FW: Voodoo Economics
jcraven at clark.edu
Tue May 20 12:30:51 MDT 2003
> Buffett slams dividend tax cut
> One of world's richest calls plan 'voodoo economics,' says it puts burden
> on low-income families.
> May 20, 2003: 10:41 AM EDT
> NEW YORK (CNN/Money) - Renewing his criticism of the dividend tax cut laid
> out by the Senate last week, Berkshire Hathaway's Warren Buffett called
> the proposal "voodoo economics" that uses "Enron-style accounting."
> The Senate's plan for dividends to be 50 percent tax free in 2003, 100
> percent tax free in 2004 through 2006 and then face the full tax in 2007
> would "further tilt the tax scales toward the rich," Buffett wrote in an
> opinion piece in the Washington Post.
> Buffett posed a hypothetical situation in which Berkshire Hathaway, which
> does not currently pay a dividend, paid $1 billion in dividends next year.
> Through his 31 percent ownership of the company, Buffett said he would
> receive an additional $310 million in income that would reduce his tax
> rate from about 30 percent to 3 percent, while his office secretary would
> still have a tax rate of about 30 percent.
> "The 3 percent overall federal tax rate I would pay -- if a Berkshire
> dividend were to be tax free -- seems a bit light," Buffett wrote.
> Instead of the Senate's tax cut plan, Buffett proposed that it provide tax
> reductions to those who need and will spend the money in the form of a
> Social Security tax "holiday" or a tax rebate to lower-income people.
> "Putting $1,000 in the pockets of 310,000 families with urgent needs is
> going to provide far more stimulus to the economy than putting the same
> $310 million in my pockets," Buffett added.
> He closed the piece by saying that the "government can't deliver a free
> lunch to the country as a whole. It can, however, determine who pays for
> lunch. And last week the Senate handed the bill to the wrong party."
> Warren Buffett sits on the board of the Washington Post Co
> <http://cgi.cnnfn.com/mgi/mgi_search?QUERY=WPO> > (WPO
> <http://gw.cnnfn.com/search/GW?symbol=WPO> >: up $3.91 to $715.01,
> Research <http://cnnfn.multexinvestor.com/Reports.aspx?ticker=WPO
> <http://cnnfn.multexinvestor.com/Reports.aspx?ticker=WPO> >, Estimates
> <http://cgi.cnnfn.com/firstcall/fc?ticker=WPO> >). and Berkshire Hathaway
> <http://cgi.cnnfn.com/mgi/mgi_search?QUERY=BRK.B> > (BRK.B
> <http://gw.cnnfn.com/search/GW?symbol=BRK.B> >: up $2.00 to $2451.00,
> Research <http://cnnfn.multexinvestor.com/Reports.aspx?ticker=BRK.B
> <http://cnnfn.multexinvestor.com/Reports.aspx?ticker=BRK.B> >, Estimates
> <http://cgi.cnnfn.com/firstcall/fc?ticker=BRK.B> >) owns a stake in the
> newspaper publisher. <<...OLE_Obj...>>
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