Kass: Is This the End of Warren Buffett?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
baw703916
Posts: 6679
Joined: Sun Apr 01, 2007 1:10 pm
Location: Seattle

Post by baw703916 » Sun Mar 08, 2009 12:37 pm

I agree with Victoria's analysis above.

Another point is that I'm not sure if this analysis is based only on income tax. If you include payroll taxes (at the full rate of 15.3%) then the overall tax burden is much less progressive, for two reasons. One, many wealthy people receive a relatively small proportion of their income from salary (Manny Ramirez being obviously an exception). And, the social security portion of the payroll tax is capped.

So in Victoria's example. the "poor" people pay $1.50 each (15% of $10) and the "rich" person pays $9.30 (12% capped at $20 and 3% on the total income), if all his income is from salary. If half the rich person's income is from non-salary sources, he pays $5.85.

The 77 "poor" people pay $115.50 (assuming all their income is from salary). Adding this to the income taxes, the total tax (income and payroll) is 227.50. The rich person's total taxes are $88 +$5.85 = $93.85 (assuming half of income from salary).

Including payroll taxes, the rich person pays 29.2% of the total taxes (income + payroll), out of 23% of total income. That's a pretty flat total tax structure.

One can make similar arguments on sales taxes, and health insurance (the rationale for including this is that particularly in international comparisons, in most countries healthcare is paid for through taxes, and the U.S. is an exception).

Best wishes,
Brad
Last edited by baw703916 on Sun Mar 08, 2009 12:57 pm, edited 1 time in total.
Most of my posts assume no behavioral errors.

freedomfunds
Posts: 426
Joined: Thu Jan 15, 2009 4:17 am
Location: Los Angeles,CA

Post by freedomfunds » Sun Mar 08, 2009 12:54 pm

On top of Social Security's regressivity consider that LT cap gains, which is what most wealthy people derive their income from , is taxed lower than income.

THe LT CAP GAIN Tax should be 25 percent for incomes above 200k.

They should cut the Social Security tax from 15.3 to 12 percent and then remove the cap. That would give lower income a net tax cut while funding SS to be solvent.
Index choice matters. | | Valuations matter even more.

User avatar
bottlecap
Posts: 5762
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Post by bottlecap » Sun Mar 08, 2009 12:55 pm

kenner wrote:Bottlecap wrote:

"You are simply are making political arguments and making unsupported assumptions about cause and effect based on newspaper clippings. As a lawyer, you might understand it this way, you are arguing the validity of your assumption without laying the foundation for it."

The exhaustive study (a ton of statistics included) by Professor Domhoff (University of California) and the current online Newsweek column by Senior Editor Daniel Gross, a Harvard- and Cornell-educated scholar, hardly qualify as "newspaper clippings". I cited both of these earlier in this post.

If you are open-minded enough to read and understand them, then your posts may deserve consideration, for then you will comprehend the underlying foundation for tax policy reform.

P.S. As I recall the sworn Senate testimony of the CEOs whose companies are begging for taxpayer money, they all pretty much stated that their incentive to work hard was determined by their love of their work, not by the amount of their monetary compensation. Certainly, they would not prevaricate in testimony broadcast world-wide.
Once again, the facts you cite don't necessarily warrant the conclusions your draw.

"However, there does seem to have been a dramatic shift in wealth in America in recent times."

This is a fact you cite. I'll take your word for it that it is true. You don't say why this is the case or what you mean by wealth. Another place you mention income of the "average american worker". These are two different things and they could be caused by very different things. You don't seem to bother with the distinction but you draw conclusions anyway.

"Maybe that is fine, I just don't think it is healthy for the nation as a whole, especially from an investment standpoint as American corporations abandon pensions, slash health care insurance and so forth. The burden falls on the workers, who, unfortunately, are largely ill-prepared educationally and financially to master their long term finances."

This is a conclusion you draw. I don't know whether that's the conclusion of the authors you cite, but that is the typical conclusion of the newspapers you read. Where is your proof? Does everyone on this forum who responds really need to read these studies before responding to your post? Why should I read these studies if you can't explain, even briefly, why they support your conclusion?

