Buffett: Criticism is 'ridiculous'

[Omaha Steve]

http://www.omaha.com/article/20120127/NEWS01/301279949#buffett-criticism-is-ridiculous

By Steve Jordon

Warren Buffett's secretary, after being pointed out on national television during Tuesday's State of the Union speech, now is facing criticism over her salary and second home.

Debbie Bosanek and her boss both declined Thursday to disclose how much she's paid, saying it's private.

In an interview with The World-Herald, Buffett also said none of the online guesses about Bosanek's salary is right, and the critics are missing his point.

"I'm saying she is being treated unfairly in the tax code, as are tens of millions of others, compared to me," Buffett said. "They shouldn't change the rates on all the other people. They should change mine."

Photo: http://www.omaha.com/apps/pbcsi.dll/bilde?Site=OW&Date=20120127&Category=NEWS01&ArtNo=301279949&Ref=AR&maxw=490&maxh=275
Debbie Bosanek, left, said she's not complaining about her Berkshire salary or her taxes. She is shown with Laurene Powell Jobs, widow of Apple Inc. co-founder Steve Jobs, at Tuesday night's State of the Union address.

FULL story at link.

[ProfessionalLeftist]

1. He's right, it is ridiculous. A deliberate (attempt at) distraction

from the point, which is that no matter what her salary, she should not be paying a higher percentage of her salary in taxes than him. I don't think they're missing the point. I think they're deliberately trying to use her salary as an attempt to distract from it.

Typical.

[Overseas]

7. +1

[Uncle Joe]

16. I agree, ProfessionalLeftist, they're not missing the point, it's deliberate obfuscation,

and yes it is typical.

[Beartracks]

23. I agree. It's the usual attempt to imply...

... that just because someone is well-off, they don't have any right to complain about how much taxes are paid by those much more well-off than they are.

If I pulled down $200,000 a year, people would think I should just shut up about how little the millionaires are paying in taxes. Why? Because MOST workers still make less than me. However, this debate about taxes is not relative. INCOME might be relative, but TAXES aren't. And Buffett and Gates et al are correct in making the case that their taxes should be higher.

=========================

[barbtries]

2. well really.

how dare a secretary have a second home. i never.

[BlueToTheBone]

10. She shouldn't even have indoor plumbing!

All women should be in the kitchen or on their backs! of course....

A woman's place is in the House and the Senate and the White House and the Courts.

Women need secretaries and wives too! Let's boycott until we get them!

[liberal N proud]

3. Right wing hack job trying to divert the focus away from their poster boy Mittens

[AlbertCat]

4. Buffett: Criticism is 'ridiculous'

People with brains: GOP is "ridiculous"

[exboyfil]

5. Lots of not very rich people have 2nd homes

My former pastor and his wife (a teacher) have a cabin, and they are far from being "rich". They have been prudent and gave up other things like vacations to make this purchase. It works for their family.

An executive secretary for someone of Buffet's wealth probaby pulls down six figures. Her husband probably $50K or so. A combined income of $150K? Probably $20K in deductions? Kid too old to qualify for child credit but perhaps College credits??? Not included in analysis.

All $150K subject to S.S./Medicare (really should include both sides as well since anything over minimum wage represents a negotiated value of your services to your employer).

$150,000
-$20,000 deductions
-$3,800*3 (exemption)
=$118,600
Yields $21,900 in Federal taxes (14.6% of income)

Full S.S./Medicare withholding rate (6.2%+1.45%)
=$11,475 (7.65% of income)

Employers share =$11,475 (7.65% of income)

Total Federal tax burden of ($44,850) 29.9%

Lets say her husband made $100K instead

Federal Income tax of $35,273
S.S./Medicare of $15,300/$15,300
Total Federal taxes of $65,873 (32.9% of income)

Lets say she makes the additional $50 and not her husband
Federal income tax of $35,273
S.S./Medicare of $11,858/$11,858
Total Federal taxes of $58,988 (29.5% of income)

Note the impact on the cap on Social Security. It is unjust even at the lowest levels of exempted income.

