An Open Challenge to Warren Buffet

Warren Buffett speaking to a group of students...

So, once again Warren Buffet is pushing the idea that the “Super Rich” should pay much more in taxes than they do currently. My response…

So, what’s stopping them?

Do we really need a bunch of new tax laws enacted (wow, that’s a can-o-worms I would just as soon avoid) to get them to take action?

Tell ya what, Mr. Buffet. Why don’t you get all of the Super Rich together, and come to some sort of agreement about how you want to handle the situation? It would be like some sort of fun Super Rich convention.

You could all agree to do something to bail this country out of its current situation, and then you could all pat yourselves on that back and bask in the praise about how selfless and patriotic you are. It would be amazing!

Here’s some ideas to get you started:

You could all voluntarily add a surcharge of 10% or more to whatever tax amount you have to pay.

You could all send the IRS a check with a note that says, “I am freely giving this to the people of the United States”.

You could all give your high paid accountants a “tax season off” and not take all of your write-offs.

And, perhaps best of all – you could file your tax returns using the standard 1040-A form and just take the standard deductions. Boy, would that do the trick or what? You bet you’d pay – you’d pay a lot more than you do now. It’s an easy solution.

Category: Rants and Raves

34 Responses to “An Open Challenge to Warren Buffet”

  1. Smart Guy Reply

    How Much Does Warren Buffet Owe In Back Taxes? Why Is He Opposed To Paying What He Owes In Taxes? Does He Supp? How much does Warren Buffet owe in back taxes?

    Why is he opposed to paying what he owes in taxes?

    Does he support higher tax rates because he knows that politically connected cronies like him don’t have to actually pay them?

    • The poster boy for the ‘rich need to pay more in taxes’ has been fighting his taxes in court for years now, doesn’t get better than that.

  2. Steven B Reply

    What’s Obama’s Response To Warren Buffet Owing 1 Billion In Back Taxes? Surely President Obama must know that Warren Buffet is not paying his fair share of taxes. Reports indicate Warren is fighting tooth and nail against paying 1 billion in back taxes. Given the incredible hypocrisy of Warren, Mr. Obama must have a great excuse for Warren. Anybody know how Obama is explaining this away?

    • Obama and Buffet have this crony capitalism relationship. Buffet gets up and supports Obama’s higher taxes ploy that will never go through congress and Obama lets Buffet have a sweetheart stock arrangement with Bank Of America.

      What does Obama get out of it? He gets to pretend that he’s after social justice by taxing the rich a bit more and fool simple minded people into thinking the few billion might get would balance Obama’s massive deficit spending.

      The truth is it does nothing to balance the budget, Obama has been forced to acknowledge that.

      Obama has a nice deal with the head of GE too. Bails them out, gives them sweetheart government contracts and regulation help and in return the CEO of GE follows Obama around like a puppy.

      Crony Capitalism. Change and Hope? No, now we are left hoping someone can beat Obama in the fall so we can have change.

  3. Captain king Reply

    Does Warren Buffet Ever Invest In Mutual Funds? I would like to know if whether Warren Buffet ever invests in mutual funds through his company Berkshire Hathaway?

    • No Buffett is the greatest investor who ever lived. I know he makes money by buying companies not funds. If you invested 15 dollars in 1964 in Berkshire you would have 90,000 dollars today.Mutual funds are not for the pros.

  4. Limahkow Reply

    What Company Did Warren Buffet Invested Since Late 2008? I am aware that Warren Buffet invested in several company since the happening of financial crisis in 2008. I remember that his Berkshire bought shares in Goldman Sachs, Johnson & Johnson, and few others. What are those companies that he invested in recently?

    • A General Electric investment (preferred stock) was made around the same time as Goldman. Small investments (for Berkshire) in Harley Davidson, and Tiffany bonds were made.

      A nice $2.6 billion in Swiss Re notes with some convertible features.

      A few hundred million in the Chinese battery and auto company BYD.

