Last Updated:November 17 @ 07:57 am

The Most Ridiculous Tax Challenge Ever

By Bobby Eberle

Billionaire Warren Buffet is at it again. Remember last summer? Buffet wrote an op-ed in the New York Times (imagine that) titled "Stop Coddling the Super-Rich" in which he lamented the state of affairs in America and how the "mega rich" were spared from contributing their "fair share" of taxes. Now, he has thrown down a challenge that is even more ridiculous than what he wrote for the New York Times.

Back in August, Buffet wrote that his income tax bill amounted to $6,938,744. He notes that this came out to be only 17.4 percent of his taxable income. And because of this logic (or lack thereof), Buffet came to the conclusion that the rich are getting a break and that they need to pay more.

Barack Obama loved this! He came up with a tax plan called the Buffet Rule. He gave speeches blasting the rich... saying that they didn't pay their "fair share." He noted, as Buffet did, that Buffet's secretary is taxed at a higher rate than the billionaire himself. Blah, blah blah.

Rhetoric aside, the facts are well known. The so-called "rich" fund most of the government. They pay most of the taxes. With the tax cuts of George W. Bush, half of all working Americans don't even pay federal income tax! The reason Buffet's secretary is taxed at a higher rate is because she is still earning a paycheck and paying income tax on it. Back when Buffet's primary source of income was a paycheck, guess what? He was taxed at a higher rate too. He paid his income taxes all along the way. Then, he used his ingenuity, began investing, and more and more of his "income" was made off of money he already paid income taxes on. That's why his rate is lower.

With the Buffet Plan that Obama has outlined, everyone making $200,000 or more would see his or her taxes go up. Unemployment is still high, yet Obama wants to tax the job creators even more. How is that supposed to create jobs?

Now, Buffet has laid down a challenge to Congress. As reported at Fox Business: "The billionaire is now offering to donate $1 towards paying down the national debt for every dollar donated by a Republican in Congress." The offer doesn't cover Senate Republican Leader Mitch McConnell. For him, Buffet said he would pay $3 for every dollar donated by McConnell.

Perhaps Buffet wanted some air time again or was just bored, but nothing in his challenge makes any sense. The problem is not about taxes. The problem is about spending. The federal government spends too much money! Spend less, tax less. What's so hard to understand about that?

In her report, Elizabeth MacDonald at Fox Business notes that in addition to primarily paying taxes on capital gains, Buffet also lives on loans taken out against his assets, and lowers his tax bill further by deducting that interest on his returns. And he makes generous charitable contributions, which he can also deduct on his tax returns.

Indeed, Buffett's second of three contractual conditions for his ongoing pledge to the Gates Foundation reads: "The foundation must continue to satisfy the legal requirements qualifying Warren's gift as charitable, exempt from gift or other taxes."

MacDonald's best line in her analysis is this: So if Warren Buffett wants to reduce the deficit, he should encourage policies to create more millionaires, not lobby to tax them more.

This country used to be one in which someone would look at the "rich guy" and say, "I want to be like him." Now, we live in a country in which the government says, "Look at that rich guy. We will take from him and give to you." This will NOT make people more successful. All Obama's rhetoric does is promote jealousy and laziness. Buffet just adds fuel to the fire.

If Buffet wants to pay more in taxes... go ahead! Be my guest. But that would be like throwing money into the wind. Would I invest money in a sinking ship? No. I would invest money in a company that would fix the sinking ship! We need to fix the federal government, not throw more money at it.

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30 Comments

  1. wenramComment by wenram
    January 13, 2012 @ 10:07 am

     ”The billionaire is now offering to donate $1 towards paying down the national debt for every dollar donated by a Republican in Congress.” The offer doesn’t cover Senate Republican Leader Mitch McConnell. For him, Buffet said he would pay $3 for every dollar donated by McConnell

    What? What about the Democrats?  Why not encourage a Bi-Partisan effort? What a moronic idea.  

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    • newsjunkyComment by newsjunky
      January 13, 2012 @ 10:21 am

      I’m beginning to believe that Buffet just loves attention and enjoys placing himself in the limelight.  The man’s getting ridiculous!

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    • ccfontenComment by ccfonten
      January 13, 2012 @ 11:00 am

      Yes, what about Pelosi and all who are participating in insider trading and making millions that would put the rest of us in jail?
      Does Buffet think they are exempt?
      He’s just another wacky liberal fool. 

