What’s the Buffett Rule on Spending and Investing?

 

President Obama, always on the campaign trail, is now on the road trying to explain why his class warfare strategy is not class warfare. In his State of the Union address, he once again invoked the “Buffett Rule”, which is little more than a fig leaf to allow Obama to raise taxes. But what about some other “Buffett Rules”?

Spending

What is the Buffett Rule on spending? Does Warren Buffett agree with President Obama that we should spend 150% of what we take in? Did Warren Buffett become one of the richest men on the planet by spending 150% of what he takes in and borrowing the shortfall? I think Buffett’s counsel would be to live within our means; don’t spend more than you take in, but I didn’t hear President Obama invoke the “Oracle of Omaha” when he submitted his budget to the Senate that was voted down 97-0. I didn’t hear Obama mention spending at all other than to say some nonsense about cutting spending by $2 trillion over ten years. At the rate we are going that level of spending “cuts” will mean we are $8 trillion deeper in debt ten years from now rather than $10 trillion. We need to cut $1 trillion in spending next year. So let’s hear what Buffett has to tell Obama about spending.

Investing

Warren Buffett is regarded as a masterful investor. What’s the Buffett Rule on investing? President Obama took credit for saving the auto industry. Really? If that is his idea of a good investment why does the price of GM stock have to rise to $52 before the American people’s investment to break even? GM stock is currently trading around $25. How many people are expecting GM’s stock to double in the near future? Or is it more likely that union contracts will once again, drag GM beneath the waves? My research indicates that Warren Buffett does not hold any GM stock. I wonder why? I do know that Warren Buffett made a very tidy profit by investing in Goldman Sachs. Meanwhile American taxpayers, you know, the ones who are under taxed, bailed out that company and many others. How much did Buffett invest in Solyndra? How much money is Warren Buffett investing in high-speed rail in California? Why should the American people believe that someone who has never held a job in private industry (Obama) is suddenly the smartest venture capitalist in America? How big of a portfolio do the real venture capital firms put in the hands of new hire fresh out of college? But this president takes billions of our tax dollars and squanders them on his pet projects and then lectures us how we need to invest in our future when they go belly up. When is Warren Buffett going to tell him to stop?

The Buffett Rule on Taxes

At the State of the Union address we were introduced to the famous secretary of Warren Buffett. She’s the poor woman who pays a higher tax rate than Mr. Buffett on her income. It is estimated that the poor dear makes between $200,000 and $500,000, otherwise she would not be paying double the tax rate of Buffett. That could put her solidly in the top 1% of earners in the country, if she is at the high-end of that range (the top 1% is earnings above $343,000). So Barack Obama actually lamenting that the top 1% is over taxed? Of course not. It is not about who is paying too much, it is about who is not paying enough.

The problem is spending, plain and simple. There are not enough rich people in America, even if taxed at 100% to close the budget gap. What Obama is doing is class warfare. Let’s get people angry enough at the wealthy so that Obama can then link the wealthy to the Republicans and sneak back into a second term.

If Obama thinks he is playing by the rules, Buffett’s rules, then he should at least play by all of them.

 

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

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Warren Buffett’s Downtrodden, Over-Taxed Secretary Just Bought Second Home in AZ, With a Pool

It must be nice to be so oppressed:

Despite a heavy tax burden, Warren Buffett’s secretary last year was able to purchase a second home in Arizona, a residence complete with a swimming pool and a “professional PGA putting green,” according to real estate records.

Debra Bosanek, 55, and her husband Gerald bought the 2100-square-foot home in Surprise, a city outside Phoenix. The Bosaneks paid $144,000 for the four-bedroom, two-and-a-half bath property (the purchase was financed, in part, by a $115,200 mortgage).

Imagine what she could have afforded if she wasn’t paying so much in taxes.

One last thing, turns out this woman makes between $200,000 to $500,000 a year. That’s about the same amount as the Chief of Nuclear Operations at a nuclear power plant I’m familiar with.

By the way, good for her. I’m not begrudging her success at all. I congratulate it, in fact. I wish I could make that much money a year.

I do resent the idea that she’s an every person, someone right out of the steno pool who goes home to a messy house and a stack of bills she can’t handle. That’s just not the story and it’s dishonest.

Hat Tip: Fox Nation

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This Graph Explains Why America Needs School Choice Now More Than Ever

Smart Girl Politics is celebrating school choice this week. You know I am a homeschool dad who thinks the Department of Eduation is at best, a waste of money.

How big a waste of money is public schooling?

Look for yourself:

Spending has more than quadrupled. Test scores remain essentially the same.

Imagine what would happen if parents were allowed to choose where that money went, rather than having government throw good money after bad to feed a machine that is clearly malfunctioning.

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How is Sen. Olympia Snowe Even Considered For Re-Election?