I can cite a bunch of studies and say they mean something I believe, but I wouldn't say I was trying to "spark a discussion" and expect you to take my word for it. That's ridiculous.

As far as your "P.S." is concerned, you can't really believe that to be true on a large scale. Perhaps it's true for a few individuals, but most require incentive. Otherwise we'd all get paid the same. It will also be interesting to see what happens as the caps imposed by our government play out. My money says incentives matter.

sommerfeld
Posts: 1157
Joined: Fri Dec 12, 2008 8:02 pm

Re: Poor rich people...

Post by sommerfeld » Sun Mar 08, 2009 12:58 pm

VictoriaF wrote: For as long as 1% of the population earns 23% of income even an additional 10% tax on the rich (rising from 40% to 44% of the total) does not change the distribution of the after-tax wealth in any meaningful way.
real economies have too many interdependencies to make categorical statements like this.

changes in tax policy change behavior and you need to evaluate how those behavioral changes bounce around before concluding how much revenue a tax increase will produce; if you overreach you can end up making everyone miserable.

User avatar
baw703916
Posts: 6679
Joined: Sun Apr 01, 2007 1:10 pm
Location: Seattle

Re: Poor rich people...

Post by baw703916 » Sun Mar 08, 2009 1:02 pm

sommerfeld wrote: ...you can end up making everyone miserable.
I think that may have happened already. :roll:
Most of my posts assume no behavioral errors.

User avatar
bottlecap
Posts: 5762
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: Poor rich people...

Post by bottlecap » Sun Mar 08, 2009 1:19 pm

sommerfeld wrote: real economies have too many interdependencies to make categorical statements like this.
Precisely. The example also assumes that everyone's wages are from a paycheck - that is, it is guaranteed income. That's not how a substantial portion of income of the "rich" are derived. Salary is not where Buffett makes his money, although he's not quick to admit it when he speaks of tax policy.
baw703916 wrote:I think that may have happened already. Rolling Eyes
I hope you're kidding, but if you're not, just take a look at socialist and communist countries. Their "progressive" attitudes towards income has not saved them from this misery, either.

allsop
Posts: 1046
Joined: Sun Jun 15, 2008 7:08 am

Post by allsop » Sun Mar 08, 2009 1:45 pm

bottlecap wrote:
kenner wrote: That is exactly the point I was trying to make without saying so directly.

Frankly, I THOUGHT one the the bright naysayers might catch on to this point, but I guess it's forest for the trees for them.
I thought of responding, but I try not to respond to political drivel premised on manipulated statistics. It's really hard sometimes, however.

I've never lived in an economy where there were 78 people and only one of them made more than everyone else. That's the nice thing about this country.
The not so nice thing is that the huge increase in productivity the last 30 years have not resulted in higher real income for a large part of the US population.

Elizabeth Warren, who is the Leo Gottlieb Professor of Law at Harvard University, has published studies showing this. For instance, from The Middle Class on the Precipice:
Today the median income for a fully employed male is $41,670 per year (all numbers are inflation-adjusted to 2004 dollars)—nearly $800 less than his counterpart of a generation ago.
From the same article we have the following graph where the median single-income houshold had more discretionary income than the 'modern' two-income household:

Image

User avatar
wbond
Posts: 1073
Joined: Wed Dec 10, 2008 6:55 pm

Post by wbond » Sun Mar 08, 2009 2:00 pm

Kenner et. al.,

I am sensitive to your well-intentioned concerns about fairness and equity, and I share the concern. The problem with your sense of “fairness,” however, is its historical short-sightedness.

For much of the history of the world, the common man has lived in abject poverty, and in fear of the mailed fist and the boot on his throat. The greatest boon to humanity then has unquestionably been the advent of liberal democracy. Capitalism (private property, rule of law, interest-based banking system where debtors go to bankruptcy court and not prison) is an integral part of this, of course. (I state this fully aware of the two plus century history of critiques [from the right and left] of all things “bourgeois”). While the advantages to the common citizen are much more than material, since we are speaking of wealth it is important to point out that we have experienced roughly 2% per capita GDP growth per year for two centuries where none before existed! This is a bigger pie, not wealth redistributed from poor to rich.

