Author Topic: the sage of omaha and you  (Read 8473 times)

Mr Mark

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the sage of omaha and you
« on: May 06, 2013, 10:08:20 PM »
I love reading some of the stuff around Berkshire Hathaway and Warren Buffett.

While the annual shareholders meeting underway, remember if you hold a few Vanguard index funds that you, too, are a shareholder in the famous company. Warren buffet is actually working for you.

As I sip a glass of half decent Californian merlot, i reflect how nice that he and the team are working for me, how as a result I don't have to deal with all that tedious analysis they have to do. Capitalism.

Next time you see a pic of Mr Buffett, tell the kids how you're his boss.
« Last Edit: May 07, 2013, 07:48:05 AM by Mr Mark »

Joet

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Re: the sage of omaha and you
« Reply #1 on: May 06, 2013, 10:12:48 PM »
B shares? yawn :) hehe j/k

He also mentioned to expect lower returns moving forward right? It's basically like owning shares in an insurance company [that does interesting things with their spare cash]

not terribly exciting to me but past performance is pretty hard to argue with!

smedleyb

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Re: the sage of omaha and you
« Reply #2 on: May 07, 2013, 06:09:00 AM »
$16 invested in the S&P 500 in 1965, dividends reinvested, would leave you with $2000 today.

$16 invested in Berkshire Hathaway in 1965, dividends reinvested, puts $163,000 in your pocket.

Unfriggin believable.  The man is truly one of a kind.


tooqk4u22

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Re: the sage of omaha and you
« Reply #3 on: May 07, 2013, 01:35:35 PM »
He is certainly a financial hero, but he is also a politcal policy hypocrite.....all driven by him being a financial hero. Democrats and republicans should despise him equally and shareholders should, and do, love him for his actions.

Mr Mark

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Re: the sage of omaha and you
« Reply #4 on: May 07, 2013, 03:55:21 PM »
I did admire how, in the depths of the crisis, he got those tremendous prefered stock deals from both Goldman's (aka vampire squid), and BoA. Nice. He git a premium just for the financial endorsement it brought with it.

Sweet.

Zaga

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Re: the sage of omaha and you
« Reply #5 on: May 07, 2013, 04:59:45 PM »
What should employees of the businesses he owns think?  Just curious of anyone's thoughts, the company I work for is being bought out soon by him and 3G.

tomsang

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Re: the sage of omaha and you
« Reply #6 on: May 07, 2013, 05:47:54 PM »
He is certainly a financial hero, but he is also a politcal policy hypocrite.....all driven by him being a financial hero. Democrats and republicans should despise him equally and shareholders should, and do, love him for his actions.

Can you elaborate on why he is a political policy hypocrite and why the politicians should hate him?

nktokyo

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Re: the sage of omaha and you
« Reply #7 on: May 07, 2013, 05:53:06 PM »
Ugh, politics.

tooqk4u22

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Re: the sage of omaha and you
« Reply #8 on: May 07, 2013, 07:16:46 PM »
He is certainly a financial hero, but he is also a politcal policy hypocrite.....all driven by him being a financial hero. Democrats and republicans should despise him equally and shareholders should, and do, love him for his actions.

Can you elaborate on why he is a political policy hypocrite and why the politicians should hate him?

Why...because now that he is knocking on deaths door he is compelled to preach about how the wealthy should pay more taxes on income , dividends, capital gains and estate taxes but meanwhile throughout his whole existence he paid very little taxes (on a relative/percentage basis) and made billions doing it (legally of course) but then nearing the end puts it all in charitable trusts to avoid estate taxes (btw he still controls it and has access to it).  (wahwahwah my secretary pays a higher tax rate than me so people like me but not me should pay more).  Oh yeah, he gave very little to charity throughout his life.  He argues he is a more efficient and better deployer of capital than charities, you or I (hence no dividends), or the government....the track record suggests this is true but it doesn't change the hypocrisy. 


But again I love him as an investor.

Nords

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Re: the sage of omaha and you
« Reply #9 on: May 07, 2013, 11:22:58 PM »
What should employees of the businesses he owns think?  Just curious of anyone's thoughts, the company I work for is being bought out soon by him and 3G.
Heh.  I grew up in 1960s Pittsburgh, and I still have a pickle pin from my kindergarten tour of the plant.

