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To: Oeconomicus who wrote (157513)	6/4/2003 2:09:59 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 164684

OK, Buffet's not quite talking about the plan that passed - all he's only talking about eliminating ALL taxes on dividends, a fantasy he dreamed up to try to make a case for opposing something quite different. actually, that's EXACTLY where bush wanted to go. i think we both agree we are glad that bush's favorite plan didn't pass, right? ;-) And he doesn't even get his arithmetic right. He seems to think that getting a $310 million dividend from his company is equivalent to a $310 million tax cut that could have been used to give $1000 to 310k families. actually, you misunderstood what he was saying. what he's saying is that the govt is setting up a system that will CHANGE BEHAVIOR. the change buffet described would add $310 million to his pocket he doesn't now get. that's $310 million in marginal dollars in his pocket. his stated alternative is to set up a system that CHANGES BEHAVIOR by putting $310 million in the hands of 310,000 families. that's his point and you misunderstood it. But simple math errors aside, as well as simple comprehension errors. he also forgets that for Berkshire to pay out a billion of dividends, they must first earn something north of $1.6 billion of taxable income and pay more than a $600 million of taxes. ah, unless they pay their people with stock options and get to expense them w/o running it down the income statement. the more gimmicks, the more they get to play the game. The income is not tax-free at all - it's just no longer taxed at twice the rate of any other kind of income. true enough, it is currently double taxed and some portion of the tax, if not all of it, is pushed onto the consumer to pay. therefore, under your scenario, his secretary would pay 30% on her income AND THEN BE NICE ENOUGH TO PAY ALL OF BUFFET'S TAXES FOR HIM, TOO. and that's your definition of "fair?" Your 3% number is meaningless, bugman. Had he set up his insurance/investment holding company years ago as a limited partnership or any other kind of pass-through entity, it would pay no income taxes at all, but he would, regardless of whether he actually received a dividend or not. the 3% isn't meaningless. you just desire it to be so b/c you can't justify the 90% tax decrease the elite rich were LUSTING after. and why didn't he do just do the partnership thing, rd? we both know, right? buffet deemed the benefits of incorporation as being well above the cost of being a partnership... iow, buffet chose the BEST organizational vehicle and now you want to somehow take the discarded organization structure OUT OF CONTEXT to argue buffet somehow cheated. dhimself? Why should one form of business legal entity be double taxed and others not? YOU DON'T KNOW? rd, come on, it is call LIMITED LIABILITY. it is b/c some forms facilitate cash infusions. the smartest folks in the world have chosen structures that double tax B/C IT WAS IN THEIR SELF INTEREST TO DO SO. nobody twisted their arm. Be honest, skeeter. Don't spin it, just say it - Buffett is wrong. no. he isn't wrong. society will not be better off when those that own 70% of the nation's wealth get MASSIVE tax reductions - some on the order of 90%. that's NUTS! yes, there is double taxation and everyone that is being double taxed has chosen to be double taxed out of their own volition b/c it served their self interest. the benefits were better than costs. surely you understand basic economics. surely you understand that as much of the tax as ossible is transferred to the CUSTOMER - the poor lech paying 30% of their taxes. buffet didn't pay a dime of his corporate taxes. his corporation IS NOT HIM - THAT'S THE WHOLE POINT. you want buffet, and those like him, to get all the benefits of incorporating w/o paying the costs. it is fair to you that berkshire's customer's pay most, if not all, of berkshire's taxes while most of them are paying around 30% income taxes while buffet pays 3%. I'M ASTOUNDED you think this way. the rich already have a HUGE economic advantage over others and you'd increase that even more. it is that kind of thinking that led to the french revolution. marie's wealth did her no good as her head hit the ground. ps - and then you falsely criticize buffet b/c you don't understand his argument but totally ignore the falsehoods put out by bush... like this one... "Administration officials say that the $310 million suddenly added to my wallet would stimulate the economy because I would invest it and thereby create jobs. But they conveniently forget that if Berkshire kept the money, it would invest that same amount, creating jobs as well." interesting...