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Warren Buffett’s taxes: the more complicated narrative

In the second presidential debate, Donald Trump indicated that Warren Buffett had deducted, for federal income tax purposes, net operating losses in a manner similar to Trump’s deduction of his net operating losses. In response, Buffett, an outspoken supporter of Hillary Clinton, released a summary of Buffett’s 2015 federal tax return. Buffett’s intended message was clear: Trump didn’t pay federal income taxes; I did.

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Warren Buffett, Taxes, FICA and Social Security

By Edward Zelinsky
Warren Buffett has again called on Congress to raise federal taxes on affluent taxpayers. In an opinion piece in the New York Times, Mr. Buffett urged Congress to increase federal taxes on taxpayers with annual incomes greater than $1,000,000. As he has in the past, Mr. Buffett contrasted his effective tax rate with

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The Buffett Rule President Obama ignores

By Edward Zelinsky
Like many of us, President Obama is a Warren Buffett fan. Most prominently, the president advocates, as a matter of tax policy, the so-called “Buffett Rule.” This rule responds to Mr. Buffett’s observation that his effective federal income tax rate is lower than the tax rate of Mr. Buffett’s secretary. In President Obama’s formulation, the Buffett Rule calls for taxpayers making at least $1,000,000 annually to pay federal income tax at a 30% bracket.

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The Buffett Rule debate: A guide for the perplexed

By Edward Zelinsky
Although he had said it before, Warren Buffett struck a nerve with his most recent observation that his effective federal tax rate is lower than or equal to the effective federal tax rates of the other employees who work at Berkshire Hathaway’s Omaha office. Mr. Buffett’s observations have provoked extensive comments both from those supporting his position (e.g., President Obama) and those critical (e.g., the editorial writers of the Wall Street Journal). In response to Mr. Buffett’s remarks, President Obama has promulgated what he calls “the Buffett Rule,” namely, that those making

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My advice to Mr. Bezos: pay some tax

Jeff Bezos, the billionaire founder of Amazon, has asked on Twitter for advice about the use of his fortune for philanthropy. My advice is that Mr. Bezos should pay some tax. Contemporary attention to philanthropy is largely attributable to the admirable work of Warren Buffett and Bill Gates, Jr. The Giving Pledge, Buffett and Gates have commendably encouraged rich individuals in the US and abroad to devote much of their wealth to charity.

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The continuing benefits (and costs) of the Giving Pledge

The recent news about charitable contributions in the United States has been encouraging. The Giving Pledge, sponsored by Warren Buffett and Bill Gates, Jr., recently announced that another group of billionaires committed to leave a majority of their wealth to charity. Among these new Giving Pledgers are Judith Faulkner, founder of Epic Systems; Hamdi Ulukaya, founder of Chobani Yogurt; and Brad Keywell, a co-founder of Groupon.

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The Oracle of Omaha warns about public pension underfunding

By Edward Zelinsky
As the American public debated the legislation ultimately enacted into law as the American Taxpayer Relief Act of 2012, no person was more influential than the Oracle of Omaha, Warren Buffett. Much attention was given to billionaire Buffett’s complaint that his federal income tax bracket was lower than his secretary’s tax rate. President Obama invoked “the Buffett Rule” to bolster the President’s successful effort for the Act to raise income tax brackets for high income taxpayers.

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The Giving Pledge and private foundations

By Edward Zelinsky
The Giving Pledge, founded by Warren Buffett and Bill Gates, has announced that eleven more affluent families have taken the Pledge and have thereby committed to donating at least half of their wealth to charity. Among these new Pledgers is Gordon Moore, a legendary founder of Intel and the father of Moore’s Law which postulates that the number of transistors on integrated circuits doubles roughly every two years.

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The growth of the Giving Pledge and the federal estate tax

By Edward Zelinsky
By taking the Giving Pledge, wealthy individuals publicly commit to contribute “the majority of their wealth to philanthropy.” The Pledge was started by Warren Buffett and Bill Gates, Jr. Recently, twelve more wealthy families signed the Giving Pledge including Elon Musk, a founder of PayPal.

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Amend the “Giving Pledge” to Include the Federal Treasury

By Edward Zelinsky

Sixteen more billionaires have signed the “Giving Pledge” sponsored by Warren Buffett and Bill Gates. Signers of the Pledge commit to donating to philanthropy a majority of their wealth. New signers of the Pledge include the founders of Facebook, Mark Zuckerberg and Dustin Moskovitz.

Critics of the Giving Pledge denounce it as a public relations gimmick. Even if each Pledge signer donates a majority of his fortune to charity, his heirs will still inherent substantial wealth from what remains.

I am not one of these critics. I take Mr. Buffett, Mr. Gates and the other signers at face value and applaud their charitable intentions. I do find it interesting that certain names are absent from the Pledge. For example, despite their

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The rise of passive-aggressive investing

Some good ideas take a long time to gain acceptance. When Adam Smith argued forcefully against tariffs in his 1776 classic The Wealth of Nations, he was very much in the minority among thinkers and policy-makers. Today, the vast majority of economists agree with Smith and most countries officially support free trade. Index investing, sometimes called “passive investing,” has taken somewhat less time to gain acceptance.

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Eroding norms in reinsurance trading: Can it cause industry collapse?

In the face of severe disasters, or ‘Acts of God’, society turns to reinsurance. It is a financial market that insures insurance firms, and thus trades in large-scale disasters. Reinsurance is therefore the backbone for economic and social recovery in times of unimaginable losses, such as Hurricane Katrina or the attack on the World Trade Centre, through enabling insurers to pay their claims.

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Over-consumption in America: beyond corporate power

It is easy enough for critics to trace America’s over-consumption of things like food and fuel to the excess power of our profit-making corporations. Americans consume more food and fuel than Europeans in part because these companies in America are better able to resist taxes and regulations.

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Unequal at birth

Recent events in Baltimore, Ferguson, and other places have highlighted the explosive potential of discrimination and inequality. Much attention has been paid to police practices, the long-term effect of joblessness, and the trauma of the criminal justice system incarcerating large numbers of African-Americans. This focus on the present is understandable. It is also insufficient. There is a need to understand and address the huge disadvantages, and indeed disabilities, imposed on future generations by pre-natal conditions.

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Limit the estate tax charitable deduction

By Edward Zelinsky
One widely-discussed possibility for reforming the federal income tax is limiting the deduction for charitable contributions. Whether or not Congress amends the Code to restrict the income tax deduction for charitable contributions, Congress should limit the charitable contribution deduction under the federal estate and gift taxes. Such a limit would balance the need for federal revenues with the desirability of encouraging charitable giving.

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