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    • inluminatuoComment by inluminatuo
      January 13, 2012 @ 11:19 am

       
      A better challenge would be From Warren Buffet to the 47% of Americans who paid NO TAXES last year to just match the 17% he paid of his income so we can get down the road to a real balanced budget instead of playing mind games where some people are created more equal than others and get to get by  in this country in faux equality by contributing NOTHING to our tax base, nothing to society, nothing to paying off our national debt and nothing to contributing real ideas of problem soving to the debacle of a political debate. What pathetic excuses for Real Americans.
       

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    • barbarossa03Comment by barbarossa03
      January 27, 2012 @ 5:49 pm

      Because its the Republicans that are against the idea of increasing the taxes on the rich, duh, do you need a picture next time?

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  2. MichaellabordeComment by Michaellaborde
    January 13, 2012 @ 10:24 am

    I wonder how much of our tax money Obama will give to Buffet that he can use to pay the more taxes he said he should pay. Dirt bag Buffet is in the tank for Obama.

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    • inluminatuoComment by inluminatuo
      January 13, 2012 @ 11:24 am

      His brain is so gone in Liberal senility he has to hire Bill gates to do his charity work. Good luck threading that camel through the eye of the needle Warren. Your days upon this earth are rapidly diminishing as you and your brain age in socialist dysfunction.

      Do we not understand his offer is just one more Socialist scheme to redistribute your money to the federal government who is the least equipped to deal in the sphere of mercy? Justice is what governments were designed to dispense and when the socialist governments take over the job of mercy which belongs to the church, we get neither justice nor mercy in more dependency which Buffet would finance with his offer. We need to starve the government beast not feed him more.

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  3. Spiritof76Comment by Spiritof76
    January 13, 2012 @ 10:35 am

    What amazes me about the stupid statements and challenges of Warren Buffet is that no one says to him, ” Warren, pelase take out your checkbook and write a check for all of your income or wealth and show us how it is done.  Stop complaining about how low your taxes are after having your accountants fix it that way!  US treasury will be glad to cash your check.  It will, however, keep on spending well over its receipts.  Since you understand business, how can a government keep on spending more than it takes in year after year?”
    Top ten percent of income earners pay 40% of all taxes.  Top 50% pay 97% of all taxes.  Is that not the progressive enough taxation?

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    • bna42Comment by bna42
      January 13, 2012 @ 1:44 pm

      Buffet is a liar and a deceiver.  He has had an ongoing battle with the IRS since 2000 over income taxes.  If he would just pay what he owes, then he might be a little more credible when he talks to other people about tax increases.

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  4. TomComment by Tom
    January 13, 2012 @ 10:37 am

    Buffet is losing it. His last few headline-making “investments” have been disastrous, but his company can use those losses to offset gains and pay less taxes. This article demonstrates very well how he can make his disingenuous claims and offer ridiculous challenges. Problem is…most of the 99 percenters don’t and never will make enough money to understand just how egregiously he’s manipulating the system. My wife and I own a very small company and we do the same thing…supplementing our income by taking loans from the company which generates significant cash flow from operations. We have more money to spend and live on, we get to deduct the interest we pay back to the company, and we do not increase our taxable income. Further, Berkshire pays him, and his executives far more in dividends than they do in salary because they’re taxed at a lower rate, and they avoid all the payroll-tax deductions.
    Buffet’s accountants and lawyers are smart, but like some old dogs, and old liberals, he’s become vicious and unpredictable and probably needs to be put down. His money is the only thing that affords him any continuing credibility with the media. Too bad most are unwilling or not smart enough to call him on this stuff.

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  5. liberalfascistComment by liberalfascist
    January 13, 2012 @ 10:40 am

    Warren Buffet is as corrupt as any Democrat Politician. Check this out… BAck when Obama was bailing out automakers and confiscated GM he forced GM to make a deal with the Chinese company BYD which is #3 auto builder in China.
    Under this deal by 2013 GM must start importing cars from BYD. JUST BEFORE all this Warren invested almost TWO BILLION into that number 3 car company which had before the Obama law no chance of growing beyond number 3.

    Could this have been Obama’s way of paying Warren back for all his support, power, and influence? I think it is, infact I would bet my life’s savings on it   

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  6. jhovjrComment by jhovjr
    January 13, 2012 @ 10:41 am

    His offer may be taken seriously if and only if it was tied to percentage of income or better yet percentage of net income ….. we would then see how quick he would be to match any donation. 

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  7. KlausComment by Klaus
    January 13, 2012 @ 10:50 am

    I am so sick of the ‘fair share’ comment made by liberals. If Buffet thinks he is not paying enough taxes, let him shut the hell up and pay more himself.