The founding and self-evident truth here is, of course, equality (all men created…).

By logical extension private property is protected for all equally to protect the just retention of the fruits of one’s labor. This is not to say that we should not be taxed, nor that taxes should not be progressive (and one can quibble about the rates). However, to use tax policy to promote not just revenue for running government but also to change differences in wealth is problematic for two reasons: 1) it is economically inefficient and 2) it is unjust.

1. Economically inefficient. Governments can make one group poor quite efficiently. They have poor records at making large groups wealthy, however (see the twentieth century for uncontrolled large-scale experiments in this regard). So, to have less economic inequality, we can really only do so by making one group poorer, not another wealthier. This kind of punitive tax structure for the purpose of being punitive distorts incentives and likely leads to lower growth rates. The expected outcome would be lower per capita growth with more economic equality. This, in the end, is worse for the common man – at least in terms of absolute wealth. (I am aware of the “happiness” literature and do not find it compelling for a number of reasons, but this reply is too long, already).
2. Unjust. Many of the top 5% of income earners were not born into that tax bracket. We are a mobile society. Certainly there are some fortunes among the top .1% that carry forward for generations, but we cannot balance the federal budget on their backs alone (nor should we). “The rich” are potentially every one of us, then. And the principle of punitive taxation (again, not progressive taxation for revenue, but taxation for the sake solely of making the high-earners poorer) is a watered down version of the principle of slavery itself: “I work and you eat.”

Lastly, I agree with the concerns of the last post that real median incomes have been essentially stagnant for some decades. What is implied is that it has been a result, perhaps, of government tax policies, or could be fixed with government tax policies. I am not sure that this is self-evident. In our global economy, it seems that there is a greater reward given to educational levels achieved than was true in the post-war U.S. Increasing median income (a laudable goal, certainly) with “soak the rich” tax policies will likely be ineffective for the reasons given above.

All the best, wbond.

grumel
Posts: 1629
Joined: Fri Mar 30, 2007 1:38 am
Location: Germany

Post by grumel » Sun Mar 08, 2009 2:08 pm

Are you stating on the record that Warren Buffet has violated U.S. Tax Laws?
No, all i am saying is that he does not behave intentionally stupid to pay more taxes than he has to, which someone suggested he should do. He can donate with his private money later on, which is what he actually does. As a ceo of a public company such as Berkshire, Buffet has responsibility towards the other shareholders to be tax efficient and leave it to every individual shareholder if they feel like giving money to anyone. The only thing that makes sense is to suggest changes in tax policy that apply to everyone.

Considering how much power comes with money, it would even be dangerous for society if every politicaly centrist talented enterpreneur with potential to become very rich would give away his money early on and leave the power of money to radicals.

Buffet does not even lean towards the left side of the US political spectrum which is already very much shifted towards the right compared internationally. I dont get how someone like Buffet can steer up so much hate from the right side of the political spectrum for such some careful minimum shifts in tax policy as suggested by Buffet.

The entire common sense knowledge that social background, with all its constraints for the ones at the lower end is far more imporant than motivation to work hard at any point in life for future income seems entirly lost for some. Just to mention the most important constraint for "hard work achievment". Others like health, talent and luck are just as useless to justify a bottom to the top redistribution system.
Thats all Buffet asked for - stop a tax policy that favours higher earners over lower earners.
Last edited by grumel on Sun Mar 08, 2009 2:17 pm, edited 1 time in total.

kenner
Posts: 3129
Joined: Sat Mar 01, 2008 8:45 am

Post by kenner » Sun Mar 08, 2009 2:10 pm

Bottlecap,

Let me see if I can summarize a few of the things you seem to believe.

1. You believe that, in general, American employers are not decreasing the availability of guaranteed pensions for employees.

2. You believe that most employees, whose main retirement option is probably a 401k, has low-cost, well-diversified investment options readily available and that most employees (who are probably not Bogleheads) have the requisite knowledge to construct an adequate asset allocation and investment portfolio. (Perhaps this has been confirmed by your two years as a member of this forum and, hopefully, assisting "newbies" in understanding the investment and financial worlds).