[obamanut2012]

6. A friend's parent have a second home

At a small, non-touristy beach.

She was a regular secretary for the USDA, and he was a factory worker. They are not rich people, but lived within their means, and my friend was able to get a full scholarship to college. They kept cars for 10-15 years and didn't buy alot of lavish things, and now have a paid-for house, and a nice little house at the beach with a very small mortgage.

[MADem]

9. I have one--it cost me less than a new car.

It was a wreck, I've been slowly fixing it up for years. It's pretty nice now, for what it is (a 2 br. cottage). Nothing fancy, though, very low taxes, and not in a touristy area, but very rural, which I like. You don't have to be rich to have a 'spare' house if the house isn't in a wealthy area.

[hfojvt]

13. why do you think 50K or 100K are somehow normal?

and 100K - that is a sh*tload of money. Mega-beaucoup.

Here, again, are the income levels for each group.

top 1% - over $388,806, average $1,320,289
next 4% - over $153,542, average $218,434
next 5% - over $108,904, average $127,532
next 15% - over $64,702, average $87,147
next 25% - over $30,563, average $46,265
bottom 50% - less than $30,563, average $14,979

Check that out, 75% of taxpayers make less than $64,702, 50% make less than $30,563, and yet you think that 100K and 50K are somehow normal. If that couple makes over $160,000 they are in the top 5%. If they make over $110,000 they are in the top 10%. That's pretty rarified company.

As for the cap on social security, it seems like most people miss the point. One year I had a windfall gain on real estate, made 20K (which is pocket change, I guess in your 150K world, but for me it was lots and lots of money). I paid zero FICA taxes on that. FICA taxes are only on wages. So landlords do not pay FICA on their rental income. Savers don't pay FICA on their interest income, and investors don't pay FICA on their dividends and capital gains income. Buffet doesn't pay FICA taxes on his income even below the cap. FICA taxes are only on wages.

Except the new health care reform law will soon charge medicare taxes on all income. Which means I will pay another 2.9% even on my interest income of $300. Oh look, it's ANOTHER tax increase on somebody making far, far less than $250,000 a year.

[MH1]

14. can you provide an authoritative link

for those income level to per cent correlations?

not doubting your numbers, want to file that away for future reference.

[hfojvt]

18. trust but verify, it's the scientific way

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html

IRS tax stats tables 5 and 6.

I created a sort of reference link here for tax data http://journals.democraticunderground.com/hfojvt/169

although I personally muffed my first attempt with a computation error - which I did find and correct (but mistakes can be made and not caught too).

[RUMMYisFROSTED]

26. A point that always needs to be made:

Every member of Congress is in the top 5%.

[MH1]

15. one factor is length of time in the workforce.

in your numbers, what per cent of workers has been working less than 5 years? less than 10 years? in either case, they are still well below their ultimate earning potential.

of those who have been working more than 20 years, what do the numbers look like?

100K is whole lot closer to 'normal' for people who have been working 20 years, and especially if you consider only those with 4 year degree or better. If you include kids in their first few years of work, sure that's going to skew the numbers quite a bit to the low end.

That doesn't invalidate your other points, but consider that most people subconsciously speak from their own frame of reference. I wouldn't consider 100K 'normal' but it's not so far-fetched as you make it sound ... for an older worker with a college degree (or more) and professional experience.

And before you complain about including college education as a factor, I know a bunch of 30+ people without college who demonstrably only have themselves to blame. (Yes there is a broad swath of whom that can't be said. But a shitload of whom it is quite accurate. And then they want to know why their jobs suck. Well, some of them do. Some of them have actually figured it out, finally.)

[hfojvt]

20. I am almost fifty and have two college degrees

Just got promoted, nearly doubling my pay - to a whole $31,000 a year.

We just hired another part time janitor, a 40 year old with an engineering degree.

100K is not that normal, even for people who have been working for 20 years and even for many, many people who have useless college degrees.

And those twenty year olds, with no college? They pay taxes and vote too.

Let's not pretend that some people are not gonna spend their whole life in the bottom 40%, because studies show that they will.