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    • newsjunkyComment by newsjunky
      January 13, 2012 @ 11:58 am

      Could not have said that better!  My sentiments as well.

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    • inluminatuoComment by inluminatuo
      January 15, 2012 @ 12:49 pm

      If Warren Buffet thinks the government is so well equipped to run a profitable operation and spend money wisely, let him hire Obama to run his comapnies and see how fast they go bankrupt faster than you can say Solyndra. Individuals know best how to spend their money or donate it the cahrity of their choice, so why give the government one dime more that will just be used to skim more off the top before redistributing it to the unworthy Democrats who live their lost lives of dependency. Warren is either a closed Socialist, or a coniving Capitalist who needs government approval by Obama for another business deal which the taxpayers will ultimately back with their dollars when it fails.

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  8. onewildmanComment by onewildman
    January 13, 2012 @ 11:23 am

    The trolls are here once again.
    IMPEACH OBAMA NOW! ! ! ! ! !

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    • inluminatuoComment by inluminatuo
      January 13, 2012 @ 4:50 pm

      Yes Wildman, the Trolls were here but late, they usually arrive between 9-10 am, do their dirty work and leave. You’d think the dummies would wait until later in the day so their 1 star ratings could be affixed to more conservative comments, but like the Liberals they are,,, they are too stupid to figure it out. This is why Liberals should never be placed into postions of running things, unless you needed something run into the ground.

      Just be patient and wait for the thinking productive people who actually work for a living to get off work and vote and everyone’s stars will shine again later in the day as usual.

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  9. Jack ReacherComment by Jack Reacher
    January 13, 2012 @ 11:31 am

    Ahhh… The financial genius has sadly morphed into the bumbling, dunderhead old geezer.  A shame, but the course of this malcontent could easily be traced to his membership in the democrat party.  His only reason for being a member was to assure himself of timid IRS or SEC investigations, should one ever occur.
    I realize this sounds trivial, but I’ve been a customer of GEICO Insurance for years and I’m considering leaving that company for an insurance company run, owned or operated by a true American patriot.

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  10. Mort_fComment by Mort_f
    January 13, 2012 @ 11:43 am

    True Charity means ‘no strings attached’. And spare me all of those ‘tax-exempt’ foundations with overpaid executives, many of whom are family. A tax dodge if there ever was one.

    I noted that when John Kerry was running, and he had to disclose a financial statement, that my charitable contributions were more than his. And since I do not have a mortgage, I do have good health insurance, I have no debts to pay interest on, in sum I do not qualify for itemizing and my charitable contributions are off the top, with no government subsidy.

    I will call his bluff, and raise him one. Compare net worth and use that as a multiple for Buffet to match my contributions. Apply that same multiple to our tax liabilty. No exemptions please.

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  11. jc711Comment by jc711
    January 13, 2012 @ 11:47 am

    In response to Iluminatuo’s first comment above, I agree wholeheartedly that the 47 % of Useless Non-Taxpayers ( not to be confused with useful idiots ) are the ones that need to start kicking in THEIR fair share.  They use their foodstamps and WIC to buy milk and Cheerios, then use their ” own ” money to buy cigarettes, beer, candy bars, and don’t forget the TATTOOS and PIERCINGS.  I’m so sick of subsidizing this useless bunch of TAKERS who’ve learned how to milk the system and use US to pay for THEIR bad habits.  

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  12. BillzillaComment by Billzilla
    January 13, 2012 @ 11:48 am

    Warren could save himself the price of the postage when he mails his check to the IRS, by simply flushing it down the toilet. And it would do just as much could down there, as it would by being flushed down the Federal rat hole.

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  13. JDZComment by JDZ
    January 13, 2012 @ 12:32 pm

    Something happens to egocentric wealthy men as they get older and they begin to detect they are losing it and look for ways to stay relevant in the world at large. Men like Buffett have had their way with us over the years as their successes and wealth have given them many opportunities to use their power to influence the world around us, and it is addictive to these power hungry people. He has more money then any one person should ever have in this world, but he was very good at power broking deals and manipulating the stock market to leverage his wealth.

    At this stage in his life, he just wants the attention of the public and he is getting it by playing these games and sucking in Obama as he does it.  They know what they are doing and it just again shows their lack of respect for the American public and the media pundits that they use to further their interests.

    It is sad to see someone like Buffett knowingly make a stupid statement that he pays less then his secretary in taxes (percent of income..not absolute dollars) when he knows he is comparing apples and oranges.  Then, it is even further stupid to have the media take this to extremes without explaing the differences between an income tax rate and a capital gains rate.  And..then the President who then invents the “Buffett Rule” that gives this misrepresentation a a national exposure for political purposes that just makes someone like me sick to the stomach.

