Wednesday, August 17, 2011 8:49 AM – Markets Set to Open Slightly Higher – Buffet on Taxes

Futures have stocks opening about 0.5% higher. That may not last. Europe is down -0.5%, Asia is mixed, the S&P is right around a resistance area at 1200 and volume on this rally has been weak. There is strong resistance at 1240-1260, about 3%-5% higher. More people are becoming convinced that next year’s estimates are too high and that the prospects for another recession are rising.

Warren Buffet’s repeated comments about he, a billionaire, paying less in taxes than his secretary or the person who cleans his office are very misleading. Buffet pays himself no salary and he has given his billions to charity. So, his is not an apples to apples comparison.

Warren Buffet’s income is paid to him in stock shares on which he pays the 15% tax rate levied on investments. Add to that, that his corporate profits are taxed at a 35% rate and he actually pays 45% as a tax rate, much higher than either his secretary or cleaning lady, since the top tax bracket on wages is 35%.

There is so much political deception about taxes on millionaires and billionaires it makes me sick. That’s not so much because I am a Republican but because I despise deception.

Read the two WSJ articles on this subject in today’s opinion page. Copy this address into your browser http://online.wsj.com/article/SB10001424053111903918104576504650932556900.html?mod=ITP_opinion_2 .

There you’ll see why “roughly 90% of the tax filers who would pay more under Mr. Obama’s plan aren’t millionaires, and 99.99% aren’t billionaires.”

The second article at http://online.wsj.com/article/SB10001424053111903480904576512501087811480.html?mod=ITP_opinion_2 includes this fact: “Those who make $1 million accounted for about 0.2% of all tax returns but paid 20.4% of income taxes in 2009. Those with adjusted gross income above $200,000 a year were just under 3% of tax filers but paid 50.1% of the $866 billion in total personal income taxes. This means the top 3% paid more than the bottom 97%. Yet the 3% are the people that President Obama claims don’t pay their fair share.”

The top 5% of earners pay 70% of all personal income taxes. The bottom 50% pay nothing at all income tax. This nonsense about the rich getting away with something is just plain deception for political ends. It is the bottom 50% who are getting away with paying no income tax, but of course to point that out alienates about 50 times as many voters as blasting the “rich.” The more the news covers politics the more disgusted I get with them. Stop the lying and media – point out the lies; don’t just pass them along.

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