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Sunday, January 29, 2012

CNBC: Warren Buffett Defends His Secretary From 'Ridiculous' Attacks

By: Alex Crippen
Executive Producer
 
 
 Published: Friday, 27 Jan 2012 | 12:47 PM ET
Warren Buffett assistant Debbie Bosanek
Warren Buffett's assistant Debbie Bosanek speaks with NBC's Tom Brokaw in this frame grab from a 2007 report on Buffett's call for higher taxes on the super-rich.

Warren Buffett says criticism of his secretary, Debbie Bosanek, over her supposed high salary and purchase of a second home, is 'ridiculous' and misses the point he's trying to make on tax rates for the very rich.
During his State of the Union address this week, President Obama said it isn't fair that Buffett pays a lower tax rate than his secretary does, arguing for a "Buffett Rule" that would impose a minimum 30 percent tax rate on those making a million dollars or more per year.  Bosanek had been invited to sit in Michelle Obama's box to watch the speech.

Buffett tells the Omaha World-Herald, "They can't attack the facts, so they attack the person. It's ridiculous."

His point: "I'm saying she is being treated unfairly in the tax code, as are tens of millions of others, compared to me.  They shouldn't change the rates on all the other people.  They should change mine."

As for a Forbes blog post by contributor Paul Roderick Gregory estimating Bosanek earns between $200,000 and $500,000 a year, "making her scarcely the symbol of injustice that Obama wishes her to project," Buffett replies that Gregory "doesn't have any idea, just zero.  If I were to estimate his salary, I'd probably be closer than he is."

Buffett says all the online guesses about Bosanek's salary aren't correct, but neither he nor she will reveal her actual salary because they say it's a private matter.  She does, however, feel that she is "treated fairly at Berkshire"  Some critics have argued that since Bosanek allowed herself to be injected into the public debate, she should release her tax returns. 

As for her newfound fame as a symbol for President Obama's push for a "Buffett" tax rule, Bosanek says, "They needed to pick one person, and I was the lucky person they picked, or unlucky."

She adds that Buffett never implied she is poor or underpaid.  "It's not like I look forward to paying taxes, but I don't mind paying taxes as long as everybody's treated fairly. . I'm not saying anyone should feel sorry for me or lower my taxes."

She's also not apologizing for the second home she and her husband purchased in Arizona last summer for $144,000:
"I share Warren's view about the future of America, and we believe that our country will do just fine. I'm happy to make this investment.  Hopefully in 10 years, when I turn 65 and Warren turns 92, I will be able to convince him to finally retire so I can retire, after working 47 years, and spend some time where the sun shines in the winter." 

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WALL STREET JOURNAL: Will Buffett Avoid the Buffett Rule?

Billionaire Berkshire Hathaway CEO Warren Buffett is once again thrilling the political class by volunteering other people to pay higher taxes. Long-time observers recall his opposition to former President George W. Bush's efforts to reduce the tax rate on dividends. Since Berkshire pays no dividends, Mr. Buffett had little at stake but enjoyed the opportunity to pose as if he were a rich guy eager to cough up more dough to Washington.


In the current debate, President Obama is pushing the "Buffett Rule" to ensure that high-income earners pay higher tax rates. But even if it's enacted, don't expect the Buffett Rule to have much impact on Mr. Buffett. By an amazing coincidence, the sage of Omaha is already positioned to shield most of his rising wealth from such a tax.

Political journalists who don't read the business press are the most likely to be duped by Mr. Buffett's pose as a public-spirited billionaire happy to pay more to support the government. He frequently suggests that tax hikes will have little impact on investment activity. In a New York Times op-ed last August, Mr. Buffett said, "I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."

But he seems to have concluded that a potential tax bill might have scared off some owners of the Burlington Northern Santa Fe railroad when Berkshire was negotiating to buy it. According to a January 2010 Barron's story, Mr. Buffett "said that, while he's not enthusiastic about issuing more shares, the deal is too large to be all-cash and that he wants to give Burlington shareholders a tax-free option."

