Warren Buffet speaks out

[CADsortaGUY]

Originally posted by: sandorski

Originally posted by: CADkindaGUY

Originally posted by: sandorski

Originally posted by: CADkindaGUY

Originally posted by: sandorski
No. Simple Economics: Spending + Interest(Deficit/Debt) > Cost

Doesn't have to equal increased taxes. Simple math. Figure it out I've already provided the answer.

CkG

It will.

Not if we actually FIX things

CkG

If.

Exactly what I am working and pushing for. Some people think increasing taxes is the answer and say that it is all deferred tax INCREASES - but that isn't entirely true. It's a nice little chant and all but the problem still exists after their chanting fades. The solution is to force the Feds to spend less and give them less control of many things. A gov't governing 290Million people does not need 2.4TRILLION per year to run. It does not and should not need that much $ just to operate.

CkG

 

[CADsortaGUY]

Originally posted by: thevigmaster

Originally posted by: CADkindaGUY
Info on companies owned by Buffet's Hathaway.

I pay my electric/heating bills to this man, bought some of his funiture, walk on his carpet, wear his underwear, and sometimes eat at his dairy treat places.

Seems like this guy is always in my wallet...it's no wonder dave likes this guy

CkG

so you like him so much you bought his underwear, huh?

Fruit of the Loom? I know I have a few pair around here somewhere.

CkG

 

[Red Dawn]

Originally posted by: CADkindaGUY

Originally posted by: thevigmaster

Originally posted by: CADkindaGUY
Info on companies owned by Buffet's Hathaway.

I pay my electric/heating bills to this man, bought some of his funiture, walk on his carpet, wear his underwear, and sometimes eat at his dairy treat places.

Seems like this guy is always in my wallet...it's no wonder dave likes this guy

CkG

so you like him so much you bought his underwear, huh?

Fruit of the Loom? I know I have a few pair around here somewhere.

CkG

Been going Commando for so long that you don't know where your underwear is Cad?

 

[CADsortaGUY]

Originally posted by: Red Dawn

Originally posted by: CADkindaGUY

Originally posted by: thevigmaster

Originally posted by: CADkindaGUY
Info on companies owned by Buffet's Hathaway.

I pay my electric/heating bills to this man, bought some of his funiture, walk on his carpet, wear his underwear, and sometimes eat at his dairy treat places.

Seems like this guy is always in my wallet...it's no wonder dave likes this guy

CkG

so you like him so much you bought his underwear, huh?

Fruit of the Loom? I know I have a few pair around here somewhere.

CkG

Been going Commando for so long that you don't know where your underwear is Cad?

No - boxers. I don't think I have too many breifs around, but I know I have some FotLs around here somewhere but definately not here in my computer dungeon

CkG

 

[burnedout]

**Breaking News**

More from Buffet on taxes:

Taxes

In 1961, President Kennedy said that we should ask not what our
country can do for us, but rather ask what we can do for our country. Last
year we decided to give his suggestion a try - and who says it never hurts
to ask? We were told to mail $860 million in income taxes to the U.S.
Treasury.

Here's a little perspective on that figure: If an equal amount had
been paid by only 2,000 other taxpayers, the government would have had a
balanced budget in 1996 without needing a dime of taxes - income or Social
Security or what have you - from any other American. Berkshire
shareholders can truly say, "I gave at the office."

Charlie and I believe that large tax payments by Berkshire are
entirely fitting. The contribution we thus make to society's well-being is
at most only proportional to its contribution to ours. Berkshire prospers
in America as it would nowhere else.

Warren E. Buffet, Feb 28, 1997

**Film at Eleven**

 

[Jmman]

Originally posted by: BaliBabyDoc

Taxes should at least cover the cost of government. Simply put, the current "Tax Cuts" are deferred Tax Increases. They are not "Tax Cuts" at all.

What a rarity on this board . . . a clear, concise and accurate assessment. If Bush is re-elected, it is highly unlikely we will do anything substantive about the unfunded liability in SS/Medicare and it is unlikely we will do much about the ridiculous excess in DOD spending. IMHO, Kerry will be better but I doubt there's much political will in either political party to "fix" the mess that Bush created.