One of the most disliked Republicans by Republicans is Sen. Olympia Snowe from Maine. Time and time again she has voted to the left of the party, sometimes to the left of many Democrats.

This video shows how much of a tool she is for the liberal agenda:

Here’s a press release from the makers of the video:

MAINE – Conservative group ‘Conservative Friends of Dodge’ have released another online viral video entitled, “Senator Olympia Snowe – Obamacare’s Republican Advocate”.

The video notes President Obama’s ‘special tribute’ to Maine Senator Olympia Snowe in helping to pass the Obamacare bill out of committee and into Congress. The video also attacks Senator Snowe on her record of supporting TARP, Wall Street bailouts and being a ‘big government’ advocate.

A spokesperson for the group said: “When the voters of Maine take a long, hard look at Olympia Snowe’s record, there’s no way they’ll be ticking the box with her name on election day. The fact is Maine needs a real conservative candidate. We are delighted to support the transparent and consistently libertarian conservative – Andrew Ian Dodge.”

The video also renames Obamacare, ‘SnObamacare’ in a parody of the ‘Romneycare’ moniker given to Mitt Romney’s Massachusetts health reforms.

They are backing Andrew Ian Dodge for the candidacy. Dodge is well known on the Tea Party circuit in Maine and would be a far more conservative choice for Maine. It amazes me that Snowe is even considered when you look at her record.

I interviewed Dodge at CPAC last year:

If you are from Maine, help me understand why Snowe is still even an option. Please, because I’m at a loss on this one.

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Why Does Joe Biden Hate Indians?

In the 2008 campaign, then Sen. Joe Biden stepped in it in grand fashion when he stereotyped Indians, dots not feathers, as having a monopoly on jockeying a cash register at a 7-11.

Remember this:

It’s easy to write this off as Biden saying he’s touting how successful the Indian immigrants are where he lives.

But then arrives this video of Biden doing an Indian accent as he bemoans their employment doing jobs Americans used to do:

Clearly Biden has something against Indians.

I mean, if it’s enough to paint Rush Limbaugh as racist, it’s double for Joe. I’m sure the Young Turks will be all over this, denouncing Biden as a racists, as they are bastions of intellectual honesty.

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Fisking Lawrence O’Donnell

There is a new graphic that keeps popping up on Facebook, featuring whack-job liberal Lawrence O’Donnell and a quote that leftist’s are slapping up on their Facebook pages, drooling over it a while, then sitting back in self-righteous smugness and saying, “Take that, Rethuglicans.”

Here’s the graphic. I hope you didn’t just eat:

O’Donnell lists those all as if the are collectively good things.

They are not, and some of them are flat out lies.

But first we need to define what we are talking about.  O’Donnell mentions liberals and Republicans, so I am to assume that “liberals” cannot equal “Republicans,” since in his written statement he differentiates between the two.

He also makes the assumption that today’s liberals are the exact duplicate as liberals throughout history.  Clearly that isn’t true, as I’ll explain below.

Therefore, the claim that liberals got black Americans the right to vote is untrue.  It was a Republican president named Abraham Lincoln who was willing to fight the Civil War that resulted in black American being able to vote.  Today’s liberal would have rejected the reason for the war, labeled Lincoln a war monger, and marched against the war with vigor until a Democrat was elected and could take credit for everything Lincoln had done, even the stuff the new President had fought against.

Also, to crush another liberal talking point, it wasn’t Democrats that fought for Civil Rights in Washington and O’Donnell’s assertion that Republicans opposed the Act is a bald faced lie.  Republicans passed the 1964 Civil Rights Bill, over strong opposition from the Democrat Party:

Republicans supported the 1964 Civil Rights Act much more than did the Democrats.  Contrary to Democrat myth, Everett Dirksen (R-IL), the Senate Minority Leader – not President Lyndon Johnson – was the person most responsible for its passage.  Mindful of how Democrat opposition had forced Republicans to weaken their 1957 and 1960 Civil Rights Acts, President Johnson promised Republicans that he would publicly credit the GOP for its strong support.  Johnson played no role in the legislative fight.  In the House of Representatives, the 1964 Civil Rights Act passed with 80% support from Republicans but only 63% support from Democrats.

In the Senate, Dirksen had no trouble rounding up the votes of most Republicans, and former presidential candidate Richard Nixon lobbied hard for passage.  On the Democrat side, the Senate leadership did support the bill, while the chief opponents were Senators Sam Ervin (D-NC), Al Gore (D-TN) and Robert Byrd (D-WV).  Senator Byrd, whom Democrats still call “the conscience of the Senate,” filibustered against the 1964 Civil Rights Act for fourteen straight hours.  At a meeting held in his office, Dirksen modified the bill so it could be passed despite Democrat opposition.  He strongly condemned the Democrat-led 57-day filibuster: “The time has come for equality of opportunity in sharing of government, in education, and in employment.  It must not be stayed or denied.  It is here!”