In another case, it's not clear if Mr. Buffett was scared but he certainly appears to have been angry when Kraft Foods, partly owned by Berkshire, didn't pay as little in taxes as he wanted them to. In another Barron's story from May of 2010, the magazine reported that Mr. Buffett "groused about a tax bill of roughly $1 billion that Kraft incurred by selling its pizza business to Nestlé, the world's largest food concern, for $3.7 billion, to raise additional funds. 'Dumb' was Buffett's word of choice."

This brings us to the Buffett Rule, which at its heart is a way to raise taxes on dividends and capital gains. Berkshire still doesn't pay a dividend, and as for capital gains taxes, well, Mr. Buffett has already made clear that he'll largely avoid them by transferring his fortune to the Gates Foundation and to charitable trusts controlled by his family. In fact, at the 2010 Berkshire annual shareholders meeting, according to Dow Jones Newswires, Mr. Buffett urged attendees to "follow my tax dodging example" and give away their wealth. Democrats in Washington may enjoy using Mr. Buffett as cover to raise taxes, just as long as they understand that he won't necessarily be paying them.


 
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Friday, January 27, 2012

ABC VIDEO: Warren Buffett & his secretary speak

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Buffett's assistant, Debbie Bosanek & Buffett speak to the ABC about tax and the politics of envy.


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CNBC: Does Warren Buffett's Secretary Really Make Over $200,000?

Published: Thursday, 26 Jan 2012 | 1:00 PM ET
By: Alex Crippen
Executive Producer

Debbie Bosanek
Getty Images
Warren Buffett's assistant, Debbie Bosanek.

Forbes contributor Paul Roderick Gregory got some attention with his post Wednesday afternoon headlined "Warren Buffett's Secretary Likely Makes Between $200,000 and $500,000/Year."

Buffett's assistant, Debbie Bosanek, is in the news after sitting in Michelle Obama's box for Tuesday's State of the Union address in which President Obama repeated what Buffett has been saying for years: "Right now, Warren Buffett pays a lower tax rate than his secretary."

It's part of Obama and Buffett's argument for higher tax rates on the nation's wealthiest taxpayers, with the implication that a secretary doesn't get paid all that much and thus it is unfair she is paying a higher tax rate than her extremely wealthy employer.

Gregory appears to be trying to poke a hole in that argument by saying that at her supposed income of $200K to $500K, Bosanek "is scarcely the symbol of unjustice that Obama wishes her to project." 
He assumes Buffett's tax rate is around 15 percent since most of his income comes from capital gains.  Then, looking at IRS data, Gregory finds that:
"... taxpayers earning an adjusted gross income between $100,000 and $200,000 pay an average rate of twelve percent. This is below Buffett’s rate; so she must earn more than that. Taxpayers earning adjusted gross incomes of $200,000 to $500,000, pay an average tax rate of nineteen percent. Therefore Buffett must pay Debbie Bosanek a salary above two hundred thousand."
While we have no idea what Bosanek's compensation actually is, it does appear that Gregory's argument is based on an "apples to oranges" comparison.

Buffett's "office staff" example, as laid out in his New York Times op-ed last fall, is that his total 2010 federal tax bill — "the income tax I paid, as well as payroll taxes paid by me and on my behalf" — was 17.4 percent of his taxable income.

In that op-ed, Buffett says that using the same calculation method, that was a "lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent."

Gregory's conclusion is based on just income tax rates, not payroll taxes, compared to adjusted gross income, not taxable income.

As Forbes personal finance staffer Janet Novack wrote in October, based on a letter Buffett sent to Rep. Tim Huelskamp, Buffett's effective federal tax rate was just 11.06 percent of his AGI.  Novack writes in a comment under Gregory's post that "just based on AGI" Buffett "pays an income tax rate below the rate for those with AGI of $100,000 to $200,000."

While it is possible Buffett pays his assistant a six-digit salary higher than his own $100,000 per year, there does not appear to be any real evidence to support a claim that she "must" be making more than $200,000 a year.

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Monday, January 23, 2012

VIDEO: Warren Buffett sings for Chinese New Year


US billionaire Warren Buffett has appeared singing and playing the ukulele on Chinese state television. The billionaire popped up on CCTV and wished the people of China "a happy new year." The Lunar New Year of the Dragon begins at midnight on Sunday. "Your country has accomplished amazing things, and the best is yet to come," Buffett told the broadcaster. The investor is well respected in China for his financial success.

