Op Ed From Warren Buffett

[mrdannyg 274]

Somebody should do a poll where we guess Snow's occupation.I'm going with "small business owner." He seems to have a pretty good grasp of how businesses operate.

As someone who lends to small businesses, I would say that his understanding of finances and economics is consistent with most small business owners.

[FCP Bob 1,312]

Interview with Warren Buffett on Charlie Rose's show.http://www.charlierose.com/http://www.businessinsider.com/warren-buff...pathetic-2011-8

In an interview with Charlie Rose last night, Berkshire Hathaway CEO Warren Buffett called the 2012 Republican contenders "pathetic" over their opposition to raising taxes. When the candidates were asked if they would veto a 10-to-1 spending cut-to-tax increase deal to lower the deficit all 8 participating in the debate last week raised their hands. "That was pathetic," Buffet said. "I mean, listen, I like Republicans. If you got Democrats on some core issue to them, they’d probably do something just as silly. But when they take that attitude, they are really saying, you know, “I want to win this primary.” They are saying, “The country be damned, I want to win this primary."Read more: http://www.businessinsider.com/warren-buff...8#ixzz1VD2rGThv

[Roll the Bones 74]

I've already been talking about this for a while, but it looks like it's time for another update. Most people severely underestimate how unevenly wealth is distributed in the United States. The top 1% make 20-25% of annual income and have about 40% of the total wealth. It's estimated that millionaires in the united states are worth about 45 trillion(39 trillion + 6 trillion in tax evasion schemes). You could do a one time 33% wealth tax on only millionaires and pay off the entire national debt tomorrow. We could run our entire yearly government expenses exclusively on money from the top 1% and that group would still have a trillion dollars a year left over. The rich in this country have been the overwhelming beneficiaries of our deficit spending. Their incomes have skyrocketed in the last 30 years as tax rates have significantly decreased. The fair thing is to have those who benefited from the debt pay it back. Instead, Republicans will do everything in their power to screw over the poor and middle class even more than they already have. http://www.zerohedge.com/article/rich-are-...ore-double-2020http://www.vanityfair.com/society/features...currentPage=allhttp://www.nytimes.com/2007/03/29/business/29tax.htmlAlso, the "higher tax rate hurts investors" arguments is complete nonsense. We have far more investment money available than we know what to do with. The main problem with our economy is that there isn't enough demand, thus making very little worth investing in. The demand problem can't possibly be fixed by handing the rich even more money than we have already.

Great articles and links, thanks.

HAHAHAHAHAYou're right, dude. It was high time that we all had another excellent economics lesson from our very own resident genius. Keep the updates more regular.

You do realize that what he posted was a hypothetical and you obviously didn't even look a the links, believe in the "Great Divergence", income disparity or look at the various influences thought to be responsible for it.

no, that isn't the argument that he's making. he's saying people won't stop investing because of higher rates. buffett is making the non-investment argument as a red herring, and that's the problem when the real argument is that higher taxes destroys wealth. now what guapo said is true, in that higher capital gains taxes will affect when people sell. and if capital gains taxes do exceed the expected risk/reward ratio from any given investment, then no, people won't invest then either. but what buffett's implying, that taxes will be raised and people will simply stop investing as some sort of protest, is very misleading and distracts from the real arguments about the negative macro effects of raising taxes on higher wage earners and investors.as for the second part, I'm assuming you're just joking, but just in case, here is my sarcastic reply: hey great idea! I always thought that whole "right to property" thing was stupid anyways!

Well, the argument could be made that instead of being able to take profits at such a low rate, instead they would re-invest the money in America if that was the structure. I mean, if I have a business and can take the money now at only a 15% tax rate then I could sock away as much as I want under my mattress. But if the CG tax was 50% I would be more likely to find a way to re- invest that money.

Debt service is more like 6% of the budget, not 30% fwiw.And I find it comical that this forum is so hilariously anarcho-capitalist that hball can make claims that have 0, as in, like, no basis whatsoever in reality, and people say nothing.He claims "taxing the rich has near zero effect on tax revenue collected".Let me ask you, H, what is the largest source of federal revenues?This forum has gone so far off the deep end it's almost funny.

Thanks for being a cellphone text of reason in this god forsaken hell hole.

[akoff 0]

As someone who lends to small businesses, I would say that his understanding of finances and economics is consistent with most small business owners.

really? don't get me wrong small business guys have a lot to learn...and most of us have learned what we know the hard way but still...