You shouldn't think any differently, because you'll likely never hear from him unless the CEO invites him to start pouring ketchup over everything he eats.  He's compared this "acquisition" to helping Mars buy out the Wrigley family business.  You never hear anything about Buffett or Berkshire Hathaway there either.

Berkshire Hathaway fueled our ER through the last decade and also sent our daughter to college.  No complaints.

tomsang

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Re: the sage of omaha and you
« Reply #10 on: May 08, 2013, 12:04:10 AM »

Why...because now that he is knocking on deaths door he is compelled to preach about how the wealthy should pay more taxes on income , dividends, capital gains and estate taxes but meanwhile throughout his whole existence he paid very little taxes (on a relative/percentage basis) and made billions doing it (legally of course) but then nearing the end puts it all in charitable trusts to avoid estate taxes (btw he still controls it and has access to it).  (wahwahwah my secretary pays a higher tax rate than me so people like me but not me should pay more).  Oh yeah, he gave very little to charity throughout his life.  He argues he is a more efficient and better deployer of capital than charities, you or I (hence no dividends), or the government....the track record suggests this is true but it doesn't change the hypocrisy. 

But again I love him as an investor.

I don't recall Buffett ever asking for lower taxes over the years and our current tax rates are at historic lows due to the Bush tax cuts. So I don't see him calling it as it is being hypocritical. As a CPA I had a number of wealthy clients shake their head when they lowered the capital gains rates for capital gains and dividends. They didn't understand the logic of giving a windfall to those that didn't need it. The whole secretary example is his way of asking should someone who works for their money pay more taxes as a percentage than someone who owns stocks. If anything America should be listening to people like him who understand how the game is played. The US has some of the lowest income taxes in the world while we are running deficits.

It is interesting that he is getting beat up by giving his money to charity, which in theory helps humanity vs. passing it on to twenty generations of Buffetts. To keep money moving, a larger estate tax would be beneficial. Use it or lose it. Donate it to charity or give it to the government, but it is not healthy to create policies that favor creating family dynasties.

tooqk4u22

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Re: the sage of omaha and you
« Reply #11 on: May 08, 2013, 11:03:09 AM »

Why...because now that he is knocking on deaths door he is compelled to preach about how the wealthy should pay more taxes on income , dividends, capital gains and estate taxes but meanwhile throughout his whole existence he paid very little taxes (on a relative/percentage basis) and made billions doing it (legally of course) but then nearing the end puts it all in charitable trusts to avoid estate taxes (btw he still controls it and has access to it).  (wahwahwah my secretary pays a higher tax rate than me so people like me but not me should pay more).  Oh yeah, he gave very little to charity throughout his life.  He argues he is a more efficient and better deployer of capital than charities, you or I (hence no dividends), or the government....the track record suggests this is true but it doesn't change the hypocrisy. 

But again I love him as an investor.

I don't recall Buffett ever asking for lower taxes over the years and our current tax rates are at historic lows due to the Bush tax cuts. So I don't see him calling it as it is being hypocritical. As a CPA I had a number of wealthy clients shake their head when they lowered the capital gains rates for capital gains and dividends. They didn't understand the logic of giving a windfall to those that didn't need it. The whole secretary example is his way of asking should someone who works for their money pay more taxes as a percentage than someone who owns stocks. If anything America should be listening to people like him who understand how the game is played. The US has some of the lowest income taxes in the world while we are running deficits.

It is interesting that he is getting beat up by giving his money to charity, which in theory helps humanity vs. passing it on to twenty generations of Buffetts. To keep money moving, a larger estate tax would be beneficial. Use it or lose it. Donate it to charity or give it to the government, but it is not healthy to create policies that favor creating family dynasties.

Your entitled to your view.  The fact of the matter is he managed his whole life and business to be as tax efficient as possible (again legally) and until recently (last few years or so) did not ever make any suggestions about the wealthy paying too little taxes and should pay more.