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Wednesday, January 18, 2012

TIME MAGAZINE: Interview with Warren Buffett - Jan 2012

Mark Seliger for TIME

The full Warren Buffett Interview with Time Magazine from the Jan 23 Issue will be available at this blog from Friday 20 Jan (NZ Time)

Here is a short taste:


Warren Buffett believes in making money. He believes in fairness. He believes in the ability of government to make people's lives better. But most of all, he believes in luck.

"I've had all this good fortune," Buffett says. "It starts with being born in this country, though. It starts with being born male in 1930."

Genes, luck and birthplace may have helped make Buffett the world's third richest man. But in the past year, his good fortune has also turned him into one of America's most unexpected radicals. He's an ardent capitalist who is demanding higher taxes on the rich and...


Other excerpts from the interview

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DAILY MAIL: Warren Buffett breaks down in tears at mention of his first wife who died of oral cancer


By Meghan Keneally


Last updated at 9:25 PM on 13th January 2012

The affable demeanor of Warren Buffett is not what one might expect when picturing one of the world’s most hard-nosed and successful businessmen.

But neither is the image of him bursting into tears mid-interview when discussing his first wife, Susan, who died of oral cancer in 2004. 


Their relationship was always an unconventional one more akin to Hollywood than that of his hometown of Omaha, Nebraska.

For after marrying in 1952 they stayed as husband and wife despite her moving away in 1977 and him forming a relationship with a close friend of hers. 


Mostly happy guy: Though he is generally upbeat, the subject of his first wife's death brings Mr Buffett to tears
Mostly happy guy: Though he is generally upbeat, the subject of his first wife's death brings Mr Buffett to tears


Loving wife: Just two months before she died in 2004, Susan Buffett spoke about her love of Warren and their unbreakable bond
Loving wife: Just two months before she died in 2004, Susan Buffett spoke about her love of Warren and their unbreakable bond

Susan died of the cancer in 2004 and it was talking about her that brought the business titan to tears. 

‘Her death is - it’s just terrible. It’s the only thing that’s really up there,’ Mr Buffett said in an interview with Time Magazine. 

‘I still can’t talk about it,’ he said as he cried for several minutes. 

Mr Buffett met Susan at an early age, when she was headed to college to be his younger sister’s roommate at Northwestern University. 

‘He made some sarcastic quip - I hadn’t even met him - so I made one back and I thought “Who is this jerk?”’ Susan said in a 2004 interview with Charlie Rose. 

The new group: Warren and Astrid Buffett walk with his daughter Susan who hosted their 15-minute wedding ceremony at her Omaha house
The new group: Warren and Astrid Buffett walk with his daughter Susan who hosted their 15-minute wedding ceremony at her Omaha house

Mr Buffett then pursued Susan and she eventually relented, leading to a marriage in 1952. The couple had three children- Susie, Howard, and Peter- and lived in Omaha as Mr Buffett grew his business, Berkshire Hathaway, into one of the country’s biggest investment firms. 

Then, in 1977, Susan decided that she wanted to move away in an effort to pursue her own life and a career as a singer. 

‘You know I would like to have a place where I could have a room of my own,’ she said in the interview with Mr Rose. 

Before she left, Susan told her friend Astrid Menks to check in on Mr Buffett during her absence, saying that his financial savvy did not always translate into social skills.
‘I called Astrid. I said “Astrid, will you take Warren, make him some soup, go over there and look after him?”’ Susan said. 

Bright future: Astrid and Warren got married in 2006, two years after Susan died and almost 30 years after they started their relationship
Bright future: Astrid and Warren got married in 2006, two years after Susan died and almost 30 years after they started their relationship


Life partners: Even after Susan (right) moved to San Francisco in 1977, the couple stayed as close as ever and never split up
Life partners: Even after Susan (right) moved to San Francisco in 1977, the couple stayed as close as ever and never split up

Astrid and Mr Buffett then started a relationship, and that was fine by Susan. All three were very aware of their set-up and it seemed to work happily for all parties involved.
They even sent out joint Christmas cards every year with their three names at the bottom. 

