Capitol Hill Blue Forums Political Issues Finance, the economy & Economics Warren Buffet must be dying

My dear, I did read your post. You do realize that the majority of Buffett's money came to him long before the tax system got as, shall we say, reformed as it currently is?

And if he can make bajillions without such favorable taxes rates, my friend, - so can you. Bootstraps, my friend, bootstraps!

For what it worth, Buffet has announced his decision to give away 99% of his wealth either before or upon his death. His family will not be poor, but will also not be extremely wealthy.

Humm, I think that is not entirely correct.

In the first place, a Major portion of his wealth was accumulated before the Reagan tax cuts. And so at that time, taxes for him would have been higher.

Also, the bulk of his wealth comes from holding stock in a company that he has managed very well. So he has not accumuilated wealth based upon high income, but rather s a rise in the value of his holdings. As you probably know, stock gains are only taxed upon sale... and so 99% of his wealth increase would be free of current taxes not matter what the tax system was.

The hedge fund managers are receiving high real income on a yearly basis. Buffet is simply saying that it makes little sense to him that these very high income earners should have a lower tax rate than ordinary working people. But, perhaps it is important that they should have a lower rate in order to have an equal chance of getting as rich as Buffet.

By the way, any anger directed at Buffet should also be directed at Bill Gates... who shares his views on taxes and is also working to give away most of his money. And like Buffet, Gates would be mostly unaffected by the mentioned tax changes since his wealth also did not come by income, but rather by having stock in a company whose shares increased in value.

Folks, you gotta understand that I have no problem with Bill Gates and Warren Buffet giving any or all of their money away. I have a big problem with them going around trying to give MY money away.

Why is that so difficult to understand? Is the concept that alien?

You say that with some authority but in fact it is only one of many names. The following article has been pasted here for your consideration.

OCTOTHORPE
Another name for the telephone handset symbol #.

This word is beginning to appear in a few dictionaries, but still seems mostly to be a jargon term of the North American telephone business. It has reached semi-official status by being mentioned in international standards documents but that’s no guarantee of a wide circulation any time soon.

Octothorpe is just one of a plethora of names for the symbol. In the US it’s often called the pound key, because it has long been used to mark numbers related to weight, or for similar reasons the number sign, which is also one of its internationally agreed names. Elsewhere it is commonly called hash, a term dating from the 1970s that may have been a popular misunderstanding of hatch. Many humorous or slangy terms have also been recorded, none of them with wide circulation: tic-tac-toe, gate, crunch, and many others. In 1989, one of the international standards bodies settled on square as the official name, seemingly on the grounds that most languages had an equivalent in its vocabulary, so it could be easily translated. As a result, the British Post Office, then responsible for telecommunications, settled on square and it is still used publicly by its successor organisation, British Telecom (BT).

With all these terms about, inventing a new one, especially such an odd-ball one as octothorpe, would seem to serve no practical purpose. The evidence suggests that it was originally a jokey term among engineers at Bell Labs in the USA. In the early 1960s, the Labs were working on ways to interface telephones to computers and invented what is now called touch-tone dialling. This needed two additional special keys on handsets, both of which have since become standard. One of these is the * symbol, usually known as the asterisk but which Bell Labs decided to call the star key. The other was the # symbol.

The word has appeared in many forms, including octothorn, octalthorp, octothorp, and octatherp as well as octothorpe. There are at least five stories circulating about its source. Nobody is in any doubt about the first part, which is obviously enough from the Latin (or Greek) word for eight, as in octagon for an eight-sided figure, because of the eight points on the symbol. It’s the second half that puzzles the experts.

The American Heritage Dictionary says that it comes from the family name of James Edward Oglethorpe, the eighteenth-century English philanthropist who secured a charter for the colony of Georgia in 1732 as a refuge for unemployed debtors. This sounds extremely unlikely as Mr Oglethorpe’s name is hardly a household word these days (at least, outside Georgia).