Our only hope is a societal dialogue about shared sacrifice for the sake of a just and sustainable future. No less than four generations of Americans will HAVE TO live below our means in order to prevent future generations from living WELL below their means.

I always laugh when I see the doom and gloomers talk about national debt. A few interesting facts:


One, we have had a deficit since the early 1800's and the US arguably has the worlds most dynamic economy ever. Having a national debt is not hurting us too much, now is it?

In 2000 Japan, Italy, Canada, France, and Germany had higher national debt to GDP ratios than we did.

And anyway, most of the debt is internally held so that means that the debt payments will be going to US citizens which in turn means that money will still reside in the US economy. Net damage to US purchasing power, nothing.....

 

[burnedout]

Originally posted by: dmcowen674

Originally posted by: sMiLeYz
the oracle of omaha himself

Beautiful, the guy says it like it is, the New American Caste System:

"Tax breaks for corporations (and their investors, particularly large ones) were a major part of the Administration's 2002 and 2003 initiatives," he wrote. "If class warfare is being waged in America, my class is clearly winning".

Buffet and Munger also alluded to federal corporate benevolence in '98 while *GASP* Clinton *GASP* was President.

One beneficiary of our increased size has been the U.S. Treasury. The federal income taxes that Berkshire and General Re have paid, or will soon pay, in respect to 1998 earnings total $2.7 billion. That means we shouldered all of the U.S. Government's expenses for more than a half-day.

Follow that thought a little further: If only 625 other U.S. taxpayers had paid the Treasury as much as we and General Re did last year, no one else -- neither corporations nor 270 million citizens -- would have had to pay federal income taxes or any other kind of federal tax (for example, social security or estate taxes). Our shareholders can truly say that they "gave at the office."

Writing checks to the IRS that include strings of zeros does not bother Charlie or me. Berkshire as a corporation, and we as individuals, have prospered in America as we would have in no other country. Indeed, if we lived in some other part of the world and completely escaped taxes, I'm sure we would be worse off financially (and in many other ways as well). Overall, we feel extraordinarily lucky to have been dealt a hand in life that enables us to write large checks to the government rather than one requiring the government to regularly write checks to us -- say, because we are disabled or unemployed.

Warren E. Buffet, Chairman of the Board, March 1, 1999.

Additionally, please see my earlier post regarding Mr. Buffets comments refering to corporate tax in a 1996 letter to shareholders.

[You may now resume your regularly scheduled corporate taxation bashing already in progress]

 

[Bowfinger]

Originally posted by: burnedout

Originally posted by: dmcowen674

Originally posted by: sMiLeYz
the oracle of omaha himself

Beautiful, the guy says it like it is, the New American Caste System:

"Tax breaks for corporations (and their investors, particularly large ones) were a major part of the Administration's 2002 and 2003 initiatives," he wrote. "If class warfare is being waged in America, my class is clearly winning".

Buffet and Munger also alluded to federal corporate benevolence in '98 while *GASP* Clinton *GASP* was President.

One beneficiary of our increased size has been the U.S. Treasury. The federal income taxes that Berkshire and General Re have paid, or will soon pay, in respect to 1998 earnings total $2.7 billion. That means we shouldered all of the U.S. Government's expenses for more than a half-day.

Follow that thought a little further: If only 625 other U.S. taxpayers had paid the Treasury as much as we and General Re did last year, no one else -- neither corporations nor 270 million citizens -- would have had to pay federal income taxes or any other kind of federal tax (for example, social security or estate taxes). Our shareholders can truly say that they "gave at the office."

Writing checks to the IRS that include strings of zeros does not bother Charlie or me. Berkshire as a corporation, and we as individuals, have prospered in America as we would have in no other country. Indeed, if we lived in some other part of the world and completely escaped taxes, I'm sure we would be worse off financially (and in many other ways as well). Overall, we feel extraordinarily lucky to have been dealt a hand in life that enables us to write large checks to the government rather than one requiring the government to regularly write checks to us -- say, because we are disabled or unemployed.

