From Bloomberg Government:

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit.

With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.

“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”

The State Department denied TransCanada a permit on Jan. 18, saying there was not enough time to study the proposal by Feb. 21, a deadline Congress imposed on President Barack Obama. Calgary-based TransCanada has said it intends to re-apply with a route that avoids an environmentally sensitive region of Nebraska, something the Obama administration encouraged.

The rail option, though costlier, would lessen the environmental impact, such as a loss of wetlands and agricultural productivity, compared to the pipeline, according to the State Department analysis. Greenhouse gas emissions, however, would be worse.

If completed, Keystone XL would deliver 700,000 barrels a day of crude from Alberta’s oil sands to refineries along the Gulf of Mexico, crossing 1,661 miles (2,673-kilometers) over Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. (more…)

LOS ANGELES (AP) – Hundreds of Occupy Los Angeles protesters showed no sign they planned to move Sunday ahead of a city-imposed midnight deadline to abandon their encampment, saying they would instead hold an “eviction block party.”

Although city officials have told demonstrators they must leave the weeks-old protest site and take their nearly 500 tents with them by 12:01 a.m. Monday, just a handful were seen packing up Sunday.

Instead, some passed out fliers containing the city seal and the words: “By order of Mayor Antonio Villaraigosa, this notice terminates your tenancy and requires you to attend the Occupy L.A. Eviction Block Party,” which the fliers’ said was scheduled for 12:01 a.m.

“The best way to keep a non-violent movement non-violent is to throw a party, and keep it festive and atmospheric,” said Brian Masterson as he helped a friend break down her tent. “And I’m going to be doing as much as I can to stop violence.”

He said he had turned his own tent into a “non-violent booby trap” by filling it with sandbags to make it tough to tear down.

“We can’t beat the LAPD, but we can make it difficult for them to do their job, and have fun while we’re doing it,” Masterson said. (more…)

In the wake of the $700 billion TARP bailout, Warren Buffett apparently shaped a plan to clean up toxic assets that Treasury Secretary Tim Geithner later adopted–resulting in massive profits for Buffett.

That’s the latest bombshell revelation from investigative journalist and Breitbart editor Peter Schweizer’s sensational new book, Throw Them All Out.

According to Schweizer, after the bailout bill’s passage, Warren Buffett sat down and wrote then-Treasury Secretary Henry Paulson a four-page private letter laying out a plan to clean up the toxic assets plaguing numerous financial institutions.  Buffett proposed something he called a “public-private partnership fund.”  For every $10 billion the private sector invested, Buffett said the government should put up $40 billion.

After Paulson’s exit, incoming Treasury Secretary Tim Geithner tweaked the plan and rolled it out in March 2009. But according to quarterly reports from Buffett’s holdings company, Berkshire Hathaway, between the time the billionaire crafted his plan and Geithner adopted it, Buffett quietly purchased 12.4 million shares of Wells Fargo stock and 1.5 million shares of U.S. Bancorp. Once the government unveiled its “Public-Private Investment Program,” bank stocks jumped, resulting in large profits for Buffett.

How much Buffett profited is hard to calculate, since there’s no way to know what his purchase price was. But prior to the government adopting Buffett’s plan, Wells Fargo had been trading at roughly $20 a share. In the weeks after Geithner’s announcement, the stock jumped to $30 a share. Likewise, U.S. Bancorp went from $8 in February 2009 to more than $20 a share by May. (more…)

“It’s time for our government to get serious about shared sacrifice.”
- Warren Buffett, NY Times Op-Ed August 15, 2011

Those high-minded and selfless words from one of the nation’s richest men inspired the Democrats’ latest push for higher taxes on job creators.  It also sounds like one of the creepy slogans chanted and repeated by the aromatic “Occupy Wall St” protesters when they decry corporate greed and the doomed capitalist system.

Yes, Mr. Buffett has entered his ninth decade of this mortal coil as somewhat of a folk hero to progressives and leftists who would normally be revolted by a multimillionaire investor.  But Buffett (whose many holdings include the GEICO insurance company) has purchased a little media insurance by speaking out against his own tax rates and has practically begged the government to take more of his money and money from the rest of us who are business owners and are trying to be next decade’s Warren Buffett.

Meanwhile, according to research done by Americans for Limited Government, Buffett’s company, Berkshire Hathaway, has a decade-old dispute with the IRS over its corporate tax bill, an obligation worth $1 billion dollars, so far.

“The company has been short-changing the tax collection agency for much of the past decade. Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years.”

(more…)

From Rep. Tim Huelskamp (R-KS):

(WASHINGTON) – In an open letter in August, Congressman Tim Huelskamp called on billionaire Warren Buffett to release the contents of his tax returns. Subsequently, Congressman Huelskamp told Neil Cavuto that he would release the contents of his own tax returns if Mr. Buffett would do the same. Congressman Huelskamp reiterated this additional promise to Mr. Buffett in a letter last week. Today, Congressman Huelskamp released the contents of the response he received from Mr. Buffett (available here).

