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Discussion Starter · #1 ·
This is probably to long for most on here... A very interesting video or read (video is on link)

Warren Buffett and NBC's Tom Brokaw: The Complete Interview
Posted By:Alex Crippen

The Tom Brokaw piece on NBC Nightly News Monday night highlighting Warren Buffett's call for a higher tax rate on very wealthy Americans includes an excerpt from a sit-down interview with Buffett.

You can see the Nightly piece and read the transcript in the Warren Buffett Watch post NBC's Tom Brokaw Puts Spotlight on Warren Buffett's Call to "Tax the Rich!"

Brokaw appeared on CNBC's Squawk Box the next morning with a few more minutes of the interview and for a discussion with the Squawk team that turned into a semi-debate between Joe Kernen and Brokaw. WBW post: CNBC's Kernen Challenges Buffett's Call for Higher Tax Rates on the Rich.

With many thanks to our colleagues at NBC Nightly News working with CNBC's Patti Domm (who also writes the always informative Market Insider blog on, Warren Buffett Watch is now able to bring you Brokaw's complete interview with Buffett.

Along with tax rates, the two also discuss:

Threats to the U.S. economy
A million dollar challenge to Buffett's "fellow rich guys"
Investing in China and human rights
CEO compensation
The interview is presented here in two parts. The first part appears below.

The second part is on a continuation page.


Tom: Mr. Buffett, everyone's obviously concerned about what's going to happen to the American stock market and to the economy for that reason. Is there reason to be concerned about the fundamentals of the American economy?

Warren: Not over the long term. I mean, in the last century-- American standard of living in real terms improved seven for one. We've-- we've got a system that works well. But we will have recessions from time to time. There-- we had 'em in that century. We had the Great Depression in that century.

But still at the end of the century, seven for one is not bad. And-- we could be-- we could be heading into a recession now. I don't know. But certainly there are some signs of that. And-- and there are certain fundamentals that are out of whack for-- temporarily. But they will get solved over time.

Tom: Is the housing crisis as serious as a lot of people think it is?

Warren: I think it probably is. There-- there are a lot of people that-- have mortgage payments that they simply aren't going to meet. Housing price appreciation which was built on everybody's model a few years ago is not going to occur for a few years. In fact, it could well be depreciation. And that changes the game a lot. It'll get solved eventually. We've got a growing population, which helps us if we get out of whack in terms of the-- the houses available. Population solves that. But it doesn't solve it next month, or even next year.

Tom: Well, you've got some businesses that are attached to housing. Furniture, for example.

Warren: Right.

Tom: When something goes wrong in housing, it really does drop down through the economy. Appliances, furniture--

Warren: You bet. (LAUGHTER) We-- we have-- we have furniture stores in a number of cities, and what you see is in a Las Vegas, where-- where the foreclosure rate is very high, sales are way off there. On the other hand, in Omaha, in Kansas City, they're up.

Tom: Are you surprised there's not more talk in this presidential campaign about economic fairness and economic justice?

Warren: Yeah. I-- I-- I am surprised-- it may be that everybody wants to be cautious-- while they're looking to get nominated, but-- but the degree to which the-- economic-- well, the taxation system has tilted toward the rich and away from the middle class in the last ten years is-- is dramatic, and I don't think it's appreciated. And I think it should be addressed.

Tom: You've gone very public with this.

Warren: Right.

Tom: You've talked about in your office, for example, you pay a much lower tax rate with all of your wealth than, say, a receptionist does.

Warren: That's exactly right, Tom. And I-- I think the only way to do it is with specifics, and-- and - and in our office, 15 people cooperated in a survey out of 18. I didn't make anybody do it. And my total taxes paid-- payroll taxes plus income tax-- and the payroll tax is an income tax. It's based on income.

Tom: Yeah.