3. You believe that American employers are not reducing funding for their employees (and their families) health care costs.

4. You believe that, for the most part, American employees are, or certainly will be, perfectly capable of making all the decisions necessary to ensure retirement with dignity for themselves and their families.

5. You believe that instead of you reading the literature I cited (I promise, it is relatively brief), that I should further synopsize it for you, even though everything you have written to date convinces me that you would disagree with whatever facts I cite. (Sorry, I've got a tee time to meet).

6. You believe that total monetary compensation for American top corporate management has not skyrocketed over the last 40 years, while the average American worker has seen little or no change in total compensation.

7. You believe I need to define the term "wealth" for you.

8. You have reached the definitive conclusion that my comments are false, even though you admit you have not sought to read the literature on which my opinions are based.

On a conciliatory note, I agree that, at certain levels, the Laffer curve has limited value.

User avatar
bottlecap
Posts: 5762
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Post by bottlecap » Sun Mar 08, 2009 2:33 pm

allsop wrote: The not so nice thing is that the huge increase in productivity the last 30 years have not resulted in higher real income for a large part of the US population.

Elizabeth Warren, who is the Leo Gottlieb Professor of Law at Harvard University, has published studies showing this. For instance, from The Middle Class on the Precipice:
Today the median income for a fully employed male is $41,670 per year (all numbers are inflation-adjusted to 2004 dollars)—nearly $800 less than his counterpart of a generation ago.
None of this justifies anything in tax policy. In fact, Prof. Warren mentions many probable causes for these results, but doesn't seem to think tax policy worth mention.

It is interesting to note the many things she does attribute it to, such as two earner families, housing, healthcare, childcare etc... I could make arguments that any of the increases in these expenses could be traced back to well-intentioned government policies, but that is beside the point. The point is that there are many different factors that combine to produce the results. Government tax policy has not been empirically shown to be the cause, but many people, including various posters here, jump to conclusions.

User avatar
bottlecap
Posts: 5762
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Post by bottlecap » Sun Mar 08, 2009 2:57 pm

Kenner:

Good luck on the course.

To address your points:

1,2,3 and 4: I never said any of this.

5: I'd gladly read the literature, but couldn't find it. I read Elizabeth Warren's paper, as I found it easily. I do think you need to explain your position, regardless of where it comes from. If your thoughts are only those of the authors, then just post a link and state "I agree with this."

6: This may be the case, but you have not stated why tax policy has caused this or how it would prevent it. This is the nut right here. Just because it's so does mean it's bad or there aren't legitimate reasons for it. Before we find a solution, we have to determine 1) whether there is a problem, 2) what the caused the problem and 3) whether a given "solution" has a chance of working. You don't address any of these questions. How can you be so sure of your solution?

7: Yes. I believe this is essential. Are you talking about wealth or income? You mention both, but don't even say which you use to draw your conclusion. Average income is affected by many things, including technological advances, outsourcing, immigration, skill level of workers, etc... A retired couple with $1.5 million in the bank live on a relatively small income, but have more wealth than most couples earning $250,000 of income per year.

8: I never said your comments were false. You just haven't explained them or addressed any of the issues in my response to #6. Until you have, what is there to discuss but politics?

Conciliatory note: This isn't much of a concession. The Laffer Curve is based on a simple supply and demand curve. If you admit the basic premise that supply and demand graphs suggest, you have to admit what the Laffer curve suggests. The question has always been, where are we on that curve. But to me, that's not the question here. It may be that we need to go one way or the other, but it doesn't mean that tax policy will proportionately affect income or wealth distribution.

My conciliatory note: I agree with you about judges and juries!

User avatar
bottlecap
Posts: 5762
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Post by bottlecap » Sun Mar 08, 2009 3:21 pm

Kenner:

One other thing. I still didn't find the specific study you mentioned, but I did find out about it's author and another piece he wrote:

http://www.thirdworldtraveler.com/Socie ... On%3F.html

An advocate of social conflict to bring about socialism? The game plan is to blame our woes on the "corporate conservatives" and the Republican party? You don't think the source might not be just a little biased?