[exboyfil]

17. I am not sure I understand your point

I never said the income levels represented were normal. It was my guess about the executive secretary's family income. I also wanted to show how it was different whether the $200K was mostly made by one individual earning income over the cap versus two earning income just up to the cap.

Granted these considerations do not impact most families, but if you consider that I am proposing lifting the cap on all income and reducing the rates by the percentage to make the change revenue neutral. Actually I would reduce the percentage taken on income over the cap to reflect them not getting anything back from S.S. for being taxed on the extra income. Right now those making over $55K/yr get very little contribution from the extra income towards S.S. benefits (formula is 90%/32%/15% on incomes of $0-9204/$9204-$55,488/$55,488-$106,800).

That reduction is real money in individual's pockets. I would link it to a proposal to raise the minimum wage by the percentage the employer's S.S. contribution was reduced. That way you can get a minimum wage increase in without having to fight the argument that it will cost jobs. It would be revenue neutral to employers.

If you want to talk about a family of four making about $42,600 thier federal tax is zero while there S.S./Medicare is 7.65%/7.65% (combined 15.3%). $6518 in taxes

Family of two with $42,600 income
$3115 in federal income tax (7.3%)
$6518 in social security (15.3%)
Total taxes of $9633 (22.6%) effective tax rate

As far as windfall income being exempt from S.S. taxes. I really do not understand your point. Everyone needs to contribute to supporting the S.S. program (I would even entertain the suggestion of S.S. taxes on all income). Every individual's circumstances are different, but we have a huge notch in our tax structure right now with S.S. being capped. It is not fair.

[66 dmhlt]

8. Wingnuts trying to claim it's "Envy"? Ridiculous!

Warren Buffett doesn’t envy the rich.
Bill Gates doesn’t envy the rich.
And they BOTH believe their current taxes allow them to escape from paying their fair share.

[Kolesar]

11. She was at Obama's speech, so they should call her late at night and picket her house

I mean, Democrat are evil, are they not? /sarcasm

[stockholmer]

12. Debbie Bosanek & her boss both declined Thursday to disclose how much she's paid,saying it's private

Last edited Fri Jan 27, 2012, 12:47 PM - Edit history (1)

Sorry, not anymore its not.

Plus, Buffett is pure oliogarchic scum, so sick of poeple calling him a hero:

Do 'hero's' do things like this?


Buffett – trading on inside information – steals $3.7 billion from the American taxpayer.

http://www.bloomberg.com/news/2011-03-18/buffett-generates-3-7-billion-from-goldman-investment-made-during-crisis.html

"Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) has made about $3.7 billion, including paper profits, from its $5 billion investment in Goldman Sachs Group Inc. (GS) at the depths of the financial crisis in 2008.

Goldman Sachs today said it will pay $5.65 billion to redeem preferred stock it sold to Berkshire. The price includes the original investment, plus a 10 percent premium and first- quarter dividend. Berkshire still holds warrants to buy $5 billion of the New York-based bank’s common stock with a strike price of $115 per share, which have generated a paper profit of more than $1.9 billion, data compiled by Bloomberg show.

Buffett invested in Goldman Sachs following the collapse of rival securities firm Lehman Brothers Holdings Inc. Under terms of the deal, Omaha, Nebraska-based Berkshire collected a $500 million annual dividend on the preferred stake. Goldman Sachs closed at $159.96 today on the New York Stock Exchange, compared with $84.39 at the end of 2008..................................."


-------------------------------------------------------------------------------------------------------------------

key quote "Goldman Sachs’s redemptions are “unwelcome,” Buffett said Feb. 26 in his annual letter to shareholders. “After they occur, our earning power will be significantly reduced"

In other words, Buffett wants to keep his hand further in the Goldman Sachs till, as they continue to financially rape and pillage.

flashback video

Charlie Munger (Buffett's long time Berkshire partner), tells the US people that "Thank God that bank bailouts came before handouts" to them and that the Americans need to just "Suck it up and cope"

---------------------------------------------------------------------------------------------------------------------------

What bailouts you might ask? The $700 billion in Tarp? No no no, how does over $23.7 TRILLION (much to foreign banks) sound?

