Warren Buffet - FB conversation

S.B.: gotta love Warren Buffett. "I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain," he said Stop coddling the super-rich: Buffett' on Yahoo! News. (Reuters) - Billionaire Warren Buffett urged lawmakers to raise taxes on the country's super-rich to help cut the budget deficit, saying such a move will not hurt investments. 

 Me: Yeah, and Pat Buchanan said that Buffet should stop posturing about tax increases for the rich and write a check for $5 billion to the government. If he wants higher taxes, there is nothing stopping him from doing something about it. 

 L.E.: just tired of the brou-ha-ha... R.B.: Buffet is a communist who has never worked a day in his life. 

B.S.: Too funny, Ryan. Did you actually read the article? One of the points he makes is that people who earn their money by working shouldn't be taxed more than people like him who earn their money from having money. 

 B.S.: Rich - then Pat Buchanan was just reporting what Buffet had already begun - promoted the idea among his close circle of billionaire friends that they give away half their net worth. 

Me: Different subject. There is a cadre of billionaires talking about giving money to charity. Buchanan is talking about Buffet wanting govt to raise taxes on the wealthy. 

B.L.: I agree. The working class should pay less taxes proportionatley than the mega rich. 

M.D.: The middle class is much larger and thus higher taxes on it will raise a lot more revenues. The rich use their money to create jobs 

S.B.: M.D., that's actually not true. If you look at the distribution of wealth (*not incomes) in this country, something like 90% of the wealth is in the hands of fewer than 5% of the people. And increasingly, that wealth is NOT being used to create jobs -- economists note that despite good profitability and record cash reserves, companies are NOT increasing hiring, instead looking to automation and other forms of productivity increases to get the work done. When jobs ARE created, they're increasingly being created overseas, for a wide variety of reasons including the fact that is where the new markets are. If you want to increase jobs, find a way to increase real income for the middle class. That has been flat or worse for decades, and without demand, there's no point in being a supplier. 

Me: It is not the purpose of wealth to create jobs. Jobs are created when there is work to be done. There is no work for 22% of the people, thanks to Bush II and III. By the way, all that wealth is not hidden in a mattress somewhere. 

S.B.: No, much of it is being invested in emerging economies, creating jobs THERE, not here. 

Me: I take it you're an advocate of protectionism and closed borders? 

S.B.: Not really. Just observing that it cannot be taken for granted that wealth accumulated in the us is going to be reinvested here.