I am not bashing him for giving it charity, but that he is doing it to avoid the estate tax and also because he really hasn't given it to charity yet as he simply pledged to give it charity throught the charitable trusts he established. He gets credit for being this extremely charitable person but really wasn't along the way (btw - there are other discussions in this forum about whether it is better to give it along the way or work/invest to get the biggest stash possible and give it away later - I don't which is better but that is for a different discussion)

Personally, I think the estate tax is BS because it has already been taxed in many forms along the way and I don't have a problem with inheritances, which by the way still keeps money moving as subsquent generations typically squander it or invest it in new things - it is certainly better than going to the government.  Same goes for the earned income vs. investment income argument.  In short, I like the way he has managed his tax implications, I just don't like that when a person does something then asks something differently for everyone else - at best its disingenuous or hypicritical (but not immoral, illegal, etc).

Also the US has some of the lowest PERSONAL income tax rates but some of the highest CORPORATE tax rates.  We are not running deficits solely to tax policy, it is also because we spend heavily.  And some of these other countries with higher tax rates are either completely dysfunctional and still have massive deficits and no growth (can't spend and tax forever) or are fortunate enough to be resource rich with limited populations. 

GreenGuava

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Re: the sage of omaha and you
« Reply #12 on: May 09, 2013, 08:55:57 AM »
Larry Swedroe (principal of Buckingham Asset Management and a heavy hitter in the index investing world) makes the point "Buffett Faithful Idolize the Oracle Yet Ignore His Advice."

Yup.  Amazing how often I hear people defend a stock picking strategy they use as "what Warren Buffet does."  Often it's a deterministic strategy, too, which is its own can of worms.  As if - as Swedroe (who has written some great books, and writes some great articles regularly) points out - they are able to use the same leverage that Warren Buffet has when he makes a purchase.

tomsang

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Re: the sage of omaha and you
« Reply #13 on: May 09, 2013, 11:31:39 AM »
Your entitled to your view.  The fact of the matter is he managed his whole life and business to be as tax efficient as possible (again legally) and until recently (last few years or so) did not ever make any suggestions about the wealthy paying too little taxes and should pay more.

This is exactly why we should listen to a person like this.  He knows how unfair this system is to those who earn money vs. play with money. As you point out, he did it legally, but he sees the system as flawed. The major changes to the tax structure that transferred wealth to the rich was the Bush era tax cuts, so during most of his career the taxes for the wealthy were much higher. Prior to Bush tax rates were significantly higher and probably in his mind fairer to the wealthy and those striving to be wealthy

I am not bashing him for giving it charity, but that he is doing it to avoid the estate tax and also because he really hasn't given it to charity yet as he simply pledged to give it charity throught the charitable trusts he established. I think you need to check your facts on that as he has already given away over $9 billion and has pledged to give away like 99%.  I also don't think that he is doing it to avoid estate taxes, as you already pointed out he is willing to increase his tax rate if everyone is held to the same standard

He gets credit for being this extremely charitable person but really wasn't along the way (btw - there are other discussions in this forum about whether it is better to give it along the way or work/invest to get the biggest stash possible and give it away later - I don't which is better but that is for a different discussion).Bill Gates is accused of this as well.  They have both stated that at the point of time of founding and building their companies, they could not devote the proper attention to charitable giving.  Lots of people, including myself give because someone asked vs. taking the time to determine how money is going to be allocated to charity.  At the end of they year when I look at the charitable donations it is all over the board.  Buffett is giving the vast majority of his net worth to the Bill & Melinda Gates foundation with the stipulation that Bill and Melinda actively manage the foundation as he still doesn't have the time and skills to do charitable giving in a proper manner.

