Eleven ways Warren Buffett is lying about Warren Buffett

The president is basing a new law off of Warren Buffett.  This means that we are basing US tax policy on what is happening to the top 0.0000006% of people.  Does that seem sensible?

Regardless, Warren has been trotting out this point about his secretary for years.  Unfortunately, when Warren talks about Warren’s secretary, Warren lies about Warren’s secretary.  Here is his definitive statement about the situation from as far back as I can find it:

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.

The President says that those who defend this situation “ought to have to answer for it.”  Fair enough.  Short answer: Warren Buffet is lying.  Much longer answer: 10 points.

  • Most simply, Warren Buffett is almost definitely lying about the tax rate of his secretary.  Now, it’s possible to pay any tax rate if you really want to, by paying more than is required.  You can just send in a check.  Since Warren apparently refuses to do that, let us dismiss that option for his secretary.  The typical person making between 50-75k, according to this IRS tax data, pays an effective rate of about 14%.  14% is less than 30%.  Even adding on payroll tax, it’s nowhere near 30%.  CBO data, including payroll taxes, shows that someone making about $64,000 per year pays a total effective rate of around 14.3%.  We asked an accountant to run the numbers in general for someone like Buffett's secretary.  The results: if they were single, 14%.  If married, 7.6%.
  • Buffett is comparing two different taxes. One is a tax on income, one is a tax on investments.  They are two different taxes on two different things.  Want another scandal?  Warren Buffett pays less in sales tax than his secretary does in income tax.  We better write another law.

  • Warren Buffett has already been taxed on that money.  Here’s an oversimplification to explain what I mean.

You earn $100 in salary.

TAX #1: Uncle Sam takes $35, leaving you with $65.

You then invest that $65, and that investment earns 10% or $6.50.

TAX #2: Of that new $6.50, Uncle Sam takes another $1.

Now, add up the earnings: the original $100 + $6.50 = $106.50.

And, add up the taxes: $35 + $1 = $36.

On $106.50 in earnings, you were taxed $36, or 33.8%,-- about double the rate Warren Buffet claims he’s paying.  This gets more complicated with margin, outside investment, and a million other variables, but this how it works in general.  (Dividends are worse: you get taxed on initial income, the company gets taxed on their profits, then when they give you a slice, it gets taxed again.)

So, how does Buffett justify his low tax numbers?  He acts as if TAX #1 never occurred.  Then he tells you that the rate of TAX #2 is too low.  It's a completely disingenuous shell game.

  • Buffett is an exception to the rule of the mega rich. While he earns around 90% of his income at the lower rate through investments, the typical person who earns more than $10 million per year only earns about 38% of their cash at that rate.  Sure, someone who is mega rich is an exception to the rule.  But, Buffett is an exception to that exception.  Basing a rule on his experience is not sober policy making.
  • Buffett's secretary is an exception to the rule of secretaries. She/he makes $60,000 per year.  While I'm not exactly blown away by Buffett's generosity in his pay-scale either, the average secretary makes about $33,000 per year.  Instead of the 14% tax rate of Buffett's secretary, the typical secretary pays more like 10%.   This information makes something like this, even dumber than you previously thought.

  • Rich people pay far more than the middle class in both total dollars and percentage terms.  Don’t take my word for it, listen to the Associated Press: “This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes...Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.”  Those numbers aren’t even close to what Buffett is claiming.  Did I mention he is lying?  (Quick side note—a tax is nothing but a fee you pay to the government to run the structure that maintains society.  In theory, each person has equal access to government services. Even in Buffett’s (false) example, he's claiming that he pays over $8 million, and his secretary pays $18,000 for the privilege of living here. Does that really sound so unfair even if it was true?  (It is not.))
  • Rich people already carry far more of the burden than the poor or the middle class. The top 10% of tax payers carry 73% of the income tax burden.  The bottom 51% of tax payers carry 0%.
  • The Buffett rule has nothing to do with wealth.  The "problem" Obama is describing is a "problem" with professional investors, not rich people.  To get a rate of 17.7% on your income as Warren Buffett, you have to earn roughly 90% of your earnings from investments.  But, you don’t have to make tens of millions for this to happen.  Anyone who makes 90% of their money from investments could theoretically pay right around 15% whether they earn $50,000 or $50,000,000.  Yet, Obama just keeps talking about rich people.  This is one way to be completely sure this is really about class warfare, not tax policy.