Warren E. Buffet, Chairman of the Board, March 1, 1999.

Additionally, please see my earlier post regarding Mr. Buffets comments refering to corporate tax in a 1996 letter to shareholders.

[You may now resume your regularly scheduled corporate taxation bashing already in progress]

Cool. Buffet says the same thing I do about taxes, the thing that causes all the "taxes are evil, sky is falling" crybabies to change the subject. It is better to pay a lot of taxes on the huge incomes we can earn in the U.S. than to pay low taxes on the pittance we would earn elsewhere. It's nice to see that some wealthy people recognize and are grateful for the success they enjoy thanks to the unique opportunities available due to our extraordinary physical and financial infrastructure.

 

[charrison]

from the posted artciles

Nevertheless, Berkshire's own tax bill has risen dramatically. In 2002, Buffett noted, the company paid $1.75 billion in federal taxes. This year, it expects to pay $3.3 billion, a sum Buffett estimates to equal 2.5 percent of total taxes to be paid by all U.S. corporations.

Some tax cut

 

[Bowfinger]

Originally posted by: charrison
from the posted artciles

Nevertheless, Berkshire's own tax bill has risen dramatically. In 2002, Buffett noted, the company paid $1.75 billion in federal taxes. This year, it expects to pay $3.3 billion, a sum Buffett estimates to equal 2.5 percent of total taxes to be paid by all U.S. corporations.

Some tax cut

It's interesting to me they pay so much in taxes when so many other companies pay so little, at least according to the countless anecdotes reported. I wonder if this is because Buffet has too much integrity to pay the tax shelter games, perhaps because of his belief that taxes are accpetable, or whether it is simply due to a lack of shelter options for a company like his.

 

[charrison]

Originally posted by: Bowfinger

Originally posted by: charrison
from the posted artciles

Nevertheless, Berkshire's own tax bill has risen dramatically. In 2002, Buffett noted, the company paid $1.75 billion in federal taxes. This year, it expects to pay $3.3 billion, a sum Buffett estimates to equal 2.5 percent of total taxes to be paid by all U.S. corporations.

Some tax cut

It's interesting to me they pay so much in taxes when so many other companies pay so little, at least according to the countless anecdotes reported. I wonder if this is because Buffet has too much integrity to pay the tax shelter games, perhaps because of his belief that taxes are accpetable, or whether it is simply due to a lack of shelter options for a company like his.

He may, he may not. The divident tax may have got him, because he does not think companies should pay dividend. Many companies started paying divedend when the taxes on them were lowered. Either way it appears he is paying more under the current law. I am not sure what his complaint is, as he is always welcome to pay more.


ALso remember that Buffet is against the little guy investor. Ever look to see what one share of his fund costs....

 

[CWRMadcat]

Originally posted by: charrison

Originally posted by: Bowfinger

Originally posted by: charrison
from the posted artciles

Nevertheless, Berkshire's own tax bill has risen dramatically. In 2002, Buffett noted, the company paid $1.75 billion in federal taxes. This year, it expects to pay $3.3 billion, a sum Buffett estimates to equal 2.5 percent of total taxes to be paid by all U.S. corporations.

Some tax cut

It's interesting to me they pay so much in taxes when so many other companies pay so little, at least according to the countless anecdotes reported. I wonder if this is because Buffet has too much integrity to pay the tax shelter games, perhaps because of his belief that taxes are accpetable, or whether it is simply due to a lack of shelter options for a company like his.

He may, he may not. The divident tax may have got him, because he does not think companies should pay dividend. Many companies started paying divedend when the taxes on them were lowered. Either way it appears he is paying more under the current law. I am not sure what his complaint is, as he is always welcome to pay more.


ALso remember that Buffet is against the little guy investor. Ever look to see what one share of his fund costs....

It's probably to keep shareholder value. It's not like he's hurting for investors , so splitting stock to attract more investment isn't really important.