[Dagata 0]

The chances are, they(republicans) wouldn't pass the spending cuts anyways and the tax increases would go through.of course 10-1 sounds like a big number, but we spend alot of money, so maybe 50-1 or 100-1 would be a better number.

[mrdannyg 274]

really? don't get me wrong small business guys have a lot to learn...and most of us have learned what we know the hard way but still...

I'm just cranky. Small business owners are often quite smart, plus they work a helluva lot harder than most of us.

[El Guapo 8]

My favorite part of SS post is when he said if people moved out of the US then they would lose their businesses. I also really enjoyed his mis understanding of wealth where he thinks that the rich have anywhere close to 33% of their net worth liquid.

[FCP Bob 1,312]

My favorite part of SS post is when he said if people moved out of the US then they would lose their businesses. I also really enjoyed his mis understanding of wealth where he thinks that the rich have anywhere close to 33% of their net worth liquid.

If all the rich people have to sell their assets to pay a wealth confiscation tax that will generate massive capital gains (ignoring for a moment that asset prices will drop) which will mean large amounts of capital gains taxes will also have to be paid. It's a win win on the tax front.

[SilentSnow 1]

My favorite part of SS post is when he said if people moved out of the US then they would lose their businesses. I also really enjoyed his mis understanding of wealth where he thinks that the rich have anywhere close to 33% of their net worth liquid.

My favorite part of this forum is where they introduce worthless straw men and false "facts", then pretend that I am the one being ridiculous.They don't have to lose their business if they move out, but in this theoretical example they would be taxed on any US profits at the same rate, so that would take away much of their incentive to leave. Sidenote-In Republicans' benighted examples of hypothetical small business owners, very few of them are multi-millionaires and none at all are managing a business from overseas. So you would have to rework your marketing to account for your change to the definition of a "patriotic" small business owner. As for the "liquid net worth" part, most of them do. Financial assets are definitely liquid, and tangible assets are at least partly liquid. The rich own far more than 15 trillion of these assets. I am not 100% sure, but given other links I've seen they might be excluding businesses and defining nearly 100% of that 45 trillion as liquid assets. For example, in the link below private individuals are thought to have approximately 65 trillion in liquid assets. I can guarantee you that millionaires have at least 45 trillion of that. http://rutledgecapital.com/2009/05/24/tota...illion-134xgdp/

[CindyLou 11]

Snow, I'm not entirely clear on who you are talking about.What is your definition of a millionaire?

[El Guapo 8]

OK couple things1. Answer Cindy's question of what do you consider a millionaire.2. What is your definition of liquid?3. If all the rich people are selling assets to create this magical 15 Trillion dollars in cash, who is buying?Once you answer these I will have more questions.

[SilentSnow 1]

OK couple things1. Answer Cindy's question of what do you consider a millionaire.2. What is your definition of liquid?3. If all the rich people are selling assets to create this magical 15 Trillion dollars in cash, who is buying?Once you answer these I will have more questions.

1.I'm not going to get into a dumb semantic battle if you aren't willing to address the main point. As defined by Deloitte, they are including residence equity as part of the definition of a millionaire. They estimate there are 10.5 million millionaires in the US. But apparently this definition of millionaire is highly offensive to conservatives. Deloitte estimates that the top 1% start at around 5 million net worth, and are unquestionably millionaires by anyones standards. The lowest estimate I have ever seen for the wealth controlled by the top 1% is 25 trillion, and some estimates are far higher. I used two definitions in my post- the top 1% and millionaires. To avoid confusion I could have rewritten the post as "You could pay off the entire deficit tomorrow if the top 1% had a one time 40% tax and the top 90-99th% paid a one time 25% tax". I figured since you guys ignore everything I say that a correct but imprecise 33% figure would be close enough. 2.The same as everyone else. Stocks, bonds, cash, easily convertible financial assets are liquid. Houses, cars and other financial assets are semi-liquid. 3.This is irrelevant. Obviously we wouldn't really sell all the assets in one day. Although since at least 2/3rds of the deficit is held domestically, a lot of the assets wouldn't need to be sold on the open market at all- just do a bookkeeping adjustment. My point is that contrary to what everyone was claiming, the rich in this country easily have enough wealth to pay off the entire deficit. And since they were the ones who gained nearly all of the wealth since we started running big deficits, they should be the ones paying it off. http://www.businessinsider.com/15-charts-a...ica-2010-4?op=1http://sociology.ucsc.edu/whorulesamerica/power/wealth.htmlYou guys really should read some of my links sometimes rather than just nit pick at trivial points. The amount of ignorance in the US about wealth distribution is truly stunning. In particular you should pay attention to the part on taxes. There is a widespread belief in the US that we have a progressive tax system, when in reality it is vastly less progressive than people think. Even the poor pay a decent portion of their income in taxes, and the middle class pay almost as high a percentage as the rich. There are many wealthy tax cheats who pay less in taxes than your average American.