Personally, I think the estate tax is BS because it has already been taxed in many forms along the way and I don't have a problem with inheritances, which by the way still keeps money moving as subsquent generations typically squander it or invest it in new things - it is certainly better than going to the government.    This is factually incorrect.  Ask Rebelspy or anyone else who has significant real estate holdings how much income tax he pays on their rentals.  With depreciation, credits, and other preferences the vast majority of those that have created a business have not paid income taxes anywhere close to what a person working would have paid.  It is rare for those who are in Real Estate to pay income taxes of any significance, yet their net worth could be in the 10 to 100's of millions.  The estate tax has a $5 million exemption for a single and a $10 million for a couple, so don't talk about the small business down the street.  Bill Gates and Warren Buffett's shares are very close to being 100% capital gains as they have never been taxed at the individual level

Also the US has some of the lowest PERSONAL income tax rates but some of the highest CORPORATE tax rates.  We are not running deficits solely to tax policy, it is also because we spend heavily.  And some of these other countries with higher tax rates are either completely dysfunctional and still have massive deficits and no growth (can't spend and tax forever) or are fortunate enough to be resource rich with limited populations.


The effective rate of corporations is very low compared to other countries.  Again you can see that GE has paid virtually 0 tax in the past 10 years, yet has as a corporation has a 35% marginal tax rate.  http://thinkprogress.org/economy/2012/03/30/456005/reminder-corporate-taxes-very-low  Our top rates is never paid by our corporations.  There so many deductions, credits and incentives.

I don't hold him up as holy, but to discount him because, as you have emphasized, he has legally taken advantage of the tax system is a bit crazy.  Those that know how the system works, should be the ones that we are listening to as we come up with a fair tax system.  Gates and Buffett are not in the accumulation stages for their personal fortunes. They say and are acting on that they have too much, so they don't have a vested interest in screwing over the population to get a tax break. For those that chime in for them to write a check to the Treasury, you are missing the point that our tax system should not be an altruistic system.  It should be fair and consistent to all the players.  Right now he is pointing out that it is not fair to those that work and there is a huge windfall going to those who play with money for a living.   



tooqk4u22

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Re: the sage of omaha and you
« Reply #14 on: May 09, 2013, 12:00:19 PM »
Quote
This is exactly why we should listen to a person like this.  He knows how unfair this system is to those who earn money vs. play with money. As you point out, he did it legally, but he sees the system as flawed. The major changes to the tax structure that transferred wealth to the rich was the Bush era tax cuts, so during most of his career the taxes for the wealthy were much higher. Prior to Bush tax rates were significantly higher and probably in his mind fairer to the wealthy and those striving to be wealthy

Whether we should or shouldn't listen to him is not what I am, but you clearly are, debating.  My point is that he is disingenious or hypicrytical at best and his actions prove it.

Quote
Personally, I think the estate tax is BS because it has already been taxed in many forms along the way and I don't have a problem with inheritances, which by the way still keeps money moving as subsquent generations typically squander it or invest it in new things - it is certainly better than going to the government.    This is factually incorrect.  Ask Rebelspy or anyone else who has significant real estate holdings how much income tax he pays on their rentals.  With depreciation, credits, and other preferences the vast majority of those that have created a business have not paid income taxes anywhere close to what a person working would have paid.  It is rare for those who are in Real Estate to pay income taxes of any significance, yet their net worth could be in the 10 to 100's of millions.  The estate tax has a $5 million exemption for a single and a $10 million for a couple, so don't talk about the small business down the street.  Bill Gates and Warren Buffett's shares are very close to being 100% capital gains as they have never been taxed at the individual level


So in your mind real estate is the only investment option available, only super wealthy people do it, and creation of wealth by any other means (such as creating and growing a giant software company) is not possible.  Arebelspy - what is like to be in the same company as Warren Buffett- who by the way is not a real estate investor? 

But to your point, I do beleive there is a flaw in the tax code for real estate investments. 

Also, $9billion was relatively recently and a fraction of his worth and pledging is not the same as giving.   

Quote
The effective rate of corporations is very low compared to other countries.  Again you can see that GE has paid virtually 0 tax in the past 10 years, yet has as a corporation has a 35% marginal tax rate.  http://thinkprogress.org/economy/2012/03/30/456005/reminder-corporate-taxes-very-low  Our top rates is never paid by our corporations.  There so many deductions, credits and incentives.


I appreciate the link from what I can tell is an extremely biased site, but here is another that is based on the fed reserve and shows a higher rate. As for GE, they had a lot of losses too that help lowered the effective tax rate....just like all of the large banks and homebuilders and any other company that got really whacked during the financial crises...those losses were used to offset income in the last few years oh yeah and the rules were changed after the crisis to allow deductions/credits looking back so it resulted in massive tax refunds....stupid governement.