Warren: Mine came to-- 17.7 percent. That-- that was the-- that was line 61 I think-- or, no, line 43-- is the percent of taxable income, plus payroll taxes, 17.7 percent. The average for the office was 32.9 percent. There wasn't anybody in the office from the receptionist on that paid as low a tax rate. And I have no tax planning. I don't have an-- I don't have a-- an accountant. I don't have tax shelters. I just follow what the U.S. Congress tells me to do.

Tom: Why do you think that there's not more outrage about that?

Warren: I-- I don't think people understand it. For one thing, you'll see a lot of surveys that say the rich, the top one percent pay this much of the income tax. Now I think what people don't realize is that almost one third of the entire budget comes from payroll taxes. And payroll taxes on income, just like income taxes are taxes on income.

And the payroll tax is over $800 billion out of two and a trillion, or something like that. And people don't understand-- they-- they-- that the rich pay practically no payroll tax. I mean, I paid payroll tax last year on $90 odd thousand, whatever the number is. I paid income tax on $66 million. But my double income tax, one of 'em quits at $90,000. And the remaining $66 million does not get taxed with payroll tax. So, the person who makes $60,000 in our office gets ta-- taxed in full on the payroll tax, and taxed in full on the income tax. And-- and all the statistics you read, particularly the one don't like taxes, well now, they totally ignore the payroll tax. And it's huge now.

Tom: Of all the tax lines that you've seen proposed over the years, a flat tax, a consumption tax, a more progressive income tax, which is the one that appeals to you the most?

Warren: Well, in theory a progressive consumption tax makes the most sense. I mean, if you tax the people who use the resources of society rather than ones who-- who-- who provide the resources of society, that makes more sense. And a consumption tax can be very progressive.

You can have just an unlimited IRA. As long as you invest money, and don't actually spend it for yourself, or your kids don't spend it, or whatever-- you don't get taxed. As soon as you start making withdrawals from society's bank, start using the resources, the-- the sweat of other people to-- benefit yourself, you would pay on that. That-- that's the one that makes the most sense. I don't-- it isn't gonna happen-- in all likelihood.

Certainly the worst taxes-- is something like a sales tax. I would say that we've got a pretty bad system, when we tax the person who-- who cleans out my office, the receptionist. They are paying 15-- payroll taxes, over 15 percent now, just for openers.

Most of my income is taxed at 15 percent, and-- and doesn't pay a payroll. Mainly it’s dividends and capital gains. And if you look at the For-- Forbes 400, a bunch of my fellow rich guys-- they will-- their tax rate overall to the federal government will be less than that of their receptionist. And I challenge anybody. If they want to make me a bet on that, and I've urged Congress, both the Senate and the House, to get the figures anonymously from the IRS. Just look at that Forbes 400. Takes a billion three to get on the Forbes 400 this year. And the aggregate wealth is just staggering. And those people are paying less percentage of their total income to the federal government than their receptionists are.

Tom: Will you put some money on the table on this one?

Warren: What--

Tom: You said-- you said you'd pay a million dollars to somebody.

Warren: I'll-- I'll bet-- I'll bet a million dollars against any member of the Forbes 400 who challenges-- me that the average for the Forbes 400 will be less than the average of their receptionists. So, I'm-- I'm-- I'm-- I'll give 'em an 800 number. They can call me. And the million will go to whichever charity the winner-- designates.

Tom: How much are you hearing from your fellow rich fellows, as you describe them?

Warren: I don't hear anything. They're happy. They are not paying the tax rate their receptionists are.

Tom: Why do you think that is? I mean, Congress took a look at this this year with the hedge fund operators.

Warren: Right.

Tom: Who are getting taxed at about 15 percent.

Warren: And they-- and they're screaming about that. And they-- and-- and it-- and they're often deferring taxes by-- by using-- foreign tax statements. And what happens--

Tom: But why-- why won't Congress step up on this in your opinion?

Warren: Well, I-- I-- I don't know the answer to that. I do know that the hedge fund operators made a record amount lobbying-- in recent months, so they give money to the political campaign and-- and who represents the cleaning lady?