Republicans are accused of being racists today, but the facts remain the same.  It was Republicans that put the law on the side of the African American.  Now people like O’Donnell, who isn’t so much a liberal as a socialist (admittedly so), will tell you that it doesn’t matter because the racists in the Democrat party all became Dixiecrats and joined the Republican party.

Yeah, because that makes sense.  The people who worked against passage of the bill suddenly turned and joined the party that worked to pass it.

Right.  The facts is, Robert Byrd remained a Democrat until he died, as did Al Gore’s dad and other who fought against the Act.

Other statements made in this graphic are only partly true.  It is true that socialists passed the Social Security, but they had to lie to do it, claiming it as an insurance policy at first, then a tax later.  Sounds a lot like another group of socialists I know.  Even so, did Social Security do what O’Donnell claims?

Did it lift millions of elderly out of poverty?  Here’s one take that supports O’Donnell:

The before-and-after Social Security picture is dramatic. Before Social Security, almost half of elderly Americans had income below the poverty line, reports the Center on Budget and Policy Priorities. Roughly 12 percent of elderly citizens are considered poor today. The program lifted more than 11 million out of poverty — more than 60 percent of those were women.

But then again, facts get in the way of ideology:

But the real reason that half of the elderly lived in poverty before Social Security was that about half of everyone lived in poverty then, for the simple reason that the country was a heck of a lot poorer. Today, the average annual wage is around $43,000. In 1935, the average annual wage in inflation-adjusted terms was around $15,000. Remembering that most households of the 1930s were single-earner and most had kids, the poverty threshold for a family of four in today’s dollars is around $20,000. Tripling real average earnings can do a lot to reduce poverty.

Similarly, one of the Left’s favorite factoids is that without Social Security, half of all seniors today would live in poverty. This makes it seem as if the fall in elderly poverty rates from 1935 to today was purely a function of Social Security benefit payments.

What they really mean to say, of course, is “without Social Security benefits, but with Social Security taxes.” In other words, if we taxed 12.4 percent of Americans’ earnings all their lives and paid them nothing in return, yes, poverty would increase. But in the absence of Social Security as a whole—benefits and taxes—Americans would have more income to save and most would save reasonably responsibly for retirement. (See here for some evidence.) Yes, many are pulled out of poverty either by Social Security’s progressivity or by the simple fact that without a requirement to save they wouldn’t do so on their own. But these are a minority.

The important point is that over the long term it’s not Social Security or other programs that lift people out of poverty or otherwise give them better lives. It’s the growth of the economy, which lifts earnings and standards of living.

However, if you take the left’s position as fact, that Social Security is the reason the elderly are doing better is because of Social Security, how does it square with this:

It was always a point of pride that the combination of Social Security and Medicare drastically reduced elderly poverty. Under the old statistics, just 9% of seniors were seen as living in poverty. However, because the new formula takes into account out-of-pocket medical costs, particularly rising deductibles and prescription drugs, that number has jumped by 2.7 million, and now represents 15.9% of all seniors, roughly 1 in 6. This is consistent with the rest of the population.

Of course, liberal FireDogLake sees the solution in an increase in government benefits.  However, this is not the real solution.  That lies outside the box socialists think inside.

Consider this.  What if the elderly today didn’t have a percentage of their property confiscated for this intergenerational Ponzi scheme, but instead took it and invested it themselves, or saved it?  What would be the probable result of that?

Social Security’s record as a retirement program is equally dismal. According to the Social Security Administration itself, workers born after 1973 will receive rates of return on their taxes ranging from 3.7 percent for a low-wage, single-income couple to just 0.4 percent for a high-wage-earning single male. By comparison, the average rate of return on the stock market since 1926 has been 7.7 percent.

Because it deprives American workers of the ability to invest in private capital markets, the current Social Security system is costing individual American retirees hundreds of thousands of dollars. A single-earner couple whose wage earner is 30 years old in 2000 and earning $24,000 per year can expect to pay more than $134,000 in lifetime Social Security taxes and receive $292,320 in lifetime Social Security benefits (including spousal benefits), assuming that both husband and wife live to normally expected ages. However, had they been able to invest privately, they would have received $875,280. That means the current system is literally almost stealing more than half a million dollars from them.

You go ahead and take credit for that, Lawrence.  I’ll let you have it and the $17 trillion in unfunded liabilities.  I wonder how the elderly will fare when the government collapses under the weight of the financial obligations your liberal programs have put it under.

Speaking of unfunded liabilities, O’Donnell wants to take credit for Medicare too.  Fine with me.

Last week the Medicare trustees reported that the program has an “unfunded liability” of nearly $38 trillion — which is the amount of benefits promised but not covered by taxes over the next 75 years.