      Berkshire made good size investments in Dow Chemical and Wrigley, however these were commitments made before the financial crisis.

      Berkshire recently invested in Becton Dickenson. Given the relatively small amount, it may be that it wasn’t a Buffett investment though.

  5. Success_2_be Reply

    How Valuable Is The Knowledge Of Warren Buffet At Berkshire Hathaway Shareholder Meeting? I have read a few books on Warren Buffet. Now I’m thinking about buying a share of Berkshire Hathaway so I can attend their annual meeting. Is it worth it to attend a Berkshire shareholder meeting to get more insight on investing like Warren Buffet?

    Many say just buy Berkshire stock instead of trying to out perform it. Unfortunately the Oracle of Omaha and Charlie Munger are not going to live forever.

    • I’ve been there a couple of times, bought a ‘B’ share and went, and I enjoyed it. I don’t know that you come away with a lot of hints as to how they do it, but you do get Warren’s and Charlies takes on a lot of different things in the market. The best part of a Berkshire meeting is Warren and Charlie sitting up in front of an arena full of people doing nothing but answering questions for five hours. As far as I know, these questions are not prescreened (maybe they ought to be!!!). A lot of questions will be Berkshire specific, but a lot will be trying to get their take on things going on in the general economy and the world. Often, they will try and frame answers to questions in the context of what Berkshire is doing. How much you get out of it depends on how good the questions are. Last year they got to answer the same question about silver at least three times. There are also always people with agendas in asking their questions. One person asked about Russia, who was undoubtedly invested heavily in Russia and got an answer that they wouldn’t touch it with a 10 foot pole after what happened Yukos. Another asked about how Jeremy Siegel’s latest book changed their philosophy, Charlie replied “I think he’s demented”. Warren then asked if there was anybody they haven’t insulted. I think what you get out of a Berkshire meeting is an idea of how they look at things. My biggest shock as a short term trader was how much our philosophies lined up, other than how long we hold assets (Berkshire virtually never sells anything). I refered to my first trip back there as seeing how the other half lived…turned out it was much the same as me. I’d recommend going…although I don’t know that I’d make it a yearly thing just for their insight. For a financial meeting, it can be pretty entertaining at times.

  6. INewsmaven Reply

    Is It True That Jim Leach And Warren Buffet Play Bridge Together And That Is How Obama Got The Endorsement? Warren Buffet and Jim leach are Bridge Buddies and remember all the hearing of the finance committe when Warren was your expert witness.

    • Obama got the endorsement because Jim Leach was a very Liberal Republican. Probably the most Liberal of the entire party.

  7. Notawanda Reply

    Who Do You Believe Warren Buffet Or G W Bush? Warren Buffet announced this country is indeed in a recession citing his businesses slow downs and a general down turn – “…the economy is going south…”. Our illustrious (Lying) Leader G W Bush says we are not in a recession that the economy is fine-just a little slow. (I think G W Bush is only thing that is a little slow!)
    Sneakysn..I am NOT a liberal! I have voted Republican more than Democrat over the years! I consider myself to be a realist! I merely state what is obvious and assume nothing!(You know what ass u me is known for,don’t you?)

    • Warren Buffet!. He has made gazillions in investing and he does it without dealing under the table.

      If there is one human on the planet who knows the American economy inside out and how it works he is it.

      If he says we are in a recession, we are in a recession.

      ps: To the conservatives who keep claiming that the liberals WANT a recession to make their president look bad.

      Bush already looks bad. Bush already looks like a total buffoon.

      Unlike conservative (bush included) we do not mistake HOW WE WANT THINGS TO BE for reality.

      The days of staying the course and staying on message to invoke the Republican voodoo reality are over. You are over.

      Get with the program or get out of the way.

  8. Ragitha G Reply

    Warren Buffet?

    • I have met this guy and talked to him. I didn’t even realize he was a famous rich guy, even the 2nd time I talked to him. Back in the 80’s I worked for a newspaper in Warren’s city. No one was allowed to enter the newspaper un-escorted, I just happened to be the closest supervisor a couple of times he came in for an interview.