Tom: The hedge fund operators and the U.S. Chamber of Commerce and others have said, "It's going too far." In fact, the hedge fund operators have created enormous wealth for the little guy as well, pension funds and other people who participate in those private equity partnerships. And so in the end it really does spread the wealth in a way.

Warren: Well, they say they work hard and that in the process of working hard they make other people money. And-- and that's true of you. That's true of a whole bunch people in the world. But that doesn't entitle them to a preferential tax rate. And the-- and the truth is that their occupation is going to work everyday. Working on the companies they buy, or working on trying to find what securities are cheap.

And when they get-- the day is done, they are taxed at a lower rate on-- on so-called carried interest and that sort of thing, they are taxed at a lower rate than the beginning rate for their cleaning lady and the payroll tax, forgetting about our income tax.

And the truth is that-- that-- that group, and really all the rich in one way or another-- have lobbyists, you know, coming out of their ears. And are down there-- whenever-- whenever something threatens their favored status, they are in Washington, you know-- en mass. And who is there representing the person that pays the payroll tax? I don't know of any group that is going around saying the-- that is saying, "It's too tough for these people who-- barely eke out a living to be paying 15 percent on payroll taxes."

Tom: Well, the Senator just across the state line here, Charles Grassley, of Iowa has spoken out about this.

Warren: I'm for him. He's a terrific guy. I mean, he-- he really wants to do something about it. But he's a very lonely man.

Tom: On the Democratic side where you would think this would be a hot issue, there hasn't been a lot of people-- there haven't been a lot of people …

Warren: No. They-- they talk about it some. But they-- they feel the pressure of money and politics, and-- and you know how-- how the number of-- of-- of lobbyists has mushroomed. And a number of the hedge-- or the private equity people were down there personally lobbying going from one Senator to another. And-- and these people make campaign contributions. They hire lobbyists. And I just don't know who's lobbying on behalf of-- of the person-- the people in my office.

Tom: Grover Norquist, who is-- the anti-tax guy, mostly on the Republican side. Why isn't there a Grover Norquist representing the receptionist and the cleaning lady?

Warren: Well-- maybe I'm trying to be that, but maybe I'm-- ineffective. And-- and it-- it's-- you know, people-- it's that old story, you know, don't-- don't tax you. Tax-- don't tax me. Tax the fellow behind the tree. Everybody hates taxes, and-- yeah. But if we're gonna raise two and a half trillion, we've gotta get it from somebody. And-- and it's-- it's very nice to say that, you know, that "I'm too heavily taxed and they should get it from somebody else." But they get-- they get almost a third of that money from the payroll tax now. And nobody ever talks about it.

Wednesday, 31 Oct 2007
Warren Buffett and NBC's Tom Brokaw: The Complete Interview
Posted By:Alex Crippen
Topics:Economy (U.S.) | Barack Obama | Hillary Clinton | Executive Compensation | Private Equity | Congress | Presidential Politics (2008) | Wealth | Taxes | China | Warren Buffett
Companies:petroChina Company Limited | Berkshire Hathaway Inc.
PART TWO: BUFFETT and BROKAW - (Part One appears on the first page of this post)

Tom: On the other hand-- you'd have members of this administration and others who are adherents of this administration saying, "The great lesson-- of the last 20 years has been: cut taxes. Fewer taxes, especially for the wealthy. That helps the whole economy. We wouldn't have gotten through the post-9/11 period without the tax cuts that George Bush pushed through."

Warren: Tom, I've been around rich people all my life. And I have seen capital gains taxes close to 40 percent. No one went home at 3 in the afternoon and said, "I've worked enough, and because tax rates are so high, I think I'll-- I'll go to the movies." I mean, people-- people want to maximize their after tax income, and there's two ways to do it. In-- increase their income, or get Congress to lower the tax rates for them. But I have never seen anybody with capital say, "I'm going on strike. I won't invest." I-- I've been managing capital for 50 years for other people. No one left and said, you know, "This-- the taxation system's too tough. I-- I think I'll just stick it all under my mattress." They can't stick under their mattress. They're going to invest their money regardless.