Warren Buffett’s response to Rep. Tim Huelskamp (R-KS)

After reading Mr. Buffett’s inadequate response, Congressman Huelskamp said: “Mr. Buffett still refuses to release his tax returns.  What he does disclose may be accurate, but it is incomplete and it fails to explain how he shelters millions of dollars in income from taxation. It is unprecedented that we would write an entire law based on one man’s anecdotes without actual proof. By sheltering millions of dollars of income from taxation, probably through charitable giving, Mr. Buffett demonstrates that he doesn’t trust Washington with his own money either. (more…)

After hearing legitimate complaints that his tax and spend Jobs plan was nothing more than class warfare, the President responded that it wasn’t about class warfare it was about math.  In the end both sides are right, the President’s plan is about class warfare, and on top of that his math would get him an “F” in a 9th grade algebra class. The “F”  would probably be accompanied by a note that says:

Let’s start with his everyone paying their fair share shtick.  First of all there is not enough rich person income income to solve our massive debt problem over the short or long term. The top 3 percent of earners, those making $250,000 or more, have about $2.3 trillion in total annual income. So even if we took all their money it would only pay our bills for a bit over six months. it would only fund the government this year for just over six months. If you wanted to limit it a bit and only confiscate all the income of the 400 wealthiest Americans that would net only about $1.4 trillion, a pittance in the Obama budget. It would pay the federal government’s bills for about Four and a half months, which means neither the government nor those wealthy 400 would have anything left to buy guacamole dip for their Super Bowl Party (nor pay the electric so they can watch the game on TV).

The President also makes the argument that the rich pay a lower percentage of their income in taxes. Maybe he never looked at the numbers. According to an AP report, 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, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

(more…)

From Reuters:

President Barack Obama, in a populist step designed to appeal to voters, will propose a “Buffett Tax” on people making more than $1 million a year as part of his deficit recommendations to Congress on Monday.

Such a proposal, among suggestions to a congressional supercommittee expected to seek up to $3 trillion in deficit savings over 10 years, would appeal to his Democratic base ahead of the 2012 election but may not raise much in revenues.

(more…)

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss Hurricane Irene, Warren Buffett’s mysteriously timed investment in Bank of America, and the Fed meeting in Jackson Hole, Wyoming.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Track Hurricane Irene on Stormpulse
Berkshire Hathaway Invests $5 Billion in Bank of America
Obama talks to corporate titans on economy
Buffett to Host Obama Fundraiser in New York
Economic Growth Slows to Crawl, GDP Increase at 1%
What Do Markets Expect From Jackson Hole? (more…)

Warren Buffett’s at it again. He has a column in the New York Times complaining that he has been coddled by the tax code and that “rich” people should pay higher taxes.

My first instinct is to send Buffett the website where people can voluntarily pay extra money to the federal government. I’ve made this suggestion to guilt-ridden rich people in the past.

But I no longer give that advice. I’m worried he might actually do it. And even though Buffett is wildly misguided about fiscal policy, I know he will invest his money much more wisely than Barack Obama will spend it.

But Buffett goes beyond guilt-ridden rants in favor of higher taxes. He makes specific assertions that are inaccurate.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

His numbers are flawed in two important ways.

1. When Buffett receives dividends and capital gains, it is true that he pays “only” 15 percent of that money on his tax return. But dividends and capital gains are both forms of double taxation. So if he wants honest effective tax rate numbers, he needs to show the 35 percent corporate tax rate.

Moreover, as I noted in a previous post, Buffett completely ignores the impact of the death tax, which will result in the federal government seizing 45 percent of his assets. To be sure, Buffett may be engaging in clever tax planning, so it is hard to know the impact on his effective tax rate, but it will be signficant.

2. Buffett also mischaracterizes the impact of the Social Security payroll tax, which is dedicated for a specific purpose. The law only imposes that tax on income up to about $107,000 per year because the tax is designed so that people “earn” a corresponding  retirement benefit (which actually is tilted in favor of low-income workers).

Imposing the tax on multi-millionaire income, however, would mean sending rich people giant checks from Social Security when they retire. But nobody thinks that’s a good idea. Or you could apply the payroll tax to all income and not pay any additional benefits. But this would turn Social Security from an “earned benefit” to a redistribution program, which also is widely rejected (though the left has been warming to the idea in recent years because their hunger for more tax revenue is greater than their support for Social Security).

If we consider these two factors, Buffett’s effective tax rate almost surely is much higher than the burden on any of the people who work for him.

(more…)

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the proposed “Department of Jobs,” and Warren Buffett’s plea to the government to make him pay more in taxes.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

A Jobs Agenda, Anyone?
White House Debates Fight on Economy
Stop Coddling the Super-Rich

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From AFP:

With the US Congress hurtling toward a deadline on expiring tax cuts, a growing number of wealthy people are calling for higher taxes on the rich to help restore America’s fiscal health.

One effort gathered over 45 millionaires who signed an open petition calling for the end of the tax cuts adopted since 2001 on those with annual incomes exceeding one million dollars.

Tax breaks for the wealthy should expire “for the fiscal health of our nation and the well-being of our fellow citizens,” the letter said. It was signed by Ben & Jerry’s ice cream founder Ben Cohen, hedge fund manager Michael Steinhardt and others.

(more…)