1M or less per year. The Buffet joke is: “Income is NOT how the wealthy become wealthier.” They simply avoid taxes through business tax mechanisms.

A more appropriate proposal from Buffet and our President would be a tax that is imposed in many countries called a “wealth tax.” A wealth tax is paid by the wealthy based on their net worth. A tax of 1% on Mr. Buffet’s $46B wealth would be $460M per year — likely more than his secretary pays in taxes. I wonder why Mr. Buffet or President Obama didn’t think of this. I suspect Buffet chose to offer a diversionary tactic and President Obama does not want to make his wealthy donors angry. Ha, ha, ha, now isn’t that funny?

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Dr. Cleland’s Ph.D. is from Purdue University where he specialized in complex systems theory. His technical training and experiences includes analyses of many types of systems, involvement with numerous federal, state, and local agencies, and management of a broad set of set of professionals, services, and trades people. He has managed scientists, engineers, policemen, firefighters, environment, health, safety and emergency planning experts, building trades and maintenance crafts personnel, and others.

One Response to “The Buffet Tax Joke”

  • I’m not at all intereste in politics because in my opinion, after election all this things we voted for go down the drain. I am in the middle class category and I would really like to see some positive changes for the real, honest, hard working class who struggle to pay our bills because we live paycheck to paycheck. We pay way too many taxes and then come January, when I have to file taxes I have to pay more taxes and DEDUCT LESS. Many years ago, I remember being encouraged to buy a car or have a couple of credit cards, because at the end of the year, it was a taxe deduction (which helped middle class) Also, my husbnd carries our health insurnce policy for the entire family and wow, we have figured out that, if one is healthy, we don’t create an out-of-pocket expense and don’t have RX to purchase. However, we do spend over $4K in premiums which according to the tax guidelins, we can’t deduct in our taxes. Another thing, my husband also deposits 100% of his money to a FLEX card. Every year there are more limitations as to how we get to use our own money. If we can’t meet the health deduction, THEN, PLEASE LET US USE OUR OWN FLEX CARD TO OUR BENFT. Something has to change! WHO IS REALLY GOING TO HELP THE MIDDLE CLASS?” Thank you

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September 2012
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