Tom: When you talk to presidential candidates-- and you-- you've been now outspoken about your preference for Democrats--

Warren: Yeah.

Tom: --when you put this before Hillary Clinton, or Obama, or the people who come to see you--

Warren: Both the people you mention have heard me talk about it--

Tom: Right.

Warren: Yeah, probably more than they'd like to.

Tom: But they haven't moved it to the top of their agenda.

Warren: Well, it's-- if you read-- if you read Obama's book, for example--

Tom: Yeah.

Warren: --it's in there. And if you talk to Hillary-- no. I think-- I-- I think in general they feel that the middle class and-- and-- and really the lower class in terms of income have-- have gotten too much shoved on them. And-- and it's been-- it's been to benefit the rich. It-- but it-- it has not been the main thrust of anybody's campaign.

Tom: Have you ever seen a tougher time in many ways for the middle class in this country?

Warren: Well, the middle class is a lot better off than it was 50 years ago, or 100 years ago. I mean, it-- it is true that if the economy improves, everybody benefits. So-- so it is-- it was a lot tougher, you know, 50 years ago. It was tougher 30 years ago. They-- people have improved their standard of living. But-- but if you look at the cutoff point on the Forbes 400 20 years ago, 21 years ago I think, it was a hu-- it was $190 million. It's now a-- a-- a billion three hundred million. I mean, it's up roughly seven for one. I will guarantee you that the working stiff is not up seven for one in the last 20 years.

Tom: You have some interest in China… Has that been complicated for you, your investments in China and the kind of attention that you've gotten with it?

Warren: Well, not-- not really. I mean, we-- we bought PetroChina stock when it wasn't so well known. Last week at one day, it was the second most highly valued company in the world next to Exxon Mobile. It was above General Electric. I mean, it was number two in the world. So, the Chinese have made enormous progress in the last ten or 15 years. And-- and-- and they'll continue to make progress. What they're doing is they're finding out what the human potential is. I mean, they've always had an incredible number of smart people, energetic people. But their system didn't allow those people to develop their potential. And now they're doing it.

Tom: They're taking a look at Bear Stearns. You've got a lot of friends at that-- house on Wall Street. That make you nervous at all that the Chinese will become involved in our capital markets in such a direct fashion?

Warren: Well, Tom, everyday-- net we're going to buy about $250 billion worth of goods and services from China beyond what we sell to them. So, we're handing them, call it $700 million a day. And what are they gonna do with it? We don't expect them to stick it under the mattress. They have to invest in something. They can buy stock in Bear Stearns. They can buy U.S. government bonds. They can buy real estate here. But we are force feeding dollars to them, and we're taking their goods in exchange. And for them to want to do something with those dollars-- it's perfectly understandable.

Tom: Does it make you anxious?

Warren: No. Well, it-- there are things about the whole foreign exchange situation that make me a little anxious. But it-- it is not specific to the Chinese at all. We are making free decisions everyday to buy their furniture, or buy their-- buy their shoes, or whatever it may be.

And we give them-- we give them a little piece of America in exchange. That's the nature, because you gotta give 'em something in exchange for it. And-- and-- we're not giving 'em enough products.

Tom: You've got a lot of fans out there, but some people have said you could have a lot greater influence on social justice in China in the human rights area, if you use the leverage of your investment—there, in that fashion. Is that tempting to you?

Warren: No. I-- I don't seem to be able to use the leverage of my investment in the United States (LAUGHTER) to do anything about tax policy. So, I-- the-- the Chinese government is going to behave in their own self interest to a great degree like the U.S. Government. When our values clash with theirs, that's something to be worked out basically government to government.

