Warren Buffett: misleading Argument, left out the effect of corporate income tax

http://www.forbes.com/sites/timworstall/2011/08/15/warren-buffetts-very-strange-tax-argument/

by bakbak • 15 years ago

8 10 15 years ago

_delirium• 15 years ago

I'm not sure that you can assume that corporate tax revenues, if not taxed and left with the corporation, would all accrue to shareholders in dividends or dividend-equivalents. In an idealized setting that's true, but I'd be surprised if empirically there wasn't more interaction of variables, with some of the revenues accruing to other parties, like management or other employees, due to effects such as: cash-flush corporations tend to pay higher salaries and spend more money on perks.

In other words, this article claims that two situations have equivalent effects for shareholders:

1. Corporate tax rate of 35%, and dividend tax rate of 15%

2. Corporate tax rate of 0%, and dividend tax rate of 50%

But I am not at all sure that that's the case in practice, i.e. that empirically if we changed from #1 to #2, it'd make no difference.

babebridou• 15 years ago

> Just send a check to: Gifts to the United States U.S.

I'm far (very far) from an expert, but wouldn't that be somewhat dangerous or akin to corruption to an extent? Could the balance of the US be saved with gifts from a few super rich people without anyone raising an eyebrow...?

megaman821• 15 years ago

This article is even more disingenuous than Warren Buffet's article. Entire departments exists in companies to minimize their taxable income.

ahi• 15 years ago

Clearly, corporate income would go to the employees' wages, so the corporate income tax is a double taxation of employees' wages not Mr. Moneybags' dividends. </eyeroll>

I am embarrassed for writers that make these arguments. They are so clearly ideologically driven I imagine there must be a brothel for op-ed whores somewhere on Wall St.

BSeward• 15 years ago

Warren Buffett's argument was "anecdotally the über-rich wouldn't mind paying more and (demonstratively?) won't invest in US markets in markedly different ways". That other sundry taxes are out there doesn't seem like it matters in that context.

MarkMc• 15 years ago

Warren Buffet makes two separate arguments in favor of raising taxes on the very rich:

1. Anecdotally the über-rich wouldn't mind paying more and won't invest in US markets in markedly different ways

2. The über-rich aren't paying their fair share of taxes because their tax percentage is much smaller than everyone else.

The first point is a good one, but it's the second point that the Forbes article is criticising - and to my mind rightly so. Why shouldn't you include corporate income tax and sales tax when it comes to calculating a person's tax percentage? I'd love to hear Warren Buffett's response to this criticism.

beefman• 15 years ago

(from a different source)

"Becky: OK, there were a couple of emails that came in that people that said if you think the government should be able to tax more money, why don't you just give your money to the government instead of charity?

Buffett: Well, that's a choice and it's an option that... If I had to give it to a single individual - make some young Buffett a multi-billionaire - or give it to the government, I'd absolutely give it to the government. I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations, will do a better job with lower administrative costs and better selection of beneficiaries than the government."

So, Buffett and his children should have the option of deciding how their money is best spent, but other "individuals" should not?

yonran2• 15 years ago

If a player of a game says that the rules should be fixed, shouldn't the fact that he happens to be the _best_ player make him more credible rather than less so?

waterlesscloud• 15 years ago

Personally it makes me start looking for how he'd benefit.

If he's that good a game player, he's probably playing a game when he says these things.

Warren Buffett: misleading Argument, left out the effect of corporate income tax

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