Whether on the left or the right, I would submit such perverted "studies" aren't reliable. Where is your "highly developed sense of fairness and equity" when it comes to revealing the overwhelming bias of your sources?

User avatar
wbond
Posts: 1073
Joined: Wed Dec 10, 2008 6:55 pm

Post by wbond » Sun Mar 08, 2009 3:41 pm

bottlecap wrote:...the overwhelming bias of your sources?
From a UC Santa Cruz Sociology professor?

"I'm shocked, shocked to find that gambling is going on in here!"

allsop
Posts: 1046
Joined: Sun Jun 15, 2008 7:08 am

Post by allsop » Sun Mar 08, 2009 4:48 pm

bottlecap wrote:
allsop wrote: The not so nice thing is that the huge increase in productivity the last 30 years have not resulted in higher real income for a large part of the US population.

Elizabeth Warren, who is the Leo Gottlieb Professor of Law at Harvard University, has published studies showing this. For instance, from The Middle Class on the Precipice:
Today the median income for a fully employed male is $41,670 per year (all numbers are inflation-adjusted to 2004 dollars)—nearly $800 less than his counterpart of a generation ago.
None of this justifies anything in tax policy. In fact, Prof. Warren mentions many probable causes for these results, but doesn't seem to think tax policy worth mention.
She wrote in the article that by 2004 the tax of income takes 30% for a dual-income household compared to 24% for a single-income household a generation ago.

Research like this is very valuable to know when planning for retirement, and in particular if you are a median income earner: poor outlook for real increases in wages.

User avatar
bottlecap
Posts: 5762
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Post by bottlecap » Sun Mar 08, 2009 6:20 pm

allsop wrote: She wrote in the article that by 2004 the tax of income takes 30% for a dual-income household compared to 24% for a single-income household a generation ago.
She also wrote that the household is earning 75% more than the same household a generation ago. Under a progressive system of income tax, isn't is expected that such a significant increase in income would result in a higher tax rate?

Radiohead
Posts: 36
Joined: Wed Sep 17, 2008 9:01 pm

Post by Radiohead » Sun Mar 08, 2009 9:18 pm

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
"Trying is the first step towards failure" -Homer

hewhomustnotbenamed
Posts: 572
Joined: Sun Jan 04, 2009 11:27 pm

Post by hewhomustnotbenamed » Sun Mar 08, 2009 9:37 pm

kenner wrote:Lucky Dog,

Quite simply, I prefer a democracy with equitable laws that everyone abides by, not an oligarchy that the last four decades, accelerated by Bush's policies, had us headed for.

If you read the literature I cited earlier in this post, you'll have a good idea of the points I hope others will at least consider.

I was fortunate enough to join the "club" of top 1% of American income earners in 1989. I understand the power and influence that wealth and income inequality entails. I believe Warren Buffet understands it, too.

Best wishes,

Ken
Then please just pay your fair share and quit trying to(change the rules ex-post your success) making it harder on us not there yet.
your truly
Lord Voldemort
I might be crazy but, I ain't stupid.

hewhomustnotbenamed
Posts: 572
Joined: Sun Jan 04, 2009 11:27 pm

Post by hewhomustnotbenamed » Sun Mar 08, 2009 9:49 pm

kenner wrote:
P.S. As I recall the sworn Senate testimony of the CEOs whose companies are begging for taxpayer money, they all pretty much stated that their incentive to work hard was determined by their love of their work, not by the amount of their monetary compensation. Certainly, they would not prevaricate in testimony broadcast world-wide.
Of course they would because they are begging for billions of dollars and they know it's impossible for their internal state of mind to be proved to the contrary.
Sheesh one would expect a lieyer to know this.
Somehow I bet they are not so flippant in negotiating their next employment contract.
I might be crazy but, I ain't stupid.

kenner
Posts: 3129
Joined: Sat Mar 01, 2008 8:45 am

Post by kenner » Sun Mar 08, 2009 10:01 pm

hewho,

I see your sarcasm detector is deficient, as is your ability to spell.

hewhomustnotbenamed
Posts: 572
Joined: Sun Jan 04, 2009 11:27 pm

Post by hewhomustnotbenamed » Sun Mar 08, 2009 10:35 pm

kenner wrote:hewho,

I see your sarcasm detector is deficient, as is your ability to spell.
Dang you just went and broke my BS detector.