But-- we have been treated very well in terms of our investment in PetroChina. Twenty-nine of the 30 largest companies that are publicly owned in China are controlled by the Chinese government. That's a fact of life in China.

So-- all-- the three major oil companies, they're all-- they all have a majority of their stock owned by the Chinese government. And you can go up and down the lines, the banks, and the life insurance companies and everybody else. So, you are-- you are going into a state controlled company when you buy stock in China. But-- they've done pretty well by their-- by their investors. And-- and-- they don't like some of our policies, and we don't like some of their policies. And--

Tom: Do you-- do you raise that with them?

Warren: No. No. No. I-- if I-- if I raised with-- take the stock. It's something we own in the United States, I raise tax policy with them, do you think (LAUGHTER) is that gonna change what the U.S. government does? No. It's-- it's determined by other factors.

Tom: Do you think the 21st century will be the century of China?

Warren: Well, certainly China is going to gain economically relative to the rest of the world in this-- in this century. There's no question it that. They're galloping forward. They come from a very low base, and-- and-- and that's gonna cause a lot of problems for people.

I mean, we-- we worry about, you know, global warming or something like that. But we're using 12 times as much oil per capita-- as China. Now as they use more, if we start pointing fingers at them, I think they're entitled to point fingers back at us. We're the ones that have been using up the resources of this planet-- at a-- a clip far beyond-- you know, our per capita-- position in the world.

So-- I-- I think China is going to be-- I think they're going to be moving pretty fast in terms of-- economics. And it'll take 'em a long time, because the base is so low. But-- they will be a big story.

Tom: When you look at China as an investment, however, don't you have to factor in more fully the politics of China than you do-- when you're making an investment in this country--

Warren: Sure.

Tom: Or in western Europe?

Warren: Sure. No. You're going into a different society. And-- and they aren't gonna change their society dramatically to-- adapt to us. But we're still delighted to go in there. But they-- that's true around the world generally. But obviously in China, there you've got a-- you've got a planned society in effect. And-- and-- and it's different than the United States.

Tom: A lot of wealthy people that I've talked to have said about this, "But Warren doesn't factor in how much we pay in state taxes, you know." Those who live in New York-- face a very heavy tax burden. Their estate taxes in New York, to some of them, seem confiscatory. So, it balances out over the long haul.

Warren: Well, the state taxes go to states. But we still have $2.6--

Tom: Yeah.

Warren: --trillion raised for the federal government. And-- and the state taxes obviously vary enormously. But the disparity-- the rich-- the-- the very-- the super rich at the federal level are paying lower tax rates to the federal government. That is not true on the-- on the state level. But that-- you know, if somebody pays a high tax rate in-- in-- in New York, they can always move. I think there's close to a dozen states that don't have an income tax. My friend, Bill Gra-- Gates, was in Washington. They don't have a state income tax. So, there-- there are options available on that. There are not options available to the poor on the federal income tax.

Tom: If the taxes get raised on the super wealthy, do you think it'll cut into philanthropy?

Warren: No. No. If you look at philanthropy in this country, it's been about two percent of GDP. We've had 70 percent tax rates. We've had 40 percent almost tax rates on capital. We've all kinds of different tax rates. Two percent of GDP end up going to philanthropy. It won't change things.

Now the estate tax, incidentally, I mean, the estate tax raises about $30 billion a year. That $30 billion, which some people want to get rid of, that would provide a $1,000 a family to 30 million families. If you take the 30 million poorest families in the United States, a $1,000 each would make a difference to every one of 'em. The $30 billion raised through estate taxes-- just guess how many people die in the United States every year. It's a little over 2.4 million. How many people will pay an estate tax this year? How many estates will pay a tax? About 12,000. One out of every 200.

So, by letting one out of every 200 off the hook, you get rid of a sum which would give a $1,000 to every one of 30 million poor families. I mean, I think it's an outrage that-- that people talk about, you know, getting rid of an estate tax that only gets one out of every 200 to start with.