A second story says that it is a whimsical creation based on the idea that the symbol looks like a village surrounded by eight fields. Thorp is the Old Norse word for a village, which appears in many English place names, such as Scunthorpe or Cleethorpes, though it’s not known in North America. This is possible, though perhaps a little stretched.

A third story is documented, since Ralph Carlsen of Bell Laboratories wrote a memorandum about it just before his retirement in 1995. He records that in the early 1960s a Bell Labs engineer, Don Macpherson, went to instruct their first client, the Mayo Clinic, in the use of a new telephone system. He felt the need for a fresh and unambiguous name for the # symbol. He was apparently at that time active in a group that was trying to get the Olympic medals of the athlete Jim Thorpe returned from Sweden, so he decided to add thorpe to the end. (Jim Thorpe, a native American who has been described as the greatest athlete of the twentieth century, had won medals in the decathlon and the pentathlon at the 1912 Olympics in Sweden, but had later been disqualified because he was found to have accepted money for playing baseball three years earlier, so making him a professional. His medals were finally returned in 1983.)

In 2006 Douglas A Kerr documented his own memories of the genesis of the term. Though the background facts about the development of the telephone system and the need for the new symbols match those of other sources, his story about the creation of the term is quite different. He says that it was a joke term, originally octatherp, invented by two friends, John C Schaak and Herbert T Uthlaut, who deliberately included the th sound that would be difficult for speakers of some languages to say. Mr Kerr says that he and the others quietly introduced it as asides into various documents until it caught on.

Yet another claimant to its invention is Lauren Asplund who in 2006 in a contribution to Wikipedia attributes octotherp to Howard Eby and himself: “They based the octo portion of the word on the eight points of the symbol and then chose therp just because it sounded Greek and went well with octo.”

Unfortunately, there is no corroborative evidence for any of these stories. Though those of Mr Carlsen and Mr Kerr are anecdotally rich and circumstantial, they have to be regarded by etymologists with some caution because they aren’t backed up by contemporary evidence. In fact, the first appearance of the word in print isn’t until 1974 and that makes clear that the word was not widely known even then within the Bell telephone system.

How are they doing that? Just because they express an opinion about taxation?

A little long for a sig line, I think.
But thanks, Greger.

Stooch has been telling me that no one reads or pays any attention at all to anything I type. I'll rest easier now. But you might want to consider getting some professional help.

Buffet has also urged that the estate tax not be repealed. That means his estate will owe a lot of money on his death - so eventually the government would get some of those taxes he avoided paying in the here and now.

Personally, I find Buffett's and Gates' statements on taxes refreshing. There are people out there who are in the "upper" tax brackets who appreciate the special favor they have gotten. There is a great distinction to be made between the "merely" rich and the "filthy" rich .

Seriously, though, his fundamental point is sound. There is no earthly reason why the super rich should pay less taxes than the working class -even the upper working class. My effective tax rate is significantly higher than Bill Gates' even though he make a lot more money. There are four inequities that I think should be eliminated from the system entirely:
1) Eliminate special preference for Capital Gains. It is a fraudulent distinction that drains billions from taxable income and forces more taxes to be taken from wages. Income is income. Arguments about getting taxed twice are completely bogus, as Ardy noted succinctly above. Investments that earn income are merely new income that has never been taxed before.
2) Tax gifts and estates at the same rate as all other income. Income is income. For the same reason that Ardy noted, the argument regarding "double taxation" is again completely fraudulent.
3) Apply FICA to all income, and eliminate the ceiling. By tying it exclusively to wages, wage earners (especially at the lower end) have much higher effective tax rates than high wage earners and non-wage earners (who live off interest and investments). Income is income.
4) Reintroduce a higher graduated tax. Progressivity is a good thing. The economic reality is that the changes are incremental and at a certain point low taxes on extremely high income are counterproductive to the general economy. The arguments to the contrary are not based upon actual economic realities but "models" without an empirical basis.