U.S. Rescue May Reach $23.7 Trillion, Barofsky Says (article from 2009)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aY0tX8UysIaM

------------------------------------------------------------------------------------------------------
Now, many said that this figure would NEVER come into play, that at most the totals would be another 700 billion (similar to TARP).

well.......................................... HELLO:

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

Senator Bernie Sanders: The FedRes Audit – “U.S. Provided a Whopping $16 Trillion in Secret Loans To Bail Out US And Foreign Banks”

http://sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

(go to page 144, 3 of the Buffett-related banks, Wachovia, Goldman Sachs and Wells Fargo, got over $1.1 TRILLION in guarantees and zero or near zero interest loans)

and this

another disclosure, different from Bernie Sanders' audit

http://www.theatlantic.com/business/archive/2011/08/the-feds-secret-12-trillion-bailout-of-wall-street/243938


Wall Street Aristocracy Got $1.2 Trillion in Fed’s Secret Loans

http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html

Goldman Sach's (whilst Buffett was a significant share holder (see above), got around $70 Billion in bailouts and loans, Wells Fargo, another $45 Billion, and Wachovia got $50 Billion. That is another 165 billion to Buffett-related banks.


Between just these 2 Federal Reserve disclosures, 3 of the Buffet-related, partially or majority Buffett-directed received almost $1.3 TRILLION in secret bailouts, guarantees, and zero or near zero loans (which they turned around and leveraged out for billions in skimmed profits.)
-------------------------------------------------------------------------------------------------------------------

Buffet and Drug Laundering Money:


Wachovia (now Wells Fargo under Warren Buffett) laundered $378.4 BILLION in drug cartel money, yet paid a fine of only $160 million.

That is equal to laundering a million, and paying a 423 dollar fine. A speeding ticket is more than that in certain cities. Buffett was completely involved in the negotiations to lower the fines.

http://www.nakedcapitalism.com/2011/04/wachovia-paid-trivial-fine-for-nearly-400-billion-of-drug-related-money-laundering.html


-----------------------------------------------------------------------------------------------------------------

Buffett and the Mortgage Fraud Class Action Lawsuit (Buffett now has massive shares in 2 Huge Banks, Wells Fargo and Bank of America that are squarely in Schneiderman's Target Zone):

Buffett Is Betting Against Eric Schneiderman

http://www.thestreet.com/story/11231295/1/buffett-is-betting-against-eric-schneiderman.html

Perhaps. But, if so, the next time banks get government help won't go down like it did last time.

Warren Buffett announced Thursday he will take a stake in Bank of America, paying $5 billion for 50,000 cumulative preferred shares, each with a liquidation value of $100,000.

This investment has already raised red flags in the investment community, with the announcement coming days after Bank of America CEO Brian Moynihan vehemently denying that the bank needed capital. Also, the terms of the deal -- specifically the outsized dividend -- have led at least one prominent analyst to declare: "There's no way the bank can make money." http://www.thestreet.com/story/11230870/1/buffett-to-invest-5-billion-in-bank-of-america.html

So what exactly are Bank of America(BAC_) and Warren Buffett up to?

They're betting against New York Attorney General Eric Schneiderman.

Schneiderman is investigating the foreclosure practices of major banks; http://www.legalnewsline.com/news/233633-schneiderman-removed-from-mortgage-deal-committee opposing any mortgage/foreclosure settlement that gives banks a release from criminal investigations in exchange for civil fines.

In this sense, he's a lone wolf, getting booted from multi-state mortgage-settlement talks http://www.thestreet.com/story/11229482/1/new-york-ag-booted-from-mortgage-talks.html while facing pressure from the Obama administration to accept "blood money" in exchange for banker immunity. http://www.thestreet.com/story/11226640/1/obama-wants-schneiderman-to-back-off-banks-report.htmlThe proposed settlement of $20 billion would protect mortgage servicers such Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally Financial from further mortgage investigations. For perspective, the laughably small settlement is less than a single year's Wall Street bonus pool.

clip
-----------------------------------------------

my thoughts

The $20 billion settlement is is actually 7 and a half times less than Wall street paid itself in bonuses for just 2010.($150 billion)

http://moneywatch.bnet.com/economic-news/video/wall-street-bonuses-150-billion/383180

Buffett despises a true investigators like Schneiderman, and actively worked, along with the other bankster oligarchs behind the scenes to pressure his removal.