  • Obama's rule doesn’t actually target people like Buffett.  Forget everything we’ve talked about here for a second and strip things down to the core.  The claims about secretaries are just false.  But, in theory, someone making $1 million could complain that he pays a rate that is slightly higher than someone making $11 million. Those 7 figure earners are victims to the tyranny of the 8 figure earners!  Cry for them!  In other words, the really rich get slightly screwed as compared to the really REALLY rich.  But Obama’s rule, just targets anyone making $1 million or more—the rule actually "screws" the people being "screwed" most by the “problem.”
  • The rate on investments should be lower than the normal rate...for many reasons (see #3 and #10 for example).  But in addition to those: when I go to work, I receive a salary.  When someone earning their living through investments goes to work—they may LOSE money.  It’s wonderful to focus on the ultra-rare person like Warren Buffett who is so successful that he/she is able to acquire tens of billions of dollars.  But the average person who invests might just bet wrong and get hammered.  When he/she bets right, it makes sense that he/she gets taxed at a lower rate.  They’re playing a different game than you and I, and therefore pay a different tax.
  • Lowering the capital gains tax, brings in more revenue. Even the media understands this.  Charlie Gibson, not a guy who is up for a job at the Heritage Foundation, asked Obama this question in one expand=1] of his debates with Hillary Clinton:

CHARLIE: Alright, you have however said you would favor an increase in the capital gains tax. As a matter of fact you said on CNBC and I quote, “I certainly would not go above what existed under Bill Clinton which was 28 percent”. It’s now 15% that’s almost doubling if you went to 28%.  But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent and George Bush has taken it down to 15%  and in each instance when the rate dropped, revenues for the tax increased. The government took in more money and in the 1980s  when the tax was increased to 28% revenues went down. So why raise it at all? Especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well Charlie what I said is that I would look at raising the capital gains tax for purposes of fairness.

Obama is claiming that he wants this change to create jobs in a jobs bill, but he's really trying to implement his version of "fairness."  Those are two competing interests, and the unemployed will feel the weight of his indecision.

I suppose some of these aren't Warren's lies, instead just lies/falsehoods/exclusions/spin by the media--but you get the point.

By the way---has anyone else noticed Buffett’s slight change in argument?  He’s been arguing forever that he paid a higher rate than his secretary.  His latest op-ed that started this up all over again never mentions his secretary.  Obama keeps saying it.  Warren does not.  He's now saying he's taxed more than other people in his office.  While I assume that his “secretary” works in his office, when someone is being this slimy, I wouldn’t be surprised if he’s attempting to intentionally weasel himself out of the original claim.  Sort of how he's trying to weasel out of his taxes.

*I was initially going to use this post to take on the ridiculous Politifact "true" rating for Warren Buffett.  But, they are barely defending that themselves anymore, so I'll give them a pass.

Critical race theory: The education trap

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The fall semester isn't far away. If you aren't prepared for that, someone else is. Predatory behavior. The most important takeaway from this piece is, whatever is happening on campuses right now is what is going to play out through the rest of society in about 30 years. We're seeing it right now with Critical Race Theory.

It started on the campus. It started in the classroom. And our children are set to be the next victims in the cultural warfare for a nightmare that seems like it will never end.

Colleges are manipulating the system.

It's a little ironic that colleges are overflowing with Marxist professors who preach the Gospel of Karl Marx in their classrooms, because academia in America is the perfect example of capitalist achievement. If anything, colleges are manipulating the system in a way that should make Marxists furious. And they hurt the people that Marxism is supposed to rescue.

Colleges are an enterprise. They are Big Business. It means nothing to them to send thousands of students into debt—not if it means the campus will get a new fountain or another office for the Diversity and Inclusion department.

They'll never admit it, but a big part of their problem is that they have put so much into the myth of progress. They can't even admit that it's a myth. Because it's useful to them.

Roger Scruton once said:

Hence the invocations of "progress", of "growth", of constant "advance" towards the goal which, however, must remain always somewhere in the future.

In reality, they don't give a damn about actual progress.

That's how they have turned academia into instruments of social engineering. They use college to change society.