Tom: Executive compensation. You feeling any better about it?

Warren: (LAUGHTER) Well, I-- I-- I feel fine with people making a lot of money for doing a great job. I mean, you know, the people in your field that do a great job make a lot of money. (LAUGHTER) ….

Yeah. But-- what-- what I object to is the people that the-- the biggest payday of their life is the day that they leave a company from which they failed, or-- or where they get paid automatically big sums. If you want the shot at the brass ring-- if you want a shot at making tens of millions of dollars a year, if you flop, why in the world should you be making $5 million a year, or $3 million a year? That-- it's-- pay for performance is fine, you know. Pay for showing up is not-- with the-- with the huge goodbye present, you know-- or-- or bonuses that are not tied to real performance, I think that's terrible.

Tom: But, again, that's not getting very much attention. I mean, it was hot for a while.

Warren: It was hot for a while.

Tom: It's gone away.

Warren: Now, well-- the CEO cares enormously. The comp committee doesn't care …. I mean, if you-- you-- if-- if-- if the CEO is negotiating with a labor union, they stay up 'til 3 in the morning, and they do it over the weekends and everything else. And they worry about a few cents per hour. The comp committee meets for a couple of hours. I've never heard of a comp committee meeting at 3:00 in the morning, you know.

Tom: Right.

Warren: Or staying there over the weekend to negotiate with the CEO. So, you've got this intensity of-- of caring on the part of one party to the negotiation. And you've got people on the other side to whom often it's play money.

12,530 Posts
Discussion Starter · #2 ·
and in case you aren't familiar with the back story....
Warren blasted the tax the middle america plan by pointing out how he and all the ultrarich pay less % tax than the middle...

I hope/wish he could do something about it.. but he is right.. the rich have thousands of lobbyists lobbying to keep their taxes low.... and who do we have? nobody.

Taxes started out taxing the rich.. Didn't take to long for them to roll that off their backs and onto ours... Guess it helps to be the side that makes the rules eh?

He pointed out that he pays 17% on 46 mil while his secretary pays 30% on her 60k salary...

nice eh?

Buffett blasts system that lets him pay less tax than secretary
Image of Warren Buffet
Tom Bawden in New York

Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

The comments are among the most signficant yet in a debate raging on both sides of the Atlantic about growing income inequality and how the super-wealthy are taxed.

They echo those made this month by Nicholas Ferguson, one of the leading figures in Britain’s private equity industry, when he criticised tax rates that left its multimillionaire venture capitalists “paying less tax than a cleaning lady”.

Last week senior members of the US Senate proposed to increase the rate of tax that private equity and hedge fund staff pay on their share of the profits, known as carried interest, from the 15 per cent capital gains rate to about 35 per cent.

Lloyd Blankfein, the chief executive of Goldman Sachs, acknowledged in an interview yesterday that there were justified concerns about the huge profits generated by private equity firms and that he worried that income inequality was “poisoning democracy”. He also said that he would be voting for the Democrat candidate at the next election. Mr Blankfein is the highest-paid executive on Wall Street, earning $54 million last year.

Mr Buffett, who runs the investment group Berkshire Hathaway and is widely regarded as the world’s most successful investor, said that he was a Democrat because Republicans are more likely to think: “I’m making $80 million a year – God must have intended me to have a lower tax rate.”

Mr Buffett said that a Republican proposal to eliminate elements of inheritance tax, which raises about $30 billion a year from the assets of about 12,000 rich families, would broaden the disparity between rich and poor. He added that the Republicans would seek to recover lost revenue by increasing taxes for the less prosperous.

He said: “You could take that $30 billion and give $1,000 to 30 million poor families. Or should you favour the 12,000 estates and make 30 million families pay an extra $1,000?”

875 Posts
It's a lot of bull.

First, the secretary is paying social security. Warren isn't above a certain part of his small income that he does actually get. Unless he details how he's making money through tax free municiple bonds, etc. which lower's his percentage dramatically, it's all just a dog and pony show.

