Larry Elder on Warren Buffett

Larry Elder wrote "Buffett now believes that government should redistribute the wealth earned by others to those who did not earn it."

In his article "Billionaire Warren Buffett -- a Case of the Guilts?" Larry Elder wrote,

• " Whatever happened to Warren Buffett, the world's third-richest man? Guilt, a feeling of being blessed by luck, forgotten lessons — who knows? In any case, Buffett now believes that government should redistribute the wealth earned by others to those who did not earn it."and
• "First, Buffett, on his $46 million a year, paid — at his 17.7 percent rate — over $8 million in taxes."

and

• "Now let's deal with his secretary, whom he claims pays his or her taxes at a 30 percent rate. Buffett, in his speech, provided no details about the secretary. But even with minimal deductions, the highest possible federal tax bracket for a single person earning $60,000 a year is 25 percent. We don't know whether Buffett's secretary is married, a homeowner or renter, or has children.Let's suppose Buffett's secretary is a single person, a renter, no kids, and makes no IRA contribution (or any other gross income adjustments) and claims the standard deductions. This scenario places the secretary in the highest possible income tax bracket. But after the standard deduction ($5,150) and one personal exemption ($3,300), the secretary's taxable income becomes $51,550 — the 25 percent tax bracket. This means the secretary pays $9,439 in taxes — or 15.7 percent of the $60,000 annual income. Assuming the secretary lives in Nebraska (where Buffett is headquartered), with its highest income tax bracket at 6.84 percent, the secretary pays $2,663 to the state, or another 4.4 percent of the $60,000. Altogether, this gives the secretary a total tax rate of 20.1 percent."

then

• "Now suppose we're talking about a married secretary, with a stay-at-home spouse. They file jointly, pay a home mortgage and have two kids under the age of 17. They place $4,000 in an IRA and itemize $15,000 in deductions. Here the tax picture changes dramatically. Taxable income drops to $27,800 — the 15 percent tax bracket. With child tax credits, secretary now pays $1,419 in federal taxes, or 2.4 percent of $60,000. Add in another 2 percent for $1,218 in state taxes, and secretary pays a grand total, state and federal, of 4.4 percent on the $60,000-a-year salary."

Larry missed or ignored what I heard Buffett say so I wrote him. My emailed letter was:

• Hello fellow Libertarian!
• I agree with you except for your calculations in the article "Billionaire Warren Buffett -- a Case of the Guilts?"http://news.yahoo.com/s/uc/20070705/cm_uc_crlelx/op_243207
• Buffett considers Social Security and Medicare payments as taxes. Those are a tiny percentage of his salary while they are about 15% for his secretary. Add that 15% to the small "real tax" she pays and the rate is higher than Buffett's 17.7% rate.
• At least he is being honest that the idiots who run our government are not investing these SS payments but simply spending it so they treat it as if it is a tax while promising us benefits that can only be delivered if it was invested in the stock market and Treasuries, not just Treasury equivalents.
• best regards
• Kirk Lindstrom
• http://investment.suite101.com/
• http://www.theretirementadvisor.net
• FREE issue of Kirk's Investment Newsletter @ http://home.netcom.com/~kirklindstrom/Newsletter/WhatLetter2Buy.html

I will let you know if Larry Elder writes me back.