Mr Buffett never divorced Susan and only married Astrid two years after her death. 

The most recent tears that Mr Buffett shed over Susan are certainly not the first, as he was known to cry for hours during her prolonged battle with oral cancer. 

Family values: Mr Buffett (center right) is joined by (L-R) son Howard, daughter Susie and son Peter at a Berkshire Hathaway event
Family values: Mr Buffett (center right) is joined by (L-R) son Howard, daughter Susie and son Peter at a Berkshire Hathaway event

One big, happy family: (L-R) Buffett's daughter Susie sits beside her dad and mom Susan at a business function in 1997
One big, happy family: (L-R) Buffett's daughter Susie sits beside her dad and mom Susan at a business function in 1997

During her treatment, when she could not eat solid foods, Mr Buffett would cut himself down to 1,000 calories a day in solidarity, and would sit with her and watch episodes of Frasier in the San Francisco hospital room. 

He could not force himself to attend her funeral because he would become too upset thinking about her and trying to keep a brave face. 

Mr Buffett frequently attributes his success and his political consciousness to Susan, which can still be seen today as he continues to champion the cause of getting the super-wealthy to give back through charity and involvement in government. 

Living arrangements: When Susan moved to San Francisco, Astrid then started a relationship with Mr Buffett and the three were all very happy
Living arrangements: When Susan moved to San Francisco, Astrid then started a relationship with Mr Buffett and the three were all very happy


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BLOOMBERG: Gates Foundation Trust Sells 3.2 Million Berkshire B Shares

By Andrew Frye, January 13, 2012, 5:53 PM EST
 
Jan. 13 (Bloomberg) -- The Bill & Melinda Gates Foundation Trust sold 3.2 million Class B shares of Berkshire Hathaway Inc. to comply with federal tax rules limiting holdings by private foundations.
The shares were sold from Nov. 14 through Jan. 12, according to a regulatory filing today.

Berkshire Chairman and Chief Executive Officer Warren Buffett makes annual donations to the foundation, which works to reduce hunger, fight disease and improve education. Class B shares closed today at $77.77.

--Editors: Dan Kraut, David Scheer

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BLOOMBERG: BYD Co. Said to Plan Sale of 3 Billion Yuan of Bonds in China

 

BYD Co., the Chinese automaker part- owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), plans to sell 3 billion yuan of bonds, according to a person familiar with the matter, who asked not to be identified because the details are private.

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FORBES: Why Warren Buffett Disdains The Private Equity Crowd


1/14/2012

The Oracle of Omaha has never retreated from his long standing revulsion at  the Leveraged Buyout Crowd who tried to camouflage their profession by calling themselves  The Private Equity Crowd.    He and his curmudgeon partner Charlie Munger also show their disdain for Mitt Romney’s  wheeling and dealing at Bain  Capital . by calling the Private Equity Crowd The  Two and Twenty Crowd for the obscene 2% management fees and 20% carried interest  The Private Equity Crowd demand for their services.( A recent report said Bain even charged  a 30% carried interest fee, which brings PE to a new level of high class greed, if there is such a thing)  Carried interest sounds a harmless concept, as if the borrower was somehow a charity case– as in being ” carried.” Sounds almost philanthropic.

Just recently Buffett told Time Magazine that “ I don’t like what private equity firms do in  terms of taking every dime they can and leveraging (companies) up so that they really aren’t equipped, in some cases, for the future.”

More generally Buffett always includes a  pungent blast at The Private Equity Crowd in his letters to shareholder. Just last year  Buffett stuck it to the Private Equity Crowd for changing their “moniker” from “leveraged-buyout operators” to “private equity,” which you may notice no longer has the attribute “leverage” in its name.  He has always sworn never to buy a company from the PE Crowd– as it doesn’t have the long-standing management-owner nucleus long associated with it.

Calling this “Orwellian”: Buffett wrote that “private equity” is a “name that turns facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure compared to that previously existing.”

In other words its “Orwellian” because in point of fact there is less private equity and more dangerous debt piled on them. ” A number of these acquirees are now in mortal danger because of the debt piled on them by their private-equity buyers,” Buffett wrote.