Quote
I don't hold him up as holy, but to discount him because, as you have emphasized, he has legally taken advantage of the tax system is a bit crazy.  Those that know how the system works, should be the ones that we are listening to as we come up with a fair tax system.  Gates and Buffett are not in the accumulation stages for their personal fortunes. They say and are acting on that they have too much, so they don't have a vested interest in screwing over the population to get a tax break. For those that chime in for them to write a check to the Treasury, you are missing the point that our tax system should not be an altruistic system.  It should be fair and consistent to all the players.  Right now he is pointing out that it is not fair to those that work and there is a huge windfall going to those who play with money for a living.
   

Doesn't need to be altruistic and "fair" is a subjective term.  Still the fact remains that he didn't make these arguments until relatively recently even though he has been a billionaire for far longer.

Clearly you want to make this a policy or liberal vs. conservative debate - I do not, but I have done that elsewhere.  This is about his actions vs. his words, words that are relatively recent.

unitsinc

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Re: the sage of omaha and you
« Reply #15 on: May 09, 2013, 01:50:37 PM »
Quote
This is exactly why we should listen to a person like this.  He knows how unfair this system is to those who earn money vs. play with money. As you point out, he did it legally, but he sees the system as flawed. The major changes to the tax structure that transferred wealth to the rich was the Bush era tax cuts, so during most of his career the taxes for the wealthy were much higher. Prior to Bush tax rates were significantly higher and probably in his mind fairer to the wealthy and those striving to be wealthy

Whether we should or shouldn't listen to him is not what I am, but you clearly are, debating.  My point is that he is disingenious or hypicrytical at best and his actions prove it.

Doesn't need to be altruistic and "fair" is a subjective term.  Still the fact remains that he didn't make these arguments until relatively recently even though he has been a billionaire for far longer.


Just to take these two comments, I would like to point out that I can agree he may be a bit hypocritical now, but his past actions are done and over with.

Lobbying for something that many people think are good, is good. Whether you are rich or poor, good or bad, doing something good(I understand not everyone agrees, I'm just saying good for arguments sake) is good in and of itself.

Besides, no one is all good or all bad.

MLK was supposedly a huge womanizer, but he did many good things.

tooqk4u22

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Re: the sage of omaha and you
« Reply #16 on: May 09, 2013, 07:09:45 PM »
so if I rape, pillage and steal to get what ever I need to get, it is ok as long as in the end I denounce raping, pillaging, and stealing.  Good to know that is the standard. Kudos to you for setting the bar so high.

I get what you are saying, but I personally don't give it much weight when it happens near the end after one has benefited so dearly for so long. 

daverobev

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Re: the sage of omaha and you
« Reply #17 on: May 09, 2013, 07:43:21 PM »
so if I rape, pillage and steal to get what ever I need to get, it is ok as long as in the end I denounce raping, pillaging, and stealing.  Good to know that is the standard. Kudos to you for setting the bar so high.

I get what you are saying, but I personally don't give it much weight when it happens near the end after one has benefited so dearly for so long.

Define 'benefited'. He's lived in the same house for decades, drives normal cars, etc, etc. I hardly think he's... Silvio Berluscone who has, less metaphorically, raped and pillaged. I'd say WB has been a 'force for good'. I read his autobiography - very interesting.

He is also unlikely to sabotage his own companies by making them pay more tax than his competitors; he would be sued by his shareholders, I'm sure. You can say 'this is a stupid system' while still being part of that system (eg, first past the post elections - they are STUPID but I'd still vote if I wasn't a permanent resident who can't!)

Grigory

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Re: the sage of omaha and you
« Reply #18 on: May 09, 2013, 10:26:49 PM »
Did any other Mustachians go to this year's shareholder meeting in Omaha? (It was last weekend.) It was my 6th time going, and while there wasn't any groundbreaking information, some of the subtler points were pretty amusing. I posted my notes from the convention on my site.