Lower all the rates of taxation. It's our own money.

Taxes are not a good investment.

875 Posts
Maybe Warren should focus his efforts in trying to direct those in government to live within the means of lower spending?

I Went All In
1,171 Posts
Here is another take...sorry for lack of editing...

Tax interpretation, not security

Subject: Drinking vs Taxes

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 we re 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'sbill 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 hi ghest 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.

David R. Kamerschen, Ph.D. Professor of Economics University of Georgia

For those who understand, no explanation is needed.

For democrats no explanation is possible.
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Irony helps us play!
29,500 Posts
They have been drinking overseas for a while now.

The last IRS Data I saw shows the bulk of income taxes being paid by the 2 groups of incomes of: $100,000 thru $200,000 and the group of $200,000 thru $500,000

So, really, the wealthiest person is not the one buying the drinks. The truly wealthy get others to buy their drinks under the false pretense that they will be rewarded in the future.

Read it yourself:

Failed rehab
14,908 Posts
"Taxes are not a good investment"

Yeah, everyone should just put out their own fires, police their own lives, pave their own roads and fight their own wars.

You don't need Socialist-Republic levels of taxation to provide those service. Moreover, those service (with the exception of war-fighting, and in part, interstate) are provided by local gov, not the the feds, so the Fed tax rate is irrelevant to providing those.

Second, current tax rates provide more than enough for all of the above, IF politician would quit wasting everything they receive on buying votes and favors for the purpose of maintaining power, as well as simple greedy self-dealing occur both at the local and Fed level."Hired" trucks, bridges to nowhere, and so the list goes on.

Taxes are about as good of an investment as the crap they were selling in "Boiler Room."

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Rob, I certainly don't disagree about the wasting of money buying votes, pet projects, etc... And, there are grants that come from the Feds for local services. Naperville FD has some shiny stocked expensive trailers thanks to HSA grants. Other police tactical training has also been funded by HSA grants with interdepartmental cooperation. The Fed dollars do 'trickle down'... Yes, the majority comes locally, but Fed kicks in too.

12,530 Posts
Discussion Starter · #10 ·
It's a lot of bull.

First, the secretary is paying social security. Warren isn't above a certain part of his small income that he does actually get. Unless he details how he's making money through tax free municiple bonds, etc. which lower's his percentage dramatically, it's all just a dog and pony show.

Lower all the rates of taxation. It's our own money.

Taxes are not a good investment.
Kinda scared to wish for this.. because it will kill my goal. :(
CLose the loopholes

WHy do you get taxed for your labor.. but not for growth?
most of warrens income is cap gain.. cap gains are taxes not only lower.. but they dont have to pay social security on it.. Which is twice as bad as all the w2's on here think (we pay half, employer pays half.. if your self employed... It's double for you)

So why is it if you work for money you pay 35-45%... but if money works for you.. you pay 15%?

Because the rich and powerful didn't like it when they burden was strapped to them.. and they could afford to have the rules re-written...

progressive taxation as a few here only works some of the time for some of the people... thats considering the 100k to 200k the well to do.. or even the up to 500k... the "rich" warren is referring to probably spend more money than that per year on wait staff for themselves...

I think Chris Rock referred to it as the difference in "rich" and "wealthy"

Warren is "wealthy"

and I can think nothing but good for him to come out and say "this is bs" considering what he has to gain / lose for it. He did it on principal.. Not for money, not for fame... Because he thought it was right..
A lot of people on here probably know how much this guy gave to charity recently (ok. the gates fund.. whatever)...

Most people at his level view "us" as slightly above cockroaches...
He doesn't.
Good for him.

12,530 Posts
Discussion Starter · #11 ·
Sorry SD that wasn't so much directed at you as to you.. I started out replying to something you said then went off onto everything else... THen I had someone come up to me and start whining that she had to go outside... so i rushed it :)
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