      He is absolutely the nicest guy. You would never guess he is worth as much as he is. He just reminds you of someone’s nice grandpa.

  9. Retta's back Reply

    Did Obama Pay Off Warren Buffet Like He Did Old Man Rooney? Art Rooney, owner of the Pittsburgh Steelers was a life long Republican, all of a sudden, he supports Obama for President! Then lo, and behold, we find out Obama appoints Rooney an Ambassadorship to Ireland! Now warren Buffet is agreeing with Obama that we need ANOTHER STIMULUS, like the first one worked so well! So, tell me what you think Obama bought Buffet off with, it’s not like he needs any more money!
    I know I posted this question earlier today, but YA was so messed up today, it was impossible to do anything on it!
    You people are not paying attention, I said what would Obama pay him off with, since he doesn’t need anymore money! Please read the question before answering next time!

    • Warren Buffet’s wealth is tied up in stocks and bonds. Even though he is still quite wealthy, he has taken about a 20% hit to the value of his portfolio. He is positive on the economy, because he knows if he is negative, the value of his portfolio will drop further. Right now Buffet is like the bosses at Enron – talk up the value of the business/economy, so he can unload some of his stocks before they fall further.

  10. Notawanda Reply

    Who Do You Believe Warren Buffet Or G W Bush? Warren Buffet announced this country is indeed in a recession citing his businesses slow downs and a general down turn – “…the economy is going south…”. Our illustrious (Lying) Leader G W Bush says we are not in a recession that the economy is fine-just a little slow. (I think G W Bush is only thing that is a little slow!)
    Sneakysn..I am NOT a liberal! I have voted Republican more than Democrat over the years! I consider myself to be a realist! I merely state what is obvious and assume nothing!(You know what ass u me is known for,don’t you?)

    • Warren Buffet!. He has made gazillions in investing and he does it without dealing under the table.

      If there is one human on the planet who knows the American economy inside out and how it works he is it.

      If he says we are in a recession, we are in a recession.

      ps: To the conservatives who keep claiming that the liberals WANT a recession to make their president look bad.

      Bush already looks bad. Bush already looks like a total buffoon.

      Unlike conservative (bush included) we do not mistake HOW WE WANT THINGS TO BE for reality.

      The days of staying the course and staying on message to invoke the Republican voodoo reality are over. You are over.

      Get with the program or get out of the way.

  11. John John Reply

    Are Republicans Still Denying What Warren Buffet Said About Taxes For The Rich? Especially when Romeny comes out today and says he only pays 13% in taxes?

    http://finance.yahoo.com/news/romney-paid-least-13-taxes-191600991.html

    • Warren Buffet says the rich aren’t paying enough in taxes and that he and others should pay more.

      I want to see Warren Buffet’s tax returns to see if he’s taken deductions. If he thinks he should pay more he wouldn’t take every deduction he could. In, fact to lead by example (well, he did propose a rule called “The Buffet rule”), he wouldn’t take any deductions.

      So put up or shut up Warren!

  12. Grace Reply

    Who Is Warren Buffet? Why is he famous?

    • Warren Buffet epitomizes the “millionaire next door.” He sets a good example to all Americans who want to figure out how the rich get rich. He started BERKSHIRE Hathaway and has several other companies under his belt, not the least of which is Geico Insurance. He knows how to make money and build wealth by being smart and not blowing his cash. He and his wife live in a very modest home in or near Omaha, Nebraska. Not sure if he still drives to and from work in the family station wagon, but that was the case a few years ago. He’s supposedly very humble and raised his kids to appreciate the value of a dollar. They have been told to expect only $1 million each of Buffet’s multi-billion dollar fortune when he dies. Furthermore, when he dies, his estate will go almost entirely to charity.

  13. Bushliedhisazzoff Reply

    Do You Think Warren Buffet Is For The Average American Or The Rich American.?