    Buffett…go away and stay out of way as we kick Obama out of the Whitehouse.

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    • barbarossa03Comment by barbarossa03
      January 27, 2012 @ 6:24 pm

      Hey a conservative that admits that the super rich can be power hungry and want to run our lives.  Good job JDZ, one step closer out of the conservative denialism. 

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  14. onewildmanComment by onewildman
    January 13, 2012 @ 12:51 pm

    Why is my first comment still is awaiting moderation. how long does it take? I was the first to post @ 9:27am. It can’t even be seen if I don’t log in. i am also not receiving any of the comments in my email.


    IMPEACH OBAMA NOW! ! ! ! ! !

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    • pistol packing mamaComment by txgoatlady
      January 13, 2012 @ 1:00 pm

      I still haven’t figured out the moderation thing. I don’t know if it keys on certain keywords, commenters, or what. I have had comments moderated before. I quit using the email function because it seemed like I always managed to pick it for articles that exploded with troll comments and bogged down my inbox.

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  15. SAnnComment by SAnn
    January 13, 2012 @ 1:14 pm

    Buffett is just another Obama lackey as he uses his wealth to help support reelection for him.  He also needs to be evaluated to see if he is sliding into senility.

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  16. phils1024Comment by phils1024
    January 13, 2012 @ 7:53 pm

    I’m sick and tired of Buffet! Why the hell doesn’t somebody ask him how much he pays his tax attorneys? I’d be willing to bet that he pays them more than most of the Republicans in Congress pay in taxes!

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  17. kjb199Comment by kjb199
    January 14, 2012 @ 8:46 am

    There are a few other parts about Buffett’s company Berkshire Hathaway that make his position more absurd.
    One is that he owns about 45% of the voting stock in the company, so he creates most of his wealth within the company. The company doesn’t pay any dividends, so the only way for other shareholders to share the wealth of the company is by selling the stock. So this sets up a situation where these sellers would be taxed at…capital gains rates, instead of ordinary income rates! If he wanted to increase taxes on wealthy people, he could do so with one move–declare a cash dividend on Berkshire Hathaway stock!
    Another thing he could do is to stop making charitable donations; these reduce his own tax bill. He could send the same amount to the Treasury instead. This would not reduce his wealth any, since the money outflow would be the same.
    A third option is he could tell the company treasurer to just pay the taxes the IRS says his company owes. Currently, his company is disputing a tax bill incurred during the last decade; he could just decide to pay it.

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  18. rosechComment by rosech
    January 14, 2012 @ 1:17 pm

    Some of us get mentally deficient as we age and it is clear Buffett is there already.  He can contribute his millions to the government debt and leave the rest of us alone.  Also note that he owes taxes and has not paid them.  Gee, what’s good for the goose should definitely be good for gander, in this case, Buffett!  Best he keep his thoughts to himself.  Yes, we all have certain deductions and investments that aid in not paying a lot of tax just as he does and obviously he takes full advantage of them.  Also, how about helping the unemployed and those forced out of jobs by this administration instead of sending or giving his millions to the Gates Foundation to help the eternally open hands out of other countries, i.e., Africa.  Like those on “entitlements” here, their needs are insatiable and they know we will give to them.  Well, I was taught charity begins at home, but obviously Gates and Buffett think it should be given abroad somewhere.  Doesn’t sound like they are American patriots at all!  I don’t begrudge the rich anything because we can each of us strive to do the same thing, but to spout this nonsense only means his mind is shot to you know where!

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  19. eau55Comment by eau55
    January 14, 2012 @ 1:34 pm

    It’s truly sad when people that have earned respect in their fields of expertise let themselves get embroiled in political matters. It always seems to dimiinish that respect in the public eye. While I believe that private enterprise should offer advice to government as it relates to their expertise, that’s where their advice should end. While Warren Buffet has earned the billions that he is worth, that does not make him a spokesperson for other millionairs who have also earned their worth. If he wants to donate additional millions or billions to reducing the debt, then God Bless him. But I’m sure that he would quuickly recognize that it would be good money thrown after bad because as long as we keep increasing spending, raising additional revenue won’t solve the problem. Just as in the imigration debate where we have asked the government to stop the flow of illegals across the border before we address immigration reform, we need to stop the spending before we agree on more revenue which may not be needed. How many commisions have been formed and recommendations made to stop the excessive spending? Have any of these recommendations been enacted? Our politicians in Washington don’t have the will to stop the spending. And we as voters haven’t really held them accountable.

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