“ It’s a lopsided system whereby 2% of your principal is paid each year to the manager(ie Bain  Capital) even if he accomplishes nothing– or, for that matter, loses you a bundle– and additionally 20% of your profit is paid to him if he succeeds.”

Now, The Private Equity Crowd– as personified by Mitt Romney’s quest for the White House, has become the vivid and telling controversy over the future of finance Capitalism. It is an issue closely related to the income disparity between rich and poor, between the 1% on Wall Street and the 99% on Main Street.
Romney is being attacked by his rivals in the Republican party and will be assaulted by the notion of his greed during the days he ran Bain during the general campaign, should he, as seems likely, win the nomination.. That’s why such highly respected and influential pundits as  David Brooks  of the New York Times, Mark Shields, a syndicated columnist on  PBS and Peggy Noonan in the Wall Street Journal are calling on Bain to articulate his views on  the unfair ramifications of finance today and relate it to what Romney promises to do once he’s in the White House– profuse claims of creating new jobs in the economy. Trust me, his Private Equity Model isn’t going to create any new jobs. In the first instance, it’s going to reduce them.

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FORBES: Warren Buffett's Big Earnings Week


Warren Buffett speaking to a group of students...
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1/13/2012 @ 3:49PM

With earnings season kicking into high gear, dozens of companies from across the market spectrum are slated to step up to the plate in the coming week.

In their reports, these firms will provide important insights into how they fared over the past three months as well as what they expect to see as we progress further into 2012.

Fans of Warren Buffett should have their eyes set on the earnings calendar in the coming days as a number of the investor’s top portfolio holdings take the spotlight. While, given his long- term investing horizon, a single quarter’s showing will likely do little to impact Buffett’s investment decisions, these showings will be interesting to watch for his followers.

Wells Fargo (WFC) will kick off the week’s festivities when it releases its report on Tuesday. For decades, the California-based financial titan has been a staple of the Berkshire Hathaway (BRK.A) investment portfolio. Currently, the firm is the third largest holding, representing a nearly 15% slice of its assets.

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BLOOMBERG: Wells Fargo Posts Record Profit, Citing Mortgage Lending

 January 17, 2012 9:18 PM

Jan. 17 (Bloomberg) -- Wells Fargo & Co., the largest U.S. bank by market value, posted record profit for the fourth quarter and full year that beat analysts' estimates as mortgage financing improved.

Net income rose 20 percent in the quarter to $4.11 billion, or 73 cents a share, from $3.41 billion, or 61 cents, a year earlier, the San Francisco-based company said in a statement today. That exceeded the 72-cent estimate of 31 analysts surveyed by Bloomberg. Revenue declined 4 percent to $20.6 billion, better than the $20 billion forecast by analysts. For the year, net income climbed 28 percent to $15.9 billion.
“I'm extremely pleased with Wells Fargo's performance in 2011,” Chief Executive Officer John Stumpf said in the statement, citing growth in deposits and loans. The bank plans on “returning even more capital to our shareholders.”

Slowing economic growth, low interest rates and volatile capital markets have sapped revenue at the largest U.S. banks, leading them to seek other sources and cut expenses. Stumpf, 58, reduced his staff by 3 percent to 264,200 and reaffirmed plans to trim $1.5 billion in quarterly costs by the end of this year.

New Mortgages
New mortgages rose 35 percent to $120 billion from the three months ended September at Wells Fargo, the biggest U.S. home lender. Net interest margin, the difference between what the bank pays for funds and what it earns on loans and securities, climbed to 3.89 percent from 3.84 percent in the third quarter.

Compared with the third quarter, “the net interest margin went up, revenues were up,” Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, told Betty Liu on Bloomberg Television's “In the Loop” today. “These were two things that people really look at out there, and they showed really good numbers.”
Some year-over-year comparisons weren't as favorable, with the net interest margin narrowing from 4.16 in 2010's fourth quarter and pretax, pre-provision profit dropping 1 percent. Management calls the latter figure a useful gauge of the company's ability to generate capital to cover losses through a credit cycle. Income was boosted by a release of $600 million from reserves, with the bank predicting more of the same during 2012. Noninterest income from mortgage banking dropped 14 percent from a year earlier as originations slipped 6 percent.

