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Subject:  Re: Is your 401(k) Inadequate For Retirement Date:  8/2/2008  1:23 PM
Author:  fleg9bo Number:  13769 of 19372

You're only looking at it from only one side, fleg. Without all those employees at Warren's disposal, he couldn't run the ship. In fact, there would be no ship. Maybe a cabin cruiser, but no ship. He needs them as much as much as they need him. Without the stuff they've done in support of Berkshire-Hathaway's goals, he wouldn't be in the position he's in.

Have to disagree there. Without his secretary, Buffet would have hired another secretary and the ship would have kept on sailing. Without Buffet, none of those jobs would have existed at all. He made those jobs possible. The guy who tightens bolts on the assembly line is not as valuable to the company as the guy who runs it. Buffet doesn't need any particular group of employees as much as they need him. They are replaceable and he isn't when it comes to starting or improving the company.

That's why capital should be taxed lightly. It creates jobs, which in turn leads to lots of other taxes being paid. None of Buffet's employees created a single job.

Note that I'm not talking about value as a human being but the economic value of labor.

As for me, well, let's see. I've hired an electrician, a plumber, and a carpenter in the last few months. They've helped me achieve my renovation goals and I don't feel compelled to think that they should pay more taxes than I do simply because I provided them with some income.

Without you, they would not have had the work. Without them, you would have found a different electrician, plumber and carpenter. You were the more valuable participant in the interaction because you created their livelihood. Their taxes should be based on their earned income. Yours should be based on whatever kind of income you receive. If you earned money in the past, paid taxes on those earnings, then chose to risk some of what was left over by investing in, say, stocks, and made a gain, you should be taxed lightly on that gain because you took a risk and your investment helped do the kinds of things that Buffet has done.

I'm also quite happy making sure I stay in the 15% marginal income tax bracket. How about you?

28% marginal last year (AMT rate). Probably 15% this year.

--fleg
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