Warren Buffett: Stop coddling the super-rich

[Neil Heath]

[Sandy]

Smart man.

Job creation reached its peak in this country when Bill Clinton was President. Economic growth ran on near record paces, and wages increased while the Fed kept the interest rates low, slowing down inflation and raising government revenue to the point where the budget was balanced. Had it not been for the deficits ran up during the Reagan/Bush I years, the government would have been out of debt completely by 2000, Social Security and Medicare would have had reserves which would have lasted into the 2050's.

Now we have nearly a dozen Republicans contemplating running for president, advocating the same economic reasoning that Bush put into place during his administration which brought on this recession in the first place. The bottom line is that these people have simply purchased a Congress and a White House, and most likely a Supreme Court, that will do their bidding. Enjoy it while you can. If someone like Mit Romney or Rick Perry should happen to stumble into the White House, your financial future will be ruined. Unless you're already rich, that is.

[KeithE]

Smart man yourself Sandy!

Again I will urge BLfers to buy and read which gives facts and figures about what has worked and what hasn't over the last 58 years. It parses the DATA not only by who was president but by the makeup of congress and the laws that have been enacted.

The results will surprise those of you who get your economic viewpoints from the media and ideologues like Ayn Rand, Thomas Sowell, etc. The question is whether or not you will let the DATA speak to your apriori viewpoints.

Here is

[Gene Scarborough]

I worked in the Insurance field from 1986-1999. It quickly became obvious that the big hitters did so with the rich. Insurance Cash Values are tax deferred. Also, any agent who could crack the Democratic tax rules of "what the boss gets should also go to the workers"---had magic in his hands.

The first thing you learn is that every person of wealth has several essential advisors: Tax Lawyer / Accountant / Insurance Professional. The best Estate Tax planning insurance advisors tell a wise client to pay his necessary taxes (actually paid by his heirs for the "priviledge" of inheriting) with one dollar for 4-10 with a good insurance policy. The rich have no problems ripping out the checkbook to save big bucks even on those "vile" inheritance taxes! In such a case the Insurance professional depicts himself as the qurterback of a team involving the client / lawyer / accountant.

Now, with respect to Estate Taxation---the US made a conscious decision that we should be a country of shared responsibility rather than one of the priviledged few as in England and Europe. In the early 1900's this tax was instituted as a response to the Vanderbilts / DuPonts / Rothchilds / etc. who had become quite elitist during the expansion days of railroads and electricity among other things. They were in the right place at the right time and loved their wealth. The Vanderbilts had bought land outside Ashville, NC, and built their little castle on the hill as a summer home---er, castle!

The reason that house is a public place today is Estate Taxes. They were designed to bankrupt any estate within 3 generations. They are vague enough to give the IRS a superior hand. You can fight them if you want to spend large sums of money. It is still wiser to simply pay them within 9 months of the death of the last spouse. The heirs, now after $1.3M "tax credit," start paying .53 of every dollar and it quickly escalates. After all, the government figures, what the heck are you going to do with funds in excess of $1.3M.

The rich hate it, but it makes sense to me. A rich woman like Jackie Onassas, for some reason of ignorance, failed to make adequate preparation with an insurance policy so they had an "Estate Auction Sale" to pay. It is cash on the barrel-head 9 months after death. The IRS is a cuel master of stupidity!

You would think a person smart enough to build a monster estate would have sense enough to protect it through insurance. I was amazed at the numbers of people who simply said, "I will get around it by being smarter!" What they don't realize is that any financial transfers within 3 year of death are sucked back in and counted to the penny as well!

Why do you see rich folks' names on big buildings? You think they are full of generosity? Not just NO, but HELL NO---they are motivated to generosity by Inheritance Taxes and it distributes their wealth one way or another back to the people who helped them make those big bucks. They, too often, stood on their backs and paid them far too little to make them rich, but in the end it dawns on them who really made them great.

I had the priviledge of knowing Miss Mae Coker of the famous Cokers of Hartsville, SC. She was my kind of rich person! She taught me that riches don't necessarily make for being a snob.

I lived in her house for a week as I went to Hartsville FBC as the Associate Minister. Her maid met me at the door in her white uniform and ushered me into the study with it's 16' ceilings and damask curtains. We walked past the Queen Anne dining table that seated 24 first. I looked around the library and there were 2 black-and-white framed pictures. One had the inscription: "To Mae Coker from Averil Harriman."

When Miss Mae came in I asked her about the picture of the 2 couples on the stone steps. She simply said, "That's my parents on the steps of Buckingham Palace with the King and Queen of England. He was Under Secretary of the Treasury for the Roosevelt Administration." Holy cow---if only my SC Democrat farmer grandaddy could see me now!!!!

She was a woman of wealth who gave much of it away, BUT she was the kind of person who treated her colored help with the same dignity and respect she would give the President of the United States. If he were a Democrat, I can promise a returned phone call before the day ended if she put in one.

She was super rich as sole heir to Sonoco Paper Products and Coker Department Stores, to cite just a few of the family holdings. Being a Warren Buffett-kind of person she would join him in saying the rich have enough and it's time to share. She gave a Pall to the FBC Hartsville at her death. It symbolizes we are all equal at death. That Pall covers a wooden box just as it does the finest bronze casket so no one can observe riches or poverty.

Somehow we have forgotten riches do not get you through the gates of heaven nor is it true that "he who dies with the most toys wins." Some of the most miserable people I have ever known are those who conned their way to riches or simply were in the right place at the right time. When they got too concerned about their bank account, they didn't want any poor folks marrying their children or grandchildren.

The super-rich CAN be folks who didn't forget where they came from. If they seem too proud, then wait until the Estate Taxes get through with them!!!!

[ET]

[ET]

[Gene Scarborough]

ET---Your economic theories are depressing and somewhat mad. Sometimes I wonder what you are smoking!!!

[ET]

[Chris]

[KeithE]

[Gene Scarborough]

Let me share with you some NC / Rocky Mount facts:

1) The economy of that town was based on railroad / textile / tobacco / agriculture as far as labor intinsity is concerned.
2) Now it is a "city on the rise"---in drugs and crime only!
3) An hour's drive away is the Research Triangle Park of Raleigh where high tech industries which are environmentally clean are somewhat thriving.
4) The labor base in Nash/Edgecombe counties does not care to do the hard work to develop skills compatable with high-tech
5) The industrial development person making a good salary for the area is a political tail kisser doing little or nothing to change either the level of technical training nor enlistment of new industry.
6) The many empty warehouses which could produce sub-assembly work for the Research Triangle computers remain empty because no one has a vision or is willing to pay the price for such a vision to materialize.
7) As long as this attitude persists, Nash/Edgecombe will continue to grow more like NJ in its looks and crime.

Now, even the executive class of people are only those deciding to retire in Rocky Mount. They have tax advisors and insurance professionals capable of helping them use loopholes to the max, but without new blood even they are starving.

So what is the problem with a simple flat tax which is simple and lets the financial support of the country be more fair?

The more complex it all becomes and the more people find their loopholes, the deeper the problem will become.

Taxes and their special recipients of loopholes is one of the worst ways to promote change in business and industry. Make it simple / make it fair / minimize the hands of guided politicians making new rules and regs driving this economy into oblivion!!!! Just give new businesses and inovative industries a simple world in which to live!!!