How much would the unfunded liability be if liberals would allow tort reform and doctors weren’t terrified of malpractice lawsuits and were more likely to volunteer at a charity hospital?  Let me calculate that a second…carry the two…turns out it’s zero.  So liberals create a program that is unConstitutional, is a giant burden on the budget and rife with fraud, and want credit for it.

Fine with me.  I’ll stick with charities where I am not forced to surrender my property and my money actually goes where I intended it to go, instead of to some criminal collecting millions in Medicare checks.

Finally, the Clean Air Act and the Clean Water Act are really not as shiny and happy as liberals would like up to believe.  First of all, they are part of the bureaucratic leviathan that is the EPA.  Second, they cost businesses in America billions of dollars every year, and not just in fines.  These acts create legions of government inspectors who are ready, willing and able to swoop in and perform inspections at any time.  Businesses have to spend money on people who are trained to deal with these people and insure the business is up to code.

And now, the liberals want to use the Clean Air Act to regulation carbon dioxide emissions.  It’s a classic example of government growth and tyranny that liberals cling to like a teddy bear that a child uses to make him feel safe when the closet door creaks at night.

Have they improved the air and water quality in American?  Yes.  Have they probably saved lives?  Definitely.  Did they need to be done on a federal level and is it really constitutional?  Not so much.

States could have, and most likely would have enacted similar regulations to protect people.  Which is a diametric opposite of why liberals enact policies like this.  They do it to stop growth.  Why do you think they are out looking for a snail darter or owl?  They don’t care about the owl?  They care about stopping corporate expansion.

Sure, there might be some who want to snuggle up to the talons of a barn owl, but they are the useful idiots of the socialists who want a central government to plan the marketplace.

This statement by O’Donnell isn’t at a minimum, factual, save for the part about women’s suffrage.  It appears liberals did lead the charge on that.  Nice work.  Especially the way they accomplished it, which is antithetical to everything a liberal believes in today.  You see, they worked hard and amended the Constitution.  A modern liberal would have just shopped around for an activist judge and taken the case to federal court.

Amendments are so 20th Century.

The rest of O’Donnell’s claims are examples of complete failures of liberal, aka socialist, policies that have not helped the country become wealthier, but have in fact placed them under greater control by a massive central government.  If he wants a badge to wear around because he’s a proud socialist, that can happen.  Socialist governments have done it before.

 

 

 

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36 Obama Staffers Owe Nearly A Million Dollars in Their “Fair Share”

It should not come as a surprise, considering the trouble he had when he was appointing people, that there are 36 people in the Obama executive staff that owe nearly a million dollars in taxes, also known as, their fair share:

A new report just out from the Internal Revenue Service reveals that 36 of President Obama’s executive office staff owe the country $833,970 in back taxes. These people working for Mr. Fair Share apparently haven’t paid any share, let alone their fair share.

Previous reports have shown how well-paid Obama’s White House staff is, with 457 aides pulling down more than $37 million last year. That’s up seven workers and nearly $4 million from the Bush administration’s last year.

Nearly one-third of Obama’s aides make more than $100,000 with 21 being paid the top White House salary of $172,200, each.

The IRS’ 2010 delinquent tax revelations come as part of a required annual agency report on federal employees’ tax compliance. Turns out, an awful lot of folks being paid by taxpayers are not paying their own income taxes.

When you look at his billionaire buddy Buffett’s outstanding tax bill, we approach nearly $2,000,000,000 of fair share unpaid. we pass a billion dollars in unpaid fair share.

This once again proves the statement of Andrew Wilkow true. Socialism is for the people, not the socialist.

Update:  For some reason I read this as saying they executive staff owed nearly a billion dollars.  I misread it.  They owe nearly a million.  I made changes to reflect that.

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What Bastiat Thinks Of 30 Companies Paying More for Lobbying Than in Taxes

Yesterday I wrote about the fact that 30 companies in American paid more for lobbying than they did in taxes. I wrote:

It’s wrong because we have a federal government that has it’s finger in every possible pie it can get into, forcing the pie maker to spend money to protect themselves. Rather than expanding the business with that money, the business finds it necessary to instead get a politician to fight to protect their business.

It’s also wrong because often, the business isn’t as innocent as that above paragraph and have politicians working to enact legislation that not only protects their business, but hurts their competition.

I knew I had read this somewhere before. I thought it was in Steve Forbes’ book, How Capitalism Will Save Us, and it may have been. However, r/libertarian reminded me of where I originally read this. The Law by Frederic Bastiat, who wrote more clearly and more concisely when he said:

“As long as it is admitted that the law may be diverted from its true purpose — that it may violate property instead of protecting it — then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder.”

That’s exactly why these companies paid more for lobbying than in taxes. If you have not read The Law, you can get a free pdf here and a Kindle copy here for under a buck. I personally recommend the audio book. It’s very well done.

In fact, it’s time for me to re-read it.

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