[brvheart 1,752]

I'm going with "small business owner." He seems to have a pretty good grasp of how businesses operate.

HAHAHAHAHAHAMy favorite part was how, since every business is obviously profitable, then of course they have $333,000 in the bank. Obviously.

[brvheart 1,752]

You do realize that what he posted was a hypothetical and you obviously didn't even look a the links, believe in the "Great Divergence", income disparity or look at the various influences thought to be responsible for it.

Since our government hasn't already enacted that great idea, doesn't that make it hypothetical by definition?Another thing we could do to solve the debt crisis by tomorrow is negotiating with our alien overlords. That is just a hypothetical, but it would seriously work.

[El Guapo 8]

1.I'm not going to get into a dumb semantic battle if you aren't willing to address the main point. As defined by Deloitte, they are including residence equity as part of the definition of a millionaire. They estimate there are 10.5 million millionaires in the US. But apparently this definition of millionaire is highly offensive to conservatives. Deloitte estimates that the top 1% start at around 5 million net worth, and are unquestionably millionaires by anyones standards. The lowest estimate I have ever seen for the wealth controlled by the top 1% is 25 trillion, and some estimates are far higher. I used two definitions in my post- the top 1% and millionaires. To avoid confusion I could have rewritten the post as "You could pay off the entire deficit tomorrow if the top 1% had a one time 40% tax and the top 90-99th% paid a one time 25% tax". I figured since you guys ignore everything I say that a correct but imprecise 33% figure would be close enough. 2.The same as everyone else. Stocks, bonds, cash, easily convertible financial assets are liquid. Houses, cars and other financial assets are semi-liquid. 3.This is irrelevant. Obviously we wouldn't really sell all the assets in one day. Although since at least 2/3rds of the deficit is held domestically, a lot of the assets wouldn't need to be sold on the open market at all- just do a bookkeeping adjustment. My point is that contrary to what everyone was claiming, the rich in this country easily have enough wealth to pay off the entire deficit. And since they were the ones who gained nearly all of the wealth since we started running big deficits, they should be the ones paying it off. http://www.businessinsider.com/15-charts-a...ica-2010-4?op=1http://sociology.ucsc.edu/whorulesamerica/power/wealth.htmlYou guys really should read some of my links sometimes rather than just nit pick at trivial points. The amount of ignorance in the US about wealth distribution is truly stunning. In particular you should pay attention to this graphic. There is a widespread belief in the US that we have a progressive tax system, when in reality it is vastly less progressive than people think. Even the poor pay a decent portion of their income in taxes, and the middle class pay almost as high a percentage as the rich. There are many wealthy tax cheats who pay less in taxes than your average American.

1.) Primary residence should never be included. My father is a millionaire if you include primary residence. If you take it out, he's not even close. If you asked him to pay, even 25% of his net worth, he would lose everything. - So yes, that is highly offesnive, when you don't have an understanding of how net worth is different than liquidity.2.) The only true asset you list as liquid is cash. I can see an argument made for stocks, because they are easily sold. Bonds are not a liquid assets. And house and cars are no where close to a liquid asset. Your understanding of assets makes this i whole discussion moot.3. What the hell do you mean that selling the assets and who would buy them is irrelevant? It's the only thing that is relevant. How do you just do some simple book keeping to create 15 trillion dollars, where it doesn't collapse all financial markets? Currently there is about 9.5 Trillion in total cash in this country. Not all of that is from the top 1%. 2.4 Trillion of it is institutional and in retirement plans, so that does not count. So there is really about 7 Trillion in total cash in this country. If all of that is liquidated from the wealthy (which it won't be) where does the other 8 Trillion come from?