Your quote below is entirely consistent with the belief that marginal tax rates do not affect one's behavior. bottlecap , radiohead addressed this at length above. It may have been your intent to introduce sarcasm.
P.S. As I recall the sworn Senate testimony of the CEOs whose companies are begging for taxpayer money, they all pretty much stated that their incentive to work hard was determined by their love of their work, not by the amount of their monetary compensation. Certainly, they would not prevaricate in testimony broadcast world-wide.
But then I would have to believe you were preemptively attacking extensions of your own argument.
I might be crazy but, I ain't stupid.

kenner
Posts: 3129
Joined: Sat Mar 01, 2008 8:45 am

Post by kenner » Mon Mar 09, 2009 3:18 am

hewhomustnotbenamed wrote:
kenner wrote:Lucky Dog,

Quite simply, I prefer a democracy with equitable laws that everyone abides by, not an oligarchy that the last four decades, accelerated by Bush's policies, had us headed for.

If you read the literature I cited earlier in this post, you'll have a good idea of the points I hope others will at least consider.

I was fortunate enough to join the "club" of top 1% of American income earners in 1989. I understand the power and influence that wealth and income inequality entails. I believe Warren Buffet understands it, too.

Best wishes,

Ken
Then please just pay your fair share and quit trying to(change the rules ex-post your success) making it harder on us not there yet.
your truly
Lord Voldemort

Actually, I have been audited by the IRS. I am not a tax lawyer and I did not hire one to represent me. I just gave the IRS complete access to my entire financial records. Even my accountant was not involved in the audit process.

The IRS concluded that I overpaid my income tax bill and sent me a refund check.

Ken

User avatar
ElJay
Posts: 685
Joined: Tue Jun 12, 2007 6:08 pm

Post by ElJay » Mon Mar 09, 2009 7:33 am

Radiohead wrote:Tax them too much, attack them for being wealthy, and they just may not show up anymore.
Please wait while I get my tiny violin... :roll:

User avatar
wbond
Posts: 1073
Joined: Wed Dec 10, 2008 6:55 pm

Post by wbond » Mon Mar 09, 2009 7:52 am

kenner wrote:The IRS concluded that I overpaid my income tax bill and sent me a refund check.
I assume you did not accept it?

kenner
Posts: 3129
Joined: Sat Mar 01, 2008 8:45 am

Post by kenner » Mon Mar 09, 2009 8:48 am

Donated to charity.

Indexer88
Posts: 419
Joined: Mon Jan 05, 2009 5:32 pm

Post by Indexer88 » Mon Mar 09, 2009 9:36 am

Radiohead -- thanks for the post. Good laugh!! Good analogy!!

Radiohead
Posts: 36
Joined: Wed Sep 17, 2008 9:01 pm

Post by Radiohead » Mon Mar 09, 2009 10:32 am

Indexer88 wrote:Radiohead -- thanks for the post. Good laugh!! Good analogy!!
Thanks! I don't know where that originated from, but I read it elsewhere and thought it was appropriate for this thread.
"Trying is the first step towards failure" -Homer

Radiohead
Posts: 36
Joined: Wed Sep 17, 2008 9:01 pm

Post by Radiohead » Mon Mar 09, 2009 11:13 am

I really don't understand how FICA can be seen as anything but progressive. It is in no way regressive or even close to being flat. If Mrs Jones pays her 12.4% on her 90k salary all her life she will not get 3x as much out per year in retirement as Mr. Smith who was paying his 12.4% with a 30k/year job. So how is it regressive or flat again? The cap on pay out is why there is a cap on pay in. If you raise the cap on pay in without raising the cap on pay out it goes beyond being a progressive "insurance" policy to a straight up transfer of wealth (as mentioned before).