    • Well, considering that Warren Buffet builds his businesses by using “Star Bonds” which are taxpayer financed loans from the States where he builds his store. He then arranges stipulations that allow him to use sales taxes collected to repay those loans instead of paying those taxes….It is safe to say that he is for the Average American just so long as they are financing and repaying his wealth machine.

      Anyone who thinks that Warren Buffet is for the Average American is NUTS.

  14. Alphabetsoup2 Reply

    Is Warren Buffet Right, It Is Time To BUY Stocks ? Please see Buffet’s opinion piece published today giving his reasoning linked below…

    http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=1&ref=opinion&oref=slogin

    • Yes, Warren Buffet is correct. Now is the time to buy blue chip stocks like GE and Goldman Sachs and many other companies whose stock prices have been hurt in this negative investing environment. These are the companies that can survive a deep recession (likely to be 18-30 months) and be well positioned to profit when consumer/business/government demand for its good and services increases following the recession.

      But you need to both think and act like Buffet. Buy blue chip companies with excellent management whose stock prices have been knocked down other than for actual fundamental problems in their core business lines. And then be prepared to hold these stocks long term when you can sell at a time when the market favors the growth and dividend performance of these companies.

      Good luck.

  15. Aj_lets_go_shopping Reply

    Who Is Warren Buffet, And Exactly What Does He Do?

    • Warren Edward Buffett (born August 30, 1930) is a wealthy American investor and businessman. Nicknamed the “Oracle of Omaha”, Buffett has amassed an enormous fortune from astute investments, particularly through his company Berkshire Hathaway, in which he holds a greater than 38% stake. With an estimated current net worth of around $42 billion, he is ranked by Forbes as the second-richest person in the world, behind only Microsoft chairman Bill Gates.

      Despite his immense wealth, Buffett is famous for his unpretentious and frugal lifestyle. He continues to live in the same suburban house in Omaha he bought in 1957 for $31,500. His chairman’s salary from Berkshire Hathaway of $100,000 per annum is extremely modest by corporate American standards.

      Biography~~
      Buffett was born in Omaha, Nebraska, to Howard Buffett, a stockbroker and member of Congress, and Leila Buffett. Buffett has two sisters, Doris and Bertie.

      His grandfather owned a grocery store in Omaha, where Charlie Munger, the current Vice Chairman of Berkshire Hathaway once worked.

      He made his first stock purchase at the age of 11, buying Cities Services preferred shares for $38 each. He sold them when the price reached $40, only to see them rocket to $200 a few years later. This taught him the importance of investing in good companies for the long term.

      He attended the University of Nebraska (transferring there from the Wharton School at the University of Pennsylvania) and took a Master’s degree in economics at Columbia Business School, studying under Benjamin Graham, alongside other budding value investors like Walter Schloss and Irving Kahn. Another influence on Buffett’s investment philosophy was the well known investor and writer Philip Fisher.

      After receiving the only A+ Benjamin Graham ever handed out to a student in his security analysis class, Buffett wanted to work at Graham-Newman but was turned down. He went to work at his father’s brokerage as a salesman. A stock he pushed was GEICO. Buffett picked GEICO after noticing Graham was a director and had a large position in it. Never one to buy a stock on a whim, Buffett visited GEICO’s head office on a weekend to investigate further. He knocked until someone opened the door, he was led to the future president of GEICO. Buffett introduced himself as Graham’s student and was given a crash course on the insurance business and what gave GEICO an advantage over their competitors. Buffett was exposed to the economics of selling direct, and perhaps more importantly to the benefits of insurance “float”, that is the funds which an insurance company holds and is able to invest for its own profit. Over the long term the insurance industry makes minimal profits on underwriting policies, but float can make it a lucrative business to be in, providing the managers are skillful investors. Buffett places great emphasis on this point in his annual shareholders’ letters.

      Buffett married Susan Thompson in 1952. They had three children together, Susie, Howard, and Peter. The couple began living separately in 1977 but remained married until Thompson’s death in July 2004.