[brvheart 1,752]

Sidenote-In Republicans' benighted examples of hypothetical small business owners, very few of them are multi-millionaires and none at all are managing a business from overseas. So you would have to rework your marketing to account for your change to the definition of a "patriotic" small business owner.

... Are you implying that very many small business owners are multi-millionaires that manage a business overseas?

As for the "liquid net worth" part, most of them do. Financial assets are definitely liquid, and tangible assets are at least partly liquid. The rich own far more than 15 trillion of these assets. I am not 100% sure, but given other links I've seen they might be excluding businesses and defining nearly 100% of that 45 trillion as liquid assets.

...

3.This is irrelevant. Obviously we wouldn't really sell all the assets in one day. Although since at least 2/3rds of the deficit is held domestically, a lot of the assets wouldn't need to be sold on the open market at all- just do a bookkeeping adjustment.

...

[JubilantLankyLad 1,957]

Currently there is about 9.5 Trillion in total cash in this country. Not all of that is from the top 1%. 2.4 Trillion of it is institutional and in retirement plans, so that does not count. So there is really about 7 Trillion in total cash in this country. If all of that is liquidated from the wealthy (which it won't be) where does the other 8 Trillion come from?

These big companies, they just write it off.

[brvheart 1,752]

These big companies, they just write it off.

[El Guapo 8]

Here SS, let me help you:

What Does Liquid Asset Mean?An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.For an asset to be liquid it needs an established market with enough participants to absorb the selling without materially impacting the price of the asset. There also needs to be a relative ease in the transfer of ownership and the movement of the asset. Liquid assets include most stocks, money market instruments and government bonds. The foreign exchange market is deemed to be the most liquid market in the world because trillions of dollars exchange hands each day, making it impossible for any one individual to influence the exchange rate.

Let me also help you translate the mentioning of 'bond' so you don't try to get me on a gotcha. They are talking about shorter duration US Gov bonds, which the price does not fluctuate much and are easily redeemable before the maturity date.

[hblask 1]

4. Not really. When someone making more money has a lower average tax rate, that is indicative of a structural problem. So some people would be discussing that issue for reasons that aren't just a distraction. Now, if you want to change "anyone" to "any politicians" in that sentence, then I will agree.

The problem with higher incomes paying a lower percentage than lower incomes is about simplifying the tax code, something that nobody objects to, as far as I can tell. I don't think that should be discussed in the same terms as "tax the rich", which implies raising tax rates.

[hblask 1]

HAHAHAHAHADo you realize how retarded you are? I now believe that you are some sort of community college philosophy instructor on the west coast.

Don't feed the trolls. Only reply to SS if he makes a point that a sane, reasonable person could believe.

[hblask 1]

nvm

[FCP Bob 1,312]

Don't feed the trolls. Only reply to SS if he makes a point that a sane, reasonable person could believe.

Silent Snow is not a troll at all. He is misguided and wrong about a lot of things but he has his position and tries to support it with facts and links that he thinks support his positions. Somebody like yourself who holds non main stream positions should understand that just because people don't agree with you doesn't make you a troll.I think it's great to have people of differing positions discussing things since it opens our eyes to how other people think about things. Before my contact with you for example I've never discussed these sort of issues with a full blown ideological Libertarian and while I think you are also wrong and misguided in some of your positions I do learn from them.

[hblask 1]

Silent Snow is not a troll at all. He is misguided and wrong about a lot of things but he has his position and tries to support it with facts and links that he thinks support his positions. Somebody like yourself who holds non main stream positions should understand that just because people don't agree with you doesn't make you a troll.I think it's great to have people of differing positions discussing things since it opens our eyes to how other people think about things. Before my contact with you for example I've never discussed these sort of issues with a full blown ideological Libertarian and while I think you are also wrong and misguided in some of your positions I do learn from them.

OK, fair enough, and most of the time I agree with you on SS, but this latest thing.... seriously? Just confiscate that much wealth with no economic consequences, with everything retaining its value? That's not real, right? It can't be. Nobody can really believe that.

[El Guapo 8]

OK, fair enough, and most of the time I agree with you on SS, but this latest thing.... seriously? Just confiscate that much wealth with no economic consequences, with everything retaining its value? That's not real, right? It can't be. Nobody can really believe that.

It's all just book keeping Henry. Simple line adjustment from debit to credit should take care of it.