Exploring the Not-So-Altruistic Aspects of the "Buffett Rule"

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Exploring the Not-So-Altruistic Aspects of the "Buffett Rule"

Robert Ross, Junior Analyst


February 17, 2012 5:05pm GMT

By Robert Ross, Casey Research

This week, President Obama released his $3.8-trillion budget for fiscal year 2013. The plan calls for new taxes on the wealthy, a restructuring of the tax code, and short-term infrastructure spending aimed at boosting the economy (albeit artificially).

Also included in the budget are limitations on subsidies for oil and gas companies, an end to the Bush tax cuts, and a proposal to raise taxes on dividends, which could be as high as 39.6% for households making over $250,000 per year.

Although Senate Minority Leader Mitch McConnell (R-KY) dismissed the proposal as "a campaign document," the White House claims the measure would generate $206 billion in revenue over 10 years.

One of the most interesting aspects of the plan is the inclusion of the Buffett Rule as a replacement for the alternative-minimum tax (AMT).

The AMT was originally implemented to ensure that high-income Americans paid their taxes. But, alas, the geniuses in Washington "forgot" to index the AMT for inflation, rendering it useless and unintentionally ensnaring an increasing number of middle-class taxpayers into a system meant for the wealthiest of Americans.

Unintended consequences abound, but I digress…

The "Buffett Rule," named after famed investor Warren Buffett, would require those who earn more than $1 million per year to pay a tax rate of at least 30% and prevent them from claiming deductions to push down their tax rates.

Buffett, who penned a New York Times op-ed in August of last year espousing the need for an overhaul of the tax code for America's top earners, appears to have caught the ear of President Obama.


(Click on image to enlarge)

The message of the op-ed was clear: Mr. Buffett, who paid nearly $7 million in income tax last year, wants to pay more.
But will he actually sacrifice anything? It's hard to say, as some of these new taxes will directly benefit Buffett.

Additional tax dollars in the government's coffers could help Buffett even more. Who can forget the Oracle of Omaha's opportunistic investment in Goldman Sachs (NYSE: GS) in the wake of the Lehman Brothers collapse (where he made nearly $1 billion on the assumption that the government would bail it out)? Buffett has indicated that his next acquisition could be Exelon (NYSE: EXC), General Dynamics Corp (NYSE: GD), or Archer Daniels Midland (NYSE: ADM), all of which are heavily connected to government contracts and would benefit from increased government spending.

Exelon is directly tied to the Obama administration: Rahm Emanuel and David Axelrod act as consultants, two top Exelon advisors are Obama fundraisers, and the company lobbies heavily for more greenhouse-gas restraints to drive demand for its nuclear power.

General Dynamics, the world's fifth-largest defense company, generated 72% of revenue from the Department of Defense in 2011, and was the number-four government contractor for fiscal year 2011.

Last but certainly not least, ADM, one of the world's largest processor of agricultural commodities, profits not only from ethanol subsidies but from corn syrup and export subsidies as well.

Although no one can be sure of Buffett's motives, it would be naïve to believe that someone as intelligent as Buffett has not considered the benefits of pushing through this tax structure. Higher taxes are always problems for entrepreneurs and regular people in the economy. However, they're often beneficial to the well-connected, who receive government bailouts and favors. And with Buffett even on the president's lips, he is becoming more connected to the power mechanism in D.C. every day. With many of Berkshire's companies, your loss as a taxpayer will be their gains.

[Warren Buffett is right to be concerned about the US federal government's debt levels – it is the country's biggest security threat by far. And it's getting worse. But you can protect yourself and your wealth, if you have accurate information on the trends and how to play them. Start learning about it now.]


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Although Senate Minority Leader Mitch McConnell (R-KY) dismissed the proposal as "a campaign document," the White House claims the measure would generate $206 billion in revenue over 10 years.


Further prrof why we have a spending problem, not a revenue problem. I mean seriously??? 206 Billion over 10 years ???? Thats like what, 20 Billion per year??? That debt interest payment alone is 450 Billion per year. Im guessing cutting down the deficit then the subsequent debt would save more in the long run. But hey, i dont study economics in an Alaskan brothel.
 

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Further prrof why we have a spending problem, not a revenue problem. I mean seriously??? 206 Billion over 10 years ???? Thats like what, 20 Billion per year??? That debt interest payment alone is 450 Billion per year. Im guessing cutting down the deficit then the subsequent debt would save more in the long run. But hey, i dont study economics in an Alaskan brothel.

Well you should start studying here, since everything you say is a complete lie and misrepresentation of the economy. Interest payments on the national debt that tax payers actually pay has never been more than $245 billion, let alone $450 billion per year.

Interest was less than 1.5% of GDP last year. But don't let facts get in your way.
 

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Further prrof why we have a spending problem, not a revenue problem. I mean seriously??? 206 Billion over 10 years ???? Thats like what, 20 Billion per year??? That debt interest payment alone is 450 Billion per year. Im guessing cutting down the deficit then the subsequent debt would save more in the long run. But hey, i dont study economics in an Alaskan brothel.

Meh, given history of his lies, don't be surprised if it's a lie too. No one in their right mind would pay $150K to go to private school only to get the same garbage education you could get in public school for a lot cheaper.