The whole concept of a progressive tax system itself really bothers me. Why should someone who makes more money be obligated to pay more proportionally? Yes, I understand exceptions for the truly poor to cover basic life expenses.

I currently pay about 10% of my gross salary in federal income tax. In 4-5 years it will jump to about 30% doing essentially the same job. Where is the fairness in that? Why will I owe society 3x as much proportionally (30X absolutely)? Really, I want to know why it is considered "fair" and why someone else deserves proportionally more of the money I worked hard for. If someone says "don't be selfish", I just want to say that there is nothing more selfish and greedy then feeling entitled to the fruit of someone else's labor.

Also, why do we always use the Buffetts of the world to decide tax policy? Billionaires or even multimillionaires are few and far between. Very few people (non-retired), live on primarily on LT capital gains. If you want to talk tax policy, use the lawyer or small business owner down the street who still has to go to work to make a living. They are being taxed the same those "evil" CEOs making 10-100x as much (not that I believe those "evil" uber rich should have to pay more proportionally).

It just amazes me that I see class envy/warfare on a forum dedicated to making (and keeping) money.
"Trying is the first step towards failure" -Homer

Gekko
Posts: 3779
Joined: Fri May 11, 2007 5:00 pm
Location: USA

Post by Gekko » Thu Apr 09, 2009 7:36 pm

Buffett Watch: Kass Buys Berkshire

04/09/09 - 09:25 AM EDT

Doug Kass

My day job is to deliver superior investment returns to my clients, and, in order to provide alpha, flexibility is a necessary reagent, so is a contrarian streak, logic of argument and strong financial dissection and analysis. When conditions change, as they appear to be doing now -- see this morning's Wells Fargo (WFC Quote) news -- opinions must change, and opportunities must be embraced. This is especially true in the case of Berkshire Hathaway as the considerations that led to my shorting of Berkshire Hathaway's shares at around $145,000 a share have now reversed, and, with the shares today trading under $90,000 a share, I have begun to accumulate a long position in Berkshire Hathaway.

http://www.thestreet.com/story/10484325 ... shire.html

User avatar
Index Fan
Posts: 2552
Joined: Wed Mar 07, 2007 12:13 pm
Location: The great Midwest

Post by Index Fan » Thu Apr 09, 2009 8:40 pm

Radiohead wrote: It just amazes me that I see class envy/warfare on a forum dedicated to making (and keeping) money.
There is no shortage of people out there that want to do things with your money. It's the governmental system we've voted for, and fighting over what to do with other people's money is now the norm. I've always thought that above a certain level the whole idea of voting to take more of other people's income is sordid, but hey, lots of people disagree with me.
"Optimum est pati quod emendare non possis." | -Seneca

pwesben
Posts: 42
Joined: Thu Oct 11, 2007 8:45 pm

Post by pwesben » Thu Apr 09, 2009 10:24 pm

Thank you Victoria, seconded. You will notice there will be no posts refuting your argument.

Bravo.

Paul
"They that can give up ESSENTIAL LIBERTY to obtain a little TEMPORARY SAFETY deserve neither LIBERTY nor SAFETY." | Ben Franklin Good foresight on torture, the Patriot Act, and NSA wiretapping

User avatar
LH
Posts: 5490
Joined: Wed Mar 14, 2007 2:54 am

Post by LH » Fri Apr 10, 2009 1:50 am

Lbill wrote:I think Buffett is a legend with a lot of integrity. Bogleheads ought to love his "stay the course" philosophy shouldn't they? He was out cheerleading for stocks back in November when the SPee was still over 900. He'll probably be proved right over time, but I'm glad I wasn't listening. My powder is still dry and I'm waiting for 600. 8)
Cool call, now how much percentagewise of your powder are your keeping dry(=cash right?) Or is this just joking around and not a real call? Just wondering : )

InsideTheBeltway
Posts: 15
Joined: Mon Jul 03, 2017 2:01 pm

Re:

Post by InsideTheBeltway » Wed Nov 22, 2017 6:07 pm

nisiprius wrote:
Thu Jan 29, 2009 12:53 pm
From $145,000 to $85,000 a share is a drop of 42%. (Thu Jan 29, 2009 1:53 pm)
Update from the Future:

BRK.A closed at 275,000 today, 11/22/2017

Donald Trump was elected POTUS over a year ago, the market is up about 25% since the election.

