makayla3tg1: Im Making Money

In a letter to the New York Times, CPA John Carrick succinctly summarizes a governmental scheme that would send private citizens to jail if they did the same thing:

Social Security is in effect a giant Ponzi scheme. Today’s contributions are used to pay beneficiaries who contributed yesterday, and the surplus of current contributions is “lent” to the federal government and used for general spending.

The Ponzi scheme underlying the Medicare system is even more blatant. Consider the new “Medicare Contribution,” enacted as part of ObamaCare in the name of “fairness,” which extended the 3.8 percent Medicare tax to the investment income of those making more than $200,000 ($250,000 in the case of a couple). The legislation dispensed with the interim step of sending the money to the Medicare Trust Fund, to then be “lent” to the general fund and spent on non-Medicare programs. Instead, the money from the new “contribution” will go straight to the general fund; Medicare will not even get a government IOU to hold in “trust.” Privately run Ponzi schemes are generally less brazen.

Later this month, Democrats will attempt to increase the “fairness” of the most progressive income-tax system in the world (under which about half of American households pay no tax at all and the top 1 percent pay of earners pay about 40 percent of the total) by increasing taxes on the “rich” to help finance the trillion-dollar deficits Obama has made the new norm. The plan is to withdraw hundreds of billions more dollars from the private economy while assuring citizens that the economic consequences will be felt only by the targeted few. The public seems to understand that the economic effect will be somewhat broader.

It is a shame that there isn’t more money in the Social Security and Medicare trust funds to “borrow.” That is such a simpler system — and there is no pesky criminal law to prevent it, since only private Ponzi schemes are banned. But the federal government has exhausted its current Ponzi possibilities and now seems more like Adam Sandler in a tax-fairness costume.

Every so often Warren Buffett goes on TV and calls for higher taxes. This from the guy who’s paid, according to Forbes, perhaps less than $10 million in taxes, a tiny percentage of his $50 billion net worth. I say perhaps because, to the best of my knowledge, Buffett has never made his tax returns public.

Buffett is big-business, with his Berkshire Hathaway holding company stock selling (today) at $119,675.00 per share. Berkshire Hathaway has 1 million shares, which means that Buffett heads a company worth more that the gross national product of a few small Latin American countries.

How does Buffett manage to pay so little in taxes? For one, Buffett, who wants everybody to pay for big-spending big government, donates sizable amounts to tax-exempt philanthropies, such as the Gates Foundation. Forbes, again,

He donates appreciated Berkshire Hathaway stock — which costs him pennies on the dollar — to charity, and receives a fat, juicy tax deduction at the appreciated price without having to pay a capital gains tax on the appreciation. (And, note that the money actually sits in his own charitable organization.) He’s saving income taxes with the ordinary deduction so it’s essentially a tax shelter.

He builds up his massive net worth and doesn’t have to sell stock while deferring capital gains. When he does take a capital gain, it’s at a 15% rate, and he lives in a low-tax state.

Buffett has been known to complain that he paid taxes on the lower-rated capital gains rate rather than the higher income-tax rate. Well, play me the world’s smallest violin, Warren.

Mind you, I’m all for capitalism. America is the greatest country in the world because historically it afforded its citizens the ability to legally prosper and live in abundance. What I object to is billionaires who got their own aiming to prevent anyone else from attaining the same, or more, as they.

This latest time around Buffett was on ABC’s This Week, and told Christiane Amanpour that “People at the high end, people like myself, should be paying more taxes”,

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Thursday, December 9, 2010

Im Making Money

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