Shares Gain
Wells Fargo shares advanced 0.7 percent to $29.83 in New York. The company became the most valuable U.S. bank even after last year's 11 percent stock decline, because most rivals fell further. The lender's market value of $156.1 billion as of last week compares with $136.5 billion at JPMorgan Chase & Co. and was more than the value of Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. combined.

Berkshire Hathaway Inc., the investment and holding company run by Chairman and CEO Warren Buffett, is the biggest Wells Fargo shareholder, with a stake of about 6.9 percent.

The bank finished absorbing Wachovia Corp., the lender saved from collapse in 2008 when Wells Fargo beat Citigroup Inc. in a bidding contest. Stumpf said future deals are likely to be domestic, “bolt-on acquisitions,” using a term for takeovers that fit with a company's existing operations or expand in nearby regions, rather than venturing into a new field.

Tire-Kicking
“We are kicking lots of tires and we are in a unique position in that we are not capital constrained and can do some things that make good sense for us economically,” Stumpf said during a conference call with analysts. “It'll have to make a lot of sense for us, and if all we get out of this is sore toes, that's fine.”
Banks including Wells Fargo have fallen short in efforts to replace revenue lost to new financial rules such as those capping debit-card interchange fees. Wells Fargo reported a $365 million decline in debit-card interchange fees, partially offset by more fee income from credit cards.

The bank canceled plans last year to charge $3 monthly for using its debit cards after customers in a five-state pilot program protested, and Bank of America abandoned a proposed $5 fee.

Wells Fargo is facing claims from mortgage-bond investors. A bondholder group that won an $8.5 billion settlement from Bank of America said this month it may also seek payments from Wells Fargo on more than $19 billion of residential mortgage-backed securities issued by affiliates of the bank.

Building Share
Wells Fargo has pursued more home lending even as rivals shy from the business, according to Stumpf. “We like the mortgage business,” he said on the conference call.

A retreat “makes absolutely no sense to us,” said Chief Financial Officer Tim Sloan in an interview. “There are lots of reasons to look at a business and get upset about it,” Sloan said. “This is a great opportunity for us and we have been building share throughout this entire time.”

Non-interest expenses rose to $12.5 billion in the fourth quarter from $11.7 billion in the three months ended September on higher compensation and foreclosure costs, according to the statement.

Wells Fargo may seek to return more capital to shareholders this year. The bank may boost its quarterly dividend from 12 cents to 20 cents this year, according to Edward Najarian, an analyst at International Strategy & Investment Group Inc. He has a “buy” rating on Wells Fargo.

JPMorgan, the largest bank by assets, said last week that fourth-quarter net income slid 23 percent to $3.73 billion. Bank of America, based in Charlotte, North Carolina, will probably post $1.63 billion in profit on Jan. 19, according to 13 analysts surveyed by Bloomberg. New York-based Citigroup said today fourth-quarter income dropped 11 percent.

--Editors: Rick Green, Dan Kraut

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TIME.COM: Warren Buffett Ready to Take Republicans’ Tax Challenge

Mark Seliger for TIME
Mark Seliger for TIME
Warren Buffett is ready to call Republicans’ tax bluff. Last fall, Senator Mitch McConnell said that if Buffett were feeling “guilty” about paying too little in taxes, he should “send in a check.” The jab was in response to Buffett’s August 2011 New York Times op-ed, which made hay of the fact that our tax system is so unbalanced, Buffett (worth about $45 billion) pays a lower tax rate than his secretary. Senator John Thune promptly introduced the “Buffett Rule Act,” an option on tax forms that would allow the rich to donate more in taxes to help pay down the national debt. It was, as Buffett told me for this week’s TIME cover story, “a tax policy only a Republican could come up with.”


Still, he’s willing to take them up on it. “It restores my faith in human nature to think that there are people who have been around Washington all this time and are not yet so cynical as to think that [the deficit] can’t be solved by voluntary contributions,” he says with a chuckle. So Buffett has pledged to match 1 for 1 all such voluntary contributions made by Republican members of Congress. “And I’ll even go 3 for 1 for McConnell,” he says. That could be quite a bill if McConnell takes the challenge; after all, the Senator is worth at least $10 million. As Buffett put it to me, “I’m not worried.” (See below for a statement from McConnell’s office.)