      In 1954, Graham invited Buffett to Graham-Newman. There, he worked closely with Graham and Walter Schloss. Graham, a tough man to work for, was adamant that a stock provide a wide margin of safety after weighting the tradeoff between its price and intrinsic value. Graham’s demand that a stock be worth more than its price made sense to Buffett, but it also made him question whether the criteria were too stringent, causing them to miss out on some big winners that had more qualitative values.

      Buffett returned to Omaha in 1956 after two years. He had no specific career plans in mind until he met his first major client, who sought Buffett’s expertise to manage investments for him. This paved the way for Buffett to establish his investment partnership, financed with his own money together with money from friends and family.

      He ran the partnership out of his bedroom, adhering closely to Graham’s investment approach and compensation structure. The partnership was named Buffett Partnership Limited (BPL). BPL made approximately 30% gains year-over-year between 1956 to 1969, in a market where 7% to 11% was the norm.

      His partnership employed a three-prong approach:

      Generals: undervalued securities that possess margin of safety and meet expected risk/return characteristics
      Arbitrages: company events that are not related to broader market changes such as mergers and acquisitions, liquidation, etc.
      Controls: build sizable holdings, ally with other shareholders or employ proxies to effect changes in companies
      In 1962, BPL established a position in Berkshire Hathaway, a large manufacturing company in the declining textile industry that was selling below its working capital. Buffett and Seabury Stanton, the President of Berkshire and a large shareholder at the time, differed in the buy back price by three-eights. Negotiations broke off and BPL purchased every share in sight until it established a 49% position and installed Ken Chace as President. Buffett would dissolve all partnerships to focus on running Berkshire Hathaway. Charlie Munger, Berkshire’s Vice Chairman, has remarked that purchasing the company was a mistake, due to the failure of the textile industry; Berkshire, however, became one of the largest holding companies in the world.

      As the bull market continued to roar, Buffett was strained to come up with investment ideas. In 1969, Buffett decided to liquidate his Partnership, he gave his limited partners a choice between cash or Berkshire shares (the one of two holdings he decided to keep).

      Buffett redirected the cash not required to maintain the textile business to acquire private businesses and stocks of public companies. At the core of his strategy was to purchase or build insurance or reinsurance companies and use them as super margin accounts to buy equities. Berkshire chooses managers who demonstrated unwavering underwriting discipline and cost consciousness throughout their careers. To align the interest with Berkshire shareholder’s, insurance managers are compensated for underwriting profit and not for meeting revenue growth targets.

      Buffett has stated that most of his fortune will pass to his Buffett Foundation. He is opposed to the transfer of great fortunes from one generation to the next. The bulk of the estate of his wife, valued at $2.6 billion, went to that foundation when she died in 2004

  16. Iowagner Reply

    What Do You Think About Warren Buffet Endorsing Barack Obama? The world’s richest man, Warren Buffet and best investor just endorsed Barack Obama.

    Republicans who value of free market economics should have a great deal of respect for Warren Buffet’s opinion. He has made his wealth making predictions about good investments. I guess he thinks Barack Obama would be a good investment for our county.

    So what do you think about this development?

    http://news.yahoo.com/s/afp/20080519/ts_alt_afp/germanyusinvestpoliticsbuffett_080519163709;_ylt=AoMZ0By0QIhdx_88YO8En7Fh24cA
    http://news.yahoo.com/s/afp/20080519/ts_alt_afp/germanyusinvestpoliticsbuffett_080519163709;_ylt=AoMZ0By0QIhdx_88YO8En7Fh24cA

    • Warren is a smart man and he knows whats good for our economy. If bushs’ tax cut were so good for our present/future he would have endorsed mccain but he has said he will make them permanent.

  17. Benon m Reply

    What Is The Address The Mr. Warren Buffet Of Omaha.? I really need that address and phone number . I want to talk to him,so please who knows please email it to me. Mr.warren is my insprition. I do not intend to use it against him. This is purely peacfully purpose. Am waiting.

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