LOL. It's about time. FYI, the troll has two usernames: akphitroll and Iutoffee.
 

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Well you should start studying here, since everything you say is a complete lie and misrepresentation of the economy. Interest payments on the national debt that tax payers actually pay has never been more than $245 billion, let alone $450 billion per year.

Interest was less than 1.5% of GDP last year. But don't let facts get in your way.

Fucktard is lying through his teeth yet again......

Here is interest expenses on US debts......


2011 $454,393,280,417.03 2010 $413,954,825,362.17 2009 $383,071,060,815.42 2008 $451,154,049,950.63 2007 $429,977,998,108.20 2006 $405,872,109,315.83 2005 $352,350,252,507.90 2004 $321,566,323,971.29 2003 $318,148,529,151.51 2002 $332,536,958,599.42 2001 $359,507,635,242.41 2000 $361,997,734,302.36 1999 $353,511,471,722.87 1998 $363,823,722,920.26 1997 $355,795,834,214.66 1996 $343,955,076,695.15 1995 $332,413,555,030.62 1994 $296,277,764,246.26 1993 $292,502,219,484.25 1992 $292,361,073,070.74 1991 $286,021,921,181.04 1990 $264,852,544,615.90 1989 $240,863,231,535.71 1988 $214,145,028,847.73
 

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Further prrof why we have a spending problem, not a revenue problem. I mean seriously??? 206 Billion over 10 years ???? Thats like what, 20 Billion per year??? That debt interest payment alone is 450 Billion per year. Im guessing cutting down the deficit then the subsequent debt would save more in the long run. But hey, i dont study economics in an Alaskan brothel.

it's always been about spending
 

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Fucktard is lying through his teeth yet again......

Here is interest expenses on US debts......


2011 $454,393,280,417.03 2010 $413,954,825,362.17 2009 $383,071,060,815.42 2008 $451,154,049,950.63 2007 $429,977,998,108.20 2006 $405,872,109,315.83 2005 $352,350,252,507.90 2004 $321,566,323,971.29 2003 $318,148,529,151.51 2002 $332,536,958,599.42 2001 $359,507,635,242.41 2000 $361,997,734,302.36 1999 $353,511,471,722.87 1998 $363,823,722,920.26 1997 $355,795,834,214.66 1996 $343,955,076,695.15 1995 $332,413,555,030.62 1994 $296,277,764,246.26 1993 $292,502,219,484.25 1992 $292,361,073,070.74 1991 $286,021,921,181.04 1990 $264,852,544,615.90 1989 $240,863,231,535.71 1988 $214,145,028,847.73

We've been over this one billion times. This includes intragovernmental debt interest. Tax payers do not pay for this interest.

Please apologize.

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Get caught in a lie and change the subject. Typical Snoop maneuver!

I'm gonna have a meeting with my boss on Mon. On average, the company collects couple of million dollars of unearned premium daily, I think I can convince him to record them as revenues instead of liabilities.

Fucktard is showing the quality of Alaskan education again. LMAO!!!!!
 

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I'm gonna have a meeting with my boss on Mon. On average, the company collects couple of million dollars of unearned premium daily, I think I can convince him to record them as revenues instead of liabilities.

Fucktard is showing the quality of Alaskan education again. LMAO!!!!!

So are you saying tax payers do pay for interest on intragovernmental debt?
 

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So are you saying tax payers do pay for interest on intragovernmental debt?

I wouldn't expect a moron like you to understand the difference between revenue, unearned premium or liability for that matter. It's tough shit for you kid. You might be better off to wipe your ass with the degree you got from that shit hole Alaska.
 

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I wouldn't expect a moron like you to understand the difference between revenue, unearned premium or liability for that matter. It's tough shit for you kid. You might be better off to wipe your ass with the degree you got from that shit hole Alaska.

We are talking about intragovernmental debt. So are you saying tax payers pay for interest on intragovernmental debt?

Like usual, you are all over the place. Tell your voices in your head to chill out for a second and just focus on one topic at a time.
 

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We are talking about intragovernmental debt. So are you saying tax payers pay for interest on intragovernmental debt?

Like usual, you are all over the place. Tell your voices in your head to chill out for a second and just focus on one topic at a time.

There is no such thing as intragovernmental debts, it's a fancy term that's invented by this corrupt government to conveniently not include them as liability. In the real world, debt is debt. Can you imagine if private sector is allowed to use the same accounting practice the government is using? It's basic GAAP reporting, liabilities MUST be shown on balance sheet. Period.

But of course, dumb fuck liberals would buy into that fraudulent accounting practice, the government is doing a very good to brainwash sheep like you, and they're winning.
 

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There is no such thing as intragovernmental debts, it's a fancy term that's invented by this corrupt government to conveniently not include them as liability. In the real world, debt is debt. Can you imagine if private sector is allowed to use the same accounting practice the government is using? It's basic GAAP reporting, liabilities MUST be shown on balance sheet. Period.

But of course, dumb fuck liberals would buy into that fraudulent accounting practice, the government is doing a very good to brainwash sheep like you, and they're winning.

So are you saying tax payers pay for interest on intragovernment debt?
 

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