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Warren Buffet May Owe A Billion Dollars In Back Taxes

Discussion in 'Free Speech Alley' started by Sourdoughman, Oct 12, 2011.

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Sourdoughman TigerFan of LSU and the Tigerman

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Great Read, I still remember Barney Frank telling people in 2005 that nothing was wrong with Fannie Mae or Freddie Mac, he said they were paranoid, lets put a lot of the blame where it belongs and QUIT taking up for Corrupt Government!
Melanie Sturm: Think Again | AspenTimes.com

Sourdoughman, Oct 13, 2011

#11
LSUsupaFan Founding Member

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red55 said: ↑

That conservative blog should be called out for really what it is . . . full of lies and deceptions and very badly written. It is full of holes.

First of all Warren Buffet does not owe the IRA a billion dollars -- that is an out and out lie. What has been alleged by a critic is that the corporation Berkshire Hathaway owes a billion dollars to the IRS based on it's own annual report. And that is also untrue.

Berkshire Hathaway is the 8th largest corporation in the world and has vast holdings and complicated taxes. Buffet owns 23% of its value and controls 34% of its votes. As it noted in its annual report, “Unrecognized tax benefits represent the company’s potential future obligation to the IRS and other taxing authorities. They have to be recorded in the company’s financial statements.”

All this is, is the money that may be owed to the IRS after all of the audits are performed and a judgement made. This happens all the time to large companies and many individuals, it happened to me this year for my 2008 tax return. The IRA will question what they see as a discrepancy and then the company/taxpayer must show the IRS how they arrived at their numbers.

I failed to report the cost basis of some stock I inherited when my Mom died and they tried to tax me $3,400 on the whole amount. After I provided the evidence of my cost basis, I took a small loss and ended up getting a $262 refund. This is what is happening with Berkshire Hathaway. They are arguing unrecognized tax benefits and have not yet reached a conclusion.

Being a public corporation BH is required to report to shareholders in their annual report that a certain amount of their money is being held to pay a possible tax. That's all. When the issues is settled BH will either pay the money owed, or none of it, or a part of it depending on the ruling. As noted in the BH annual report.

“We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (‘IRS’) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months,” the report states. “The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

The snide author of the blog disingenuously suggest that Buffet personally owes money, which is a complete lie. He then suggests that Berkshire Hathaway failed to pay a billion in taxes, which is also a lie. BH filed their returns, pay their taxes, and they are being audited for some corporate tax benefits claimed. This is something that all corporations do and the Conservatives are the ones who provide this generous corporate welfare.

The fact that Buffet has public said the billionaires should pay more personal income tax has nothing whatsoever to do with the Berkshire Hathaway taking advantage of all legal corporate tax benefits. The BH board is obligated to all of its owners to pay all taxes owed and not one dollar more. Buffet can talk about his own income, but he can't speak for the income of all of the BH stockholders.
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All 100% true. That article stank of intellectual dishonesty. Very similar to Buffet in that regard.

LSUsupaFan, Oct 13, 2011

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Sourdoughman TigerFan of LSU and the Tigerman

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Here is another article on Buffett, a good read.
Warren Buffett made $62,855,038 last year - Oct. 12, 2011
Quote
"By sheltering millions of dollars of income from taxation through charitable giving, Mr. Buffett demonstrates that he doesn't trust Washington with his own money either," Huelskamp told CNNMoney.

Huelskamp originally asked Buffett to release his federal tax return because "it is my firm belief that if your name is lent to a national policy and your story the justification for a major overhaul of the tax code, then the American people have a right to see the evidence guiding that policy."

The rule would ensure that people making more than $1 million pay a higher percentage of their income in federal income and payroll taxes than those who make less.

That would be a lot less straightforward than it sounds, however.

And just in terms of averages, the current tax system already satisfies the Buffett Rule. Americans on average pay 16% of their total income in federal income and payroll taxes, while millionaires pay an average of 20.1%, according to the Tax Policy Center.

Sourdoughman, Oct 13, 2011

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red55 curmudgeon Staff Member

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LSUsupaFan said: ↑

All 100% true. That article stank of intellectual dishonesty. Very similar to Buffet in that regard.
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How is Buffet being dishonest?

red55, Oct 13, 2011

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red55 curmudgeon Staff Member

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Sourdoughman said: ↑

Here is another article on Buffett, a good read.
Warren Buffett made $62,855,038 last year - Oct. 12, 2011
Quote
"By sheltering millions of dollars of income from taxation through charitable giving, Mr. Buffett demonstrates that he doesn't trust Washington with his own money either," Huelskamp told CNNMoney.

Huelskamp originally asked Buffett to release his federal tax return because "it is my firm belief that if your name is lent to a national policy and your story the justification for a major overhaul of the tax code, then the American people have a right to see the evidence guiding that policy."

The rule would ensure that people making more than $1 million pay a higher percentage of their income in federal income and payroll taxes than those who make less.

That would be a lot less straightforward than it sounds, however.

And just in terms of averages, the current tax system already satisfies the Buffett Rule. Americans on average pay 16% of their total income in federal income and payroll taxes, while millionaires pay an average of 20.1%, according to the Tax Policy Center.
Click to expand...

So what do you make of this?

The story says Buffet makes $62 million a year, but because of policies promoted by Republicans, only $39 million is taxable and most of that at the low 15% rate for investors, not the 35% owed by people who make a living through salaries and small business profits. As a result he pays only 17% of his income in taxes, which is less than what I pay.

So you are objecting that he won't release the details behind these figures that he has given from his own tax return? Why?

So you are suggesting that he is "sheltering millions of dollars of income" when what he has done is donate millions to charities and earned the same tax breaks that anyone else earns for donating to charity? Why is that dishonest? Every taxpayer in the country does the same thing.

This article isn't an indictment of Buffet, it is an indictment of tax breaks that benefit mostly the wealthy.

red55, Oct 13, 2011

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SabanFan The voice of reason

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red55 said: ↑

So what do you make of this?

The story says Buffet makes $62 million a year, but because of policies promoted by Republicans, only $39 million is taxable and most of that at the low 15% rate for investors, not the 35% owed by people who make a living through salaries and small business profits. As a result he pays only 17% of his income in taxes, which is less than what I pay.

So you are objecting that he won't release the details behind these figures that he has given from his own tax return? Why?

So you are suggesting that he is "sheltering millions of dollars of income" when what he has done is donate millions to charities and earned the same tax breaks that anyone else earns for donating to charity? Why is that dishonest? Every taxpayer in the country does the same thing.

This article isn't an indictment of Buffet, it is an indictment of tax breaks that benefit mostly the wealthy.
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Buffet is dishonest because he tries to make us think his secretary pays proportionately more than he does.

SabanFan, Oct 13, 2011

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red55 curmudgeon Staff Member

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SabanFan said: ↑

Buffet is dishonest because he tries to make us think his secretary pays proportionately more than he does.
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It's the truth, Buffet knows the numbers. You don't.

red55, Oct 13, 2011

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LSUsupaFan Founding Member

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red55 said: ↑

How is Buffet being dishonest?
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In his famous secretary example he uses the secretaries marginal tax rate and compares it to his effective tax rate to point out that she pays a higher percentage of income.

LSUsupaFan, Oct 13, 2011

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red55 curmudgeon Staff Member

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LSUsupaFan said: ↑

In his famous secretary example he uses the secretaries marginal tax rate and compares it to his effective tax rate to point out that she pays a higher percentage of income.
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How do you know this?

red55, Oct 13, 2011

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SabanFan The voice of reason

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red55 said: ↑

How do you know this?
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A scientist told me.

SabanFan, Oct 13, 2011

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