If anyone from 2009 can read this, buy NFLX stock.

BlackHat
Posts: 84
Joined: Tue Feb 14, 2017 1:47 pm

Re: Re:

Post by BlackHat » Wed Nov 22, 2017 8:34 pm

InsideTheBeltway wrote:
Wed Nov 22, 2017 6:07 pm
nisiprius wrote:
Thu Jan 29, 2009 12:53 pm
From $145,000 to $85,000 a share is a drop of 42%. (Thu Jan 29, 2009 1:53 pm)
Update from the Future:

BRK.A closed at 275,000 today, 11/22/2017

Donald Trump was elected POTUS over a year ago, the market is up about 25% since the election.

If anyone from 2009 can read this, buy NFLX stock.
No one could have foretold this lol
“Life is really simple, but we insist on making it complicated.” -- Confucius

patient_investor
Posts: 15
Joined: Sat Mar 18, 2017 12:15 pm

Re:

Post by patient_investor » Wed Nov 22, 2017 9:31 pm

Lbill wrote:
Thu Jan 29, 2009 6:49 pm
600 or 699 or below? I'm going on the record and saying the latter is more probable than the former
Pete
Did I say 600?? I meant 666 - at exactly 666 I'm all in. Buffett be damned. I never like his music anyway :roll:
What I noticed in this thread is that Lbill precisely predicted S&P500 bottom of 666. I am really curious if he did go all in... That would have been a tremendous luck!

crswvc
Posts: 51
Joined: Sat Oct 05, 2013 12:27 am

Re: Re:

Post by crswvc » Wed Nov 22, 2017 10:01 pm

InsideTheBeltway wrote:
Wed Nov 22, 2017 6:07 pm
nisiprius wrote:
Thu Jan 29, 2009 12:53 pm
From $145,000 to $85,000 a share is a drop of 42%. (Thu Jan 29, 2009 1:53 pm)
Update from the Future:

If anyone from 2009 can read this, buy NFLX stock.
IF you are reading this in 2009, dump NFLX and seek out bitcoin, yeah it crazy, :annoyed but it just might work :sharebeer :moneybag

User avatar
CyclingDuo
Posts: 1678
Joined: Fri Jan 06, 2017 9:07 am

Re: Re:

Post by CyclingDuo » Thu Nov 23, 2017 10:38 am

Curious if Doug Kass ever got bullish from the bottom in 2009 until today?

Curious to compare returns from Buffett with Kass (even though I suspect one rather cleanly trounced the other). Good example of an old thread of staying the course and avoiding the noise.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

TheAncientOne
Posts: 140
Joined: Wed Jul 19, 2017 8:53 pm

Re: Kass: Is This the End of Warren Buffett?

Post by TheAncientOne » Thu Nov 23, 2017 11:09 am

CyclingDuo, Kass actually called the bottom of the market when the S&P 500 hit the low at 666. How well he's done since then, who knows? For someone who loves to trade so frequently, I suspect he's missed out on much of the upswing since then. As Charlie Munger has pointed out, the best way to make money is to correctly pick just a few companies with long upward trends, and to then sit on your ass and do nothing with your position for years.

User avatar
BuyAndHoldOn
Posts: 188
Joined: Mon Mar 30, 2015 6:51 pm

Re: Kass: Is This the End of Warren Buffett?

Post by BuyAndHoldOn » Thu Nov 23, 2017 12:09 pm

I hear Doug Kass on the Bloomberg Surveillance podcast from time to time. He talks a bearish game and says that he has shorted Amazon (!) and other high fliers. If he is active with just a small portion of his investments, I suspect he has ridden the bull up like the rest of us.

I suspect he will be right about something at some point. Stock markets can be quite volatile, current period excepting. He makes a lot of good points when he explains his reasoning --> Nothing prescient, however.

Post Reply