Furthermore, Buffett, per the terms of his $5 billion investment in Bank of America, gets paid back before ANYONE else, even the US government, in the event of BOA's demise.

------------------------------------------------------------------------------------------------------

Buffett also played his typical disinfo campaign in regards to the rating agencies (talking trash about them, but reaping huge profits through his large holdings in Moody's, as they blatantly mis-rated mortgages in the sub-prime debacle)


http://www.ourfuture.org/blog-entry/2010062202/warren-buffett-rating-agencies-and-corruption

-------------------------------------------------------------------------------------------
Buffett and derivatives:

Let’s Hold Benedict Arnold Billionaire Warren Buffett Accountable

http://www.alternet.org/story/146795/let%C3%A2%E2%82%AC%E2%84%A2s_hold_benedict_arnold_billionaire_warren_buffett_accountable

----------------------------------------------------------------------------------------------------


Lastly, let me turn to Buffett and his widely played remarks calling for higher taxes on the rich for capital gains and dividends.

Buffett owns HUGE shares in companies, he cannot easily pull out of a stock without destroying its market value. He also is known for long term holding, and reaping huge profits, and if his companies get in trouble, he goes running to the government to bail him out.

So, what better to ensure a stock's price than raising the penalty on ALL OTHERS for pulling out by taxing that capital gain at a much higher rate. He is actually calling for the government to force people to stay in stocks much longer than they would have, due to tax penalties. Meanwhile, he completely benefits, as this captive group of investors now is much less likely to abandon the firms that he holds huge shares in. Meanwhile Buffett and his fellow ilk will use ultra-complicated (and previously illegal) accounting methods to offset the increase in taxes he would have paid via losses that he will say he incurred.
I completely agree the truly rich should pay more, as the US tax system is designed to smash small and medium sized firms, whilst the big multinationals, who basically wrote the tax code through lobbyist pressure, pay next to nothing. But Warren Buffett's plans are a sham, a scheme, and also will hurt, once again the small investor and small businesses, who employ 70% of all Americans.


--------------------------------------------

If Warren Buffett, (a billionaire who has consistently used his privileged position to suckle off a bastardized version of crony capitalism which has morphed into corporate fascism through its confluences with the deepest cores of state power) is a 'hero', then........... HOW LOW the thresholds for the heroes of our age have fallen..........

[certainot]

19. limbaugh attacked her- calling for her to release her taxes

that's enough to get the entire tea party on it.

[guitar man]

21. Hell I'm poor

And I have a second home, here it is

[DallasNE]

24. Everything Lines Up Pretty Well, I Would Say

A two income household earning around $125,000 (her 70k, him 55k) would be able to own the homes they have and pay federal taxes at the rate listed, so what's the beef.

Plus, it was pretty predictable that the right wing would come after Debbie Bosanek, with stupid claims -- even envy, if I may quote Romney. It is how they operate, without failure. Every time.

[WHEN CRABS ROAR]

25. The critics aren't missing the point. They want the point to go away.

Can't have the 99% to raise up now, can we?

[24601]

27. No, it's that until you start to see numbers, most people don't intuitively think of a secretary

as being in the top 10%. But his secretary's salary beats most others, including the Secretaries of State, Treasury and Defense, or any other cabinet member.

Additionally, in business, a person's salary is pre-profit and is a deductible business expense. If a company goes under, pay already earned (rightfully) paid before stockholders.

But when Warren tells of his 15% rate, he often leaves out that the same money was previously taxed at 35%, for a total tax rate on those funds of 50%.

Nor does the employee have an investment at risk. The investor, on the other hand, has his/her investment at risk and don't even recoup what they put in if the company goes under. Of course, this provision doesn't apply for those "special" deals leaving the taxpayer on the hook.