Listen to Buffett’s retort to McConnell’s contribution theory:


(PHOTOS: The Life and Career of Warren Buffett)
Buffett doesn’t want to sound ungrateful, especially since McConnell and other Republicans have lobbied to keep taxes low for the über-rich, saving him between $6 million and $7 million this year. Oddly, though, conservatives can’t seem to make up their mind about taxes. On Wednesday in the Wall Street Journal, supply sider Arthur Laffer bashed Buffett for, among other things, shielded income, because he doesn’t pay taxes on unrealized capital gains (currently taxed at 0%) or charitable contributions (which are tax deductible). “Well, I had a net unrealized loss in 2011,” says Buffett. “But if Arthur has a plan for how he wants to tax unrealized capital gains, I’d love to hear it — it’s an interesting thing for a Republican to put forward!”

If Buffett had his way, he’d pay more than the 17% rate he currently forks over on his net adjusted income — and he’d have the government put that additional money to work by making sure that whatever portion of the 99% that isn’t thriving in the market economy gets some help. As Buffett wrote in Fortune a few years back, “I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions.”

Listen to Buffett discuss why a capitalist system should take care of good citizens:

Buffett doesn’t want to hobble capitalism. He just wants to give it a heart. And he says the way to do that is to change our tax policy to ensure that people who earn their money from investments rather than by working for a paycheck contribute their fair share. “We need a tax system that takes very good care of people who just really aren’t as well adapted to the market system and to capitalism but are nevertheless just as good citizens and are doing things that are of use in society.” Note to bond traders: your higher taxes should help subsidize the building of bridges and the running of state-sponsored day-care centers.
Buffett has plenty of other prescriptions for America — from more progressive consumption taxes to penalties for errant corporate directors to an overhaul of health care. He’s also got a few choice words for the Republican field and their ideas about bootstrapping and “merit” economies: “This whole business about [Newt] Gingrich going down to Occupy and saying, ‘They ought to be getting a job,’ that’s just … you know, maybe they can be historians for Freddie Mac too and make $600,000 a year.” When I ask whether Mitt Romney is a job creator or destroyer, Buffett says that while businesses shouldn’t keep people they don’t need, “I don’t like what private-equity firms do in terms of taking out every dime they can and leveraging [companies] up so that they really aren’t equipped, in some cases, for the future.”

(SPECIAL: See Warren Buffett in TIME’s List of the People Who Mattered in 2011)

Listen to Buffett explain why education can’t solve all the U.S.’s problems:

Despite Buffett’s disenchantment with conservatives and partisan politics, he’s more than ever a bull on America’s future. What would Warren do to get the U.S. back on track? Read TIME’s cover story this week, available Thursday morning online and Friday on newsstands, to find out.

Listen to Buffett talk about why housing will bounce back:

(MORE: What Politicians Have to Lose — and Gain — from the “Buffett Rule”)

Listen to Buffett discuss the tensions between the U.S. and China:

UPDATE: Don Stewart, a spokesman for Senator McConnell, provided the following response to Buffett’s remarks:
Sen. McConnell says that Washington should be smaller, rather than taxes getting bigger. And since some, like President Obama and Mr. Buffett, want to pay higher taxes, Congress made it possible for them to call their own bluff and send in a check. So I look forward to Mr. Buffett matching a healthy batch of checks from those who actually want to pay higher taxes, including Congressional Democrats, the President and the DNC.
Share Investor Links

Share Investor Blog - Stockmarket & Business commentary
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Read the full transcript of the March 2 Squawk Box Interview with Warren Buffett
Download the 2010 Berkshire Hathaway Annual Report
Download the 1977 - 2010 Warren Buffett Letter's to Berkshire Hathaway Shareholders

Warren Buffett Books @ Amazon

Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive AdvantageWarren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett
Buy new: $16.47 / Used from: $7.36
Usually ships in 24 hours
The Warren Buffett Way, Second EditionThe Warren Buffett Way, Second Edition by Robert G. Hagstrom
Buy new: $10.17 / Used from: $2.29
Usually ships in 24 hours