Warren Buffet to his investors: "Our holding period is forever".
"...Blessings are showered upon [the super-rich] by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
The Warren Buffet says that he wants to pay more tax yet one of the keys to the extraordinary returns that he generates for shareholders is that he buys and holds, ensuring that investors in Berkshire Hathaway are never exposed to short term capital gains taxes (taxed at regular income) and almost never exposed to long term capital gains.
This goes a long way towards explaining why Mr. Buffett has a lower effective tax rate than his secretary does. Does Mr. Buffett consider the current treatment of capital gains to be a 'goody'? Is he advocating higher taxes on capital gains or perhaps annual taxation of capital gains? Or simply on the income that the proles earn? We know (and presumably he does as well) that Social Democracies fund themselves via regressive consumption or VAT taxes, not higher income or corporate taxes. Canada's top personal income tax rate is 10 points below ours.
The more I watch Mr. Buffet, the more I understand his cynical attempt to position himself as the 'working man's' plutocrat. It's a cynicism that diverts the debate from the real issues. While he piles up billion after billion after billion in his empty quest to be remembered as the world's richest man.
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