BRKA (Berkshire Hathaway) Shares: 1,288,000 at $93600.00
KO (Coca Cola) Shares: 2,445,264,000 at $50.10

 

[Jhhnn]

Well, Jmman, I think you rather adroitly miss the point of debt and its effect on the federal budget. We're currently paying ~$320B annually in debt maintenance, a figure that's only bound to increase as deficits continue and interest rates rise. Excluding SS, which actually ads more than it costs, that's the third largest single category in the budget, behind defense and HHS. HHS covers a lot of territory. That debt can easily overwhelm all other considerations, as we've seen in Argentina and other parts of the world. Your assertion that our debt is american-held is also not exactly true, either- The Bush debt is largely being financed by the banks of Japan and China.

I have a great deal of respect for Mr Buffet, not because of his obvious success, but because of his ability to maintain his humanity and down to earth perspective in spite of that...

 

[Zebo]

ALso remember that Buffet is against the little guy investor. Ever look to see what one share of his fund costs....

Uh huh. Saying we should lower taxes on the little guy and increase them on his type will leave you with less to invest right?

As far as his share price you can buy partial shares. both 1/10 and 1/100th, Sorta invalidates that argurment. He's never split or good reason being a value investor. While a $50 stock price, as most corps try and hover around, may be more attactive to most individuals being "easier" to buy it's also just as easy to sell it at those prices (phychologically) and leads to more pricing volitility which Berkshire Hataway does'nt have.

Personally I think this idea of keeping share prices within everyones reach is just another pyramid scheme played out on unsophiscated investors and that's why p/e ratios have shot though the roof the last 25 years. But the value simply is'nt there in these companies...when the chickens come home to roost everyone invested is in a world of hurt except for insiders of course and guys like me who play a direct and active role in my investments. Worse is the governemnt aids/abeits this rip off though thier virtual forced contribution scheme set up though company matches, tax breaks, early withdraw panalties among other things which make not investing in a company plan almost foolish. This IMO is the sole reason for the increase in valueation the last 25 years...SS contributions are the last rabbit they can pull out of the hat to prop up these prices after which market collapse.

 

[charrison]

Originally posted by: Zebo

ALso remember that Buffet is against the little guy investor. Ever look to see what one share of his fund costs....

Uh huh. Saying we should lower taxes on the little guy and increase them on his type will leave you with less to invest right?

As far as his share price you can buy partial shares. both 1/10 and 1/100th, Sorta invalidates that argurment. He's never split or good reason being a value investor. While a $50 stock price, as most corps try and hover around, may be more attactive to most individuals being "easier" to buy it's also just as easy to sell it at those prices (phychologically) and leads to more pricing volitility which Berkshire Hataway does'nt have.

Personally I think this idea of keeping share prices within everyones reach is just another pyramid scheme played out on unsophiscated investors and that's why p/e ratios have shot though the roof the last 25 years. But the value simply is'nt there in these companies...when the chickens come home to roost everyone invested is in a world of hurt except for insiders of course and guys like me who play a direct and active role in my investments. Worse is the governemnt aids/abeits this rip off though thier virtual forced contribution scheme set up though company matches, tax breaks, early withdraw panalties among other things which make not investing in a company plan almost foolish. This IMO is the sole reason for the increase in valueation the last 25 years...SS contributions are the last rabbit they can pull out of the hat to prop up these prices after which market collapse.

I would be willing to be that most stock purchases by the little guy are done by thru mutual funds and hence managed by professional market people.

1/100 of 93,000 will keep this out of most investors hands. But I am sure many hold even smaller portions of this via mutal funds.

 

[Jmman]

Originally posted by: Jhhnn
Well, Jmman, I think you rather adroitly miss the point of debt and its effect on the federal budget. We're currently paying ~$320B annually in debt maintenance, a figure that's only bound to increase as deficits continue and interest rates rise. Excluding SS, which actually ads more than it costs, that's the third largest single category in the budget, behind defense and HHS. HHS covers a lot of territory. That debt can easily overwhelm all other considerations, as we've seen in Argentina and other parts of the world. Your assertion that our debt is american-held is also not exactly true, either- The Bush debt is largely being financed by the banks of Japan and China.