And yes, a lot of his shareholders (especially the B-share commoners) ignore his advice when it comes to investing and money in general. Every year thousands of people spend millions at his jewelry store. Shiny trinkets don't exactly strike me as great investments...

tooqk4u22

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Re: the sage of omaha and you
« Reply #19 on: May 10, 2013, 02:13:11 PM »
so if I rape, pillage and steal to get what ever I need to get, it is ok as long as in the end I denounce raping, pillaging, and stealing.  Good to know that is the standard. Kudos to you for setting the bar so high.

I get what you are saying, but I personally don't give it much weight when it happens near the end after one has benefited so dearly for so long.

Define 'benefited'. He's lived in the same house for decades, drives normal cars, etc, etc. I hardly think he's... Silvio Berluscone who has, less metaphorically, raped and pillaged. I'd say WB has been a 'force for good'. I read his autobiography - very interesting.

He is also unlikely to sabotage his own companies by making them pay more tax than his competitors; he would be sued by his shareholders, I'm sure. You can say 'this is a stupid system' while still being part of that system (eg, first past the post elections - they are STUPID but I'd still vote if I wasn't a permanent resident who can't!)
[/quote

What I said above is a metaphor and not me saying he did bad things.....read above in my multilple comments, I am a fan of Buffett's business and investment practices.  My comment was just a comparison to what the prior posters were saying that it is fine that he didn't espouse tax policy fairness or wasn't real charitable throughout his life as long as he figured it out and acknowledged it sometime.  I disagree....the end does not justify the means. 

As for "benefited" what about those billions. And living in the same house, you do realize he has other houses.  Sure he is not as lavish as his wealth would permit but that doesn't mean he hasn't benefited.

daverobev

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Re: the sage of omaha and you
« Reply #20 on: May 10, 2013, 02:38:11 PM »
so if I rape, pillage and steal to get what ever I need to get, it is ok as long as in the end I denounce raping, pillaging, and stealing.  Good to know that is the standard. Kudos to you for setting the bar so high.

I get what you are saying, but I personally don't give it much weight when it happens near the end after one has benefited so dearly for so long.

Define 'benefited'. He's lived in the same house for decades, drives normal cars, etc, etc. I hardly think he's... Silvio Berluscone who has, less metaphorically, raped and pillaged. I'd say WB has been a 'force for good'. I read his autobiography - very interesting.

He is also unlikely to sabotage his own companies by making them pay more tax than his competitors; he would be sued by his shareholders, I'm sure. You can say 'this is a stupid system' while still being part of that system (eg, first past the post elections - they are STUPID but I'd still vote if I wasn't a permanent resident who can't!)

What I said above is a metaphor and not me saying he did bad things.....read above in my multilple comments, I am a fan of Buffett's business and investment practices.  My comment was just a comparison to what the prior posters were saying that it is fine that he didn't espouse tax policy fairness or wasn't real charitable throughout his life as long as he figured it out and acknowledged it sometime.  I disagree....the end does not justify the means. 

As for "benefited" what about those billions. And living in the same house, you do realize he has other houses.  Sure he is not as lavish as his wealth would permit but that doesn't mean he hasn't benefited.

There are lots of things I don't like, but I don't get up on a soapbox. I haven't (yet) run for office, I haven't championed anything much. Does that make me a hypocrite?

unitsinc

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Re: the sage of omaha and you
« Reply #21 on: May 10, 2013, 02:57:11 PM »
so if I rape, pillage and steal to get what ever I need to get, it is ok as long as in the end I denounce raping, pillaging, and stealing.  Good to know that is the standard. Kudos to you for setting the bar so high.

I get what you are saying, but I personally don't give it much weight when it happens near the end after one has benefited so dearly for so long.

Well, all that is illegal, so he'd likely be in jail. Buffet simply followed the laws and made his money. Granted, he may have done so in a douchey/morally questionable manor, and his change of heart at his old age may be a bit insincere, but it still seems like a good step.

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Re: the sage of omaha and you
« Reply #22 on: May 10, 2013, 08:09:22 PM »
Being tax efficient is smart. You can still disagree with the policy. He has been pushing various equality tax things for over 10+ years now (since Arnold ran for governor).  Personally i am not up for business guys getting involved in political discussion. They tend to be about as informed as actors...