Their purpose is no longer educational. It's social. They're using the classrooms to cause social change.

This post is part of a series on critical race theory. Read the full series here.

On Monday's radio program, Glenn Beck and Stu Burguiere were joined by Pat Gray to discuss "woke" Olympic athletes.

In this clip, the guys discussed how "bravely" some athletes are for threatening to protest the national anthem, for twerking on stage, and for showing off how woke they are.

Glenn reminded America of actual bravery at the Olympics when Jesse Owens won the gold medal at the Berlin Olympics. "He [Owens] was oppressed," Glenn said.

Watch the clip to hear Glenn tell the full story. Can't watch? Download the podcast here.

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Political commentator Bill O'Reilly joined the Glenn Beck radio program on Friday made an important prediction about President Joe Biden's chance of reelection in 2024.

O'Reilly told Glenn that former President Donald Trump was brought down because of COVID. "if COVID had not appeared, O'Reilly stated, "he [Trump] would have won reelection."

O'Reilly went on to predict that like Trump, President Joe Biden would lose reelection because of COVID. People saw a president who could not put out an intelligent fact-based message about COVID and people will remember that," he explained.

O'Reilly later added that "Trump and Biden are one-termers because of COVID."

Watch the video below to catch more of the conversation:

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Critical race theory: Marxism is a religion

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Marx didn't actually tell his followers that the system needed to be destroyed. And it's not what Marx actually believed. Very few Marxists actually understand what Marx laid out.

Marxism isn't a list of demands and instructions. It's Marx's attempt to tell the future. Some of it he got right, most he got wrong. For example, he predicted the rise of automation.

Believe it or not, Marx was not an anti-capitalist. If anything, he revered it.

In a letter to Engels, he complained that too many people misunderstood his message, that his plan is to merge with capitalism. To make it new. He wanted to reify his brand of socialism, reify is a Marxist term, actually. It basically means to make an abstract idea concrete.

Marx didn't hate capitalism. He actually thought it was necessary. And he knew communism would never happen without the aid of capitalism.

Marx didn't hate capitalism. He actually thought it was necessary.

From there, he takes these ideas to some weird conclusions. Horrible conclusions. The main one being revolution.

What does the first phase of the Marxist revolution look like? How will we know if it has started? How can we tell if it's already begun? Marx's idea of the "dictatorship of the proletariat," where the working class would rise up in revolution and earn their freedom.

But what did Marx mean by freedom? Like so much of Marxism, it involves giving up your individuality, in service to the collective: "Only in community with others does each individual have the means of cultivating his gifts in all directions; only in the community, therefore, is personal freedom possible."

That's from his book The German Ideology, which he co-wrote with Friedrich Engels, the guy who paid all of his bills: "Free competition, which is based on the idea of individual freedom, simply amounts to the relation of capital to itself as another capital."

His idea here is that capital ruins any idea of freedom or individuality. And competition is what he uses as proof. In other words, Marx's definition of freedom has nothing to do with actual freedom, freedom as we know it.

He wrote, in Capital: "It is not individuals who are set free by free competition; it is, rather, capital which is set free."

He's saying that Capital manipulates our individual freedom and forces us to exploit ourselves. For someone who didn't believe in God, he sure had some fanciful ideas about the forces that control the universe.

For someone who didn't believe in God, he sure had some fanciful ideas about the forces that control the universe.

Marxists have always argued that capitalism is a religion. That our debt to capital is no different than our debt to God. Critical Theorist Walter Benjamin wrote an entire book called Capitalism as Religion, and wrote that capitalism is "the first case of a cult that creates guilt, not atonement."

There were many strains of socialism before Marx. There were entire movements, named after socialist and anarchist philosophers. But Marx was the one who figured it out, with the help of a rotating cast of people paying for his sloth, of course.

Marx's influence on socialism was so profound that socialism was practically re-named in honor of Marx. Marx has been deified.

He created a utopian society. Very hypothetical. It requires a working class that is devoted to daily readings of The Communist Manifesto.

This assumes that people who work all day — at a real job, where they can't just sit on the couch all day as Marx did — even have the energy to read dense theory when they get home.

Marx made a religion.

This post is part of a series on critical race theory. Read the full series here.