I have a great deal of respect for Mr Buffet, not because of his obvious success, but because of his ability to maintain his humanity and down to earth perspective in spite of that...

The net interest payment in 2000 was 2.2 percent of GDP and in the 80's it was 3 percent. Once again, the sky is falling. In my original post I said that most of the debt was internally held. I stand by that statement. Only 21% is foreign held. This foreign held debt is not that bad of a thing anyway because it helps keep domestic interest rates down. Don't get me wrong, I am not saying we should be spending like the proverbial "drunken sailors", but then again I am not building the bomb shelter in Montana just yet.......

 

[burnedout]

Further interesting commentary from Mr. Buffet:

Just as the original 3% savings bond, a 5% passbook savings
account or an 8% U.S. Treasury Note have, in turn, been
transformed by inflation into financial instruments that chew up,
rather than enhance, purchasing power over their investment
lives, a business earning 20% on capital can produce a negative
real return for its owners under inflationary conditions not much
more severe than presently prevail.

[..]

That combination - the inflation rate plus the percentage of
capital that must be paid by the owner to transfer into his own
pocket the annual earnings achieved by the business (i.e.,
ordinary income tax on dividends and capital gains tax on
retained earnings) - can be thought of as an ?investor?s misery
index?. When this index exceeds the rate of return earned on
equity by the business, the investor?s purchasing power (real
capital) shrinks even though he consumes nothing at all. We have
no corporate solution to this problem; high inflation rates will
not help us earn higher rates of return on equity.

Note: Emphasis in italics added by Mr. Buffet.

Warren E. Buffet, Chairman, March 3, 1980

High rates of inflation create a tax on capital that makes
much corporate investment unwise - at least if measured by the
criterion of a positive real investment return to owners. This
?hurdle rate? the return on equity that must be achieved by a
corporation in order to produce any real return for its
individual owners - has increased dramatically in recent years.
The average tax-paying investor is now running up a down
escalator whose pace has accelerated to the point where his
upward progress is nil.

For example, in a world of 12% inflation a business earning
20% on equity (which very few manage consistently to do) and
distributing it all to individuals in the 50% bracket is chewing
up their real capital, not enhancing it. (Half of the 20% will go
for income tax; the remaining 10% leaves the owners of the
business with only 98% of the purchasing power they possessed at
the start of the year - even though they have not spent a penny
of their ?earnings?). The investors in this bracket would
actually be better off with a combination of stable prices and
corporate earnings on equity capital of only a few per cent.

Warren E. Buffet, Chairman of the Board, Feb 27, 1981.

Wow, who was POTUS in 79-80? Yes, that's right, Mr. Stagflation, himself: Jimmy "I attended Georgia Tech to learn math before they'd let me into Annapolis" Carter.

 

[ReiAyanami]

yeah, he must be a moron if he's only the 2nd richest man in the world via sheer financial savy.

oh wait, his shares jumped up another 1000 pts today: http://finance.yahoo.com/q?s=brka


that's plus 2% in the last two market days while MSFT dropped 2% today, making Buffet richest for the moment, until MSFT bounces back tomorrow, since Texas Instruments revised upwards and the nas is barely above 2k.

 

[BladeVenom]

If he thinks he should be giving the government more money, why doesn't he just do it? I don't see anyone stopping him from donating his money to government.

 

[CLite]

Another Buffet article I will use for a golden quote: http://www.cnbc.com/id/44142272

"I have worked with investors for 60 years and I have yet to see anyone—not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain," he said. "People invest to make money, and potential taxes have never scared them off."

A balanced approach must be used, we have to decrease spending and we have to at least let the bush tax cuts expire on the top bracket if not increase them a little more. Such increase of taxes will do absolutely nothing to stop people from investing or making moves which yield long-term profitability. Especially when we consider that federal taxes are at all time lows.

 

[matt0611]

Buffet should write out a check to the treasury, whats he waiting for?

How about 5 or 10 billion? He's got plenty of money. Put your money where you mouth is and set an example instead of writing op-eds about it.