The whole multiple taxation things is a load of crap. Income is double taxed left and right. And a huge chunk of the fortunes have never been taxed (i.e. What percentage of WB net worth is in untaxed capital gains).  I tend to lead toward just treating it as ordinary income on the recipients behalf. Give like a 500k deduction per person and  be done with it. Besides taxing something results in less of something. Should a death tax reduce the amount of death?:)

Now the Saint Buffet myth is a bit overstated. Yes he lives in the same omaha house. But he also picked up a couple of multimillion dollar beach front CA houses to go with it.


Why...because now that he is knocking on deaths door he is compelled to preach about how the wealthy should pay more taxes on income , dividends, capital gains and estate taxes but meanwhile throughout his whole existence he paid very little taxes (on a relative/percentage basis) and made billions doing it (legally of course) but then nearing the end puts it all in charitable trusts to avoid estate taxes (btw he still controls it and has access to it).  (wahwahwah my secretary pays a higher tax rate than me so people like me but not me should pay more).  Oh yeah, he gave very little to charity throughout his life.  He argues he is a more efficient and better deployer of capital than charities, you or I (hence no dividends), or the government....the track record suggests this is true but it doesn't change the hypocrisy. 

But again I love him as an investor.

I don't recall Buffett ever asking for lower taxes over the years and our current tax rates are at historic lows due to the Bush tax cuts. So I don't see him calling it as it is being hypocritical. As a CPA I had a number of wealthy clients shake their head when they lowered the capital gains rates for capital gains and dividends. They didn't understand the logic of giving a windfall to those that didn't need it. The whole secretary example is his way of asking should someone who works for their money pay more taxes as a percentage than someone who owns stocks. If anything America should be listening to people like him who understand how the game is played. The US has some of the lowest income taxes in the world while we are running deficits.

It is interesting that he is getting beat up by giving his money to charity, which in theory helps humanity vs. passing it on to twenty generations of Buffetts. To keep money moving, a larger estate tax would be beneficial. Use it or lose it. Donate it to charity or give it to the government, but it is not healthy to create policies that favor creating family dynasties.

Your entitled to your view.  The fact of the matter is he managed his whole life and business to be as tax efficient as possible (again legally) and until recently (last few years or so) did not ever make any suggestions about the wealthy paying too little taxes and should pay more.

I am not bashing him for giving it charity, but that he is doing it to avoid the estate tax and also because he really hasn't given it to charity yet as he simply pledged to give it charity throught the charitable trusts he established. He gets credit for being this extremely charitable person but really wasn't along the way (btw - there are other discussions in this forum about whether it is better to give it along the way or work/invest to get the biggest stash possible and give it away later - I don't which is better but that is for a different discussion)

Personally, I think the estate tax is BS because it has already been taxed in many forms along the way and I don't have a problem with inheritances, which by the way still keeps money moving as subsquent generations typically squander it or invest it in new things - it is certainly better than going to the government.  Same goes for the earned income vs. investment income argument.  In short, I like the way he has managed his tax implications, I just don't like that when a person does something then asks something differently for everyone else - at best its disingenuous or hypicritical (but not immoral, illegal, etc).

Also the US has some of the lowest PERSONAL income tax rates but some of the highest CORPORATE tax rates.  We are not running deficits solely to tax policy, it is also because we spend heavily.  And some of these other countries with higher tax rates are either completely dysfunctional and still have massive deficits and no growth (can't spend and tax forever) or are fortunate enough to be resource rich with limited populations.

Nords

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Re: the sage of omaha and you
« Reply #23 on: May 11, 2013, 08:16:14 PM »
Did any other Mustachians go to this year's shareholder meeting in Omaha? (It was last weekend.) It was my 6th time going, and while there wasn't any groundbreaking information, some of the subtler points were pretty amusing. I posted my notes from the convention on my site.
Thanks.  I don't enjoy flocking with the crowds, but I enjoyed reading your comments.

I've been wondering if he's ever going to get over Alice Schroeder's insights.  She'd even been warned about the phenomenon by several other biographers, so she wasn't too surprised.  It's all Buffett's fault for cutting off contact like that.