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Thread: Eduardo Saverin Bill Backed By John Boehner

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by AdamT View Post
    So what are you saying? You think that capital gains should be taxed before they're earned?

    Absolutely not. Just that the righteous indignation about tax rates from Buffett is B.S. I would feel a bit better about his position as a frontman for Obama if he was getting a fee that would go to Berkshire as I am an owner of some "B" shares.

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by washunut View Post
    Absolutely not. Just that the righteous indignation about tax rates from Buffett is B.S. I would feel a bit better about his position as a frontman for Obama if he was getting a fee that would go to Berkshire as I am an owner of some "B" shares.
    Interesting. Most investors would rather see the CEO of a company take a large equity stake so that his interests are aligned with shareholders' interests, as opposed to taking a large salary that drains working capital and reduces profits. It's definitely something I look for when buying stocks.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by Luna Tick View Post
    I think it's great. The man used the United States to become successful and then discarded the country like garbage rather than pay is fair share. He originally came to the country as a refuge seeking protection. We gave him that. Now all he cares about is evading taxes. I think a bipartisan bill that bans him from ever coming here again is a great idea.
    Are you saying he hasn't paid any taxes since he's been here? Did you know that he put in his paperwork to end his citizenship last yea?. And how about the 47% that live here and don't pay taxes? Is Congress going to pass a bill kicking them out too?
    Last edited by American; 05-22-12 at 01:07 PM.
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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by washunut View Post
    Perhaps we should banish Buffet from the country as well. While he has not taken up a different nationality, he has used his tax lawyers to insure that most of his billions will never be taxed, not a single dime. Take about a hypocrite.
    I think you lack quite a bit of understanding on the Berkshire Hathaway tax issue, starting with the fact the Buffet owns less than 10% of the company and continuing with the fact that it is in dispute with the IRS on certain definitions. Americans have a defined right to minimize their taxes as long as they comply with the law. That is what Berkshire is doingl while Sauveran is choosing to slip out the back and not pay what is due.... a big difference.

    Allow me to re-repost one of my earlier posts on this subject... just to illustrated you have made a very bad example of equivalence because you know not of what of what you speak


    .....In the words of Spock, “Interesting!” This is a microcosm of what American politics have become in an era of the Internet (where anyone can post anything) and opinion marketed as news. Some guy that has no clue what he is taking about packages facts they do not understand, puts a spin on those facts designed to incite those that know even less about the subject than he then feeds those facts to people of ignorance hungry for something to support their preconceived ideas of the world. Anyone that takes this as some type of indictment of Buffett has been had.

    Let's start with the simple items:
    1. Berkshire Hathaway is a public corporation, not Buffett’s personal holding company.
    a. Berkshire has 1,200 institutional holders. All of the insiders, including Buffett, collectively hold less than 14% of the business. They do not have control. In fact, Buffett isn’t even the largest holder of BH, the Bill Gates Foundation is. It has 3 times the number of shares of Buffett.
    BRK-A Major Holders | Berkshire Hathaway Inc. Common Stock - Yahoo! Finance
    b. As a public corporation, it has a duty to its shareholders to maximize shareholder value, usually through maximizing profits. A part of maximizing profits is minimizing tax (see discussion of deferred taxes).
    2. All corporations have two sets of books.
    a. Accounting for income taxes and accounting for shareholders (generally accepted accounting principles or GAAP) are different things. Often there are different rules about expense and revenue recognition. For example, the IRS allows for more aggressive write-offs of equipment (even expensing) then GAAP which requires they be depreciated over useful lives.
    b. Companies seek to maximize book profit and minimize taxes, so they are far more aggressive on expense recognition on the tax books and less aggressive on the book books….
    c. The IRS and GAAP each require an accounting of the reconciliation between book income and tax income. On the tax return, this is on schedule M-1. On the books, its called deferred tax accounting, which is usually found on the balance sheet with a very extensive explanatory footnote.
    d. Illustration: If you had $100 in revenue, $40 in cost, you would have a $60 profit. At a 35% tax bracket, the tax would $20. However, if your bought a $40 computer and expensed that year for tax purposes (and over 5 years for book purposes) suddenly you have different results. The tax books would show $20 of taxable income and $7 in tax; the book books would show $52 in taxable income and $18.20 in tax.

    So, given the company only paid $7.00 in taxes, but accrued $18.20, the difference is recorded as a deferred tax liability. They did not pay all of the tax associated with the profits of business, but elected to defer payment. This deferment can go on for years. This is the way every responsible company operates.
    Of course, the above example is very basic. It gets a lot more complicated with international conglomerates such as BH, which does acquisitions and has holdings in insurance and railroads (very complex). The BH tax situation is very complex.

    This brings us the assertion that BH is not paying its taxes.
    Update: Warren Buffett’s Company Owes Nearly $1 Billion in Taxes | TheBlaze.com
    What an absurdly naïve statement! Whoever came up with this knows zero about corporate finance and/or knows they play to an audience that knows even less. Let’s start with the assertion that they owe $1B in back taxes…. No, the deferred tax liability (taxes according to the books, that are not yet paid) is actually $35B, but there is not abnormal about that. The $1B being discussed in the article has NOTHING to do with taxes owed, in fact, unrecognized tax benefits are the opposite of owing money; it’s a potential tax liability offset (receivable), that because of accounting convention, is not on the books (just footnoted). See footnote 15 to the Berkshire Hathaway audited financial statements, which reconciles the company’s long-term and current deferred tax situation (between books and tax)

    Then there is this whole dialogue about IRS audits. Again, this is silliness. A company with a that kind of balance sheet and a history of business acquisitions and divestitures, which give rise to very complex taxation events, has IRS auditors that practically reside in their offices. There are always going to be definitional disputes between the parties, and while these disputes often have big numbers associated with them, they are typically rounding errors in transactions and small components of the company's tax return. They are not material. You can read the footnotes of the financial statements of any Fortune 500 company and see a paragraph or mention of tax disputes. This is why we have tax courts because taxation is not as black and white as you think it is.

    Sorry, but this whole thing is a bit analogous to someone looking at the balance sheet, seeing liabilities and yelling “hey, they aren’t paying their bills”
    I appreciate the fact that people want to argue tax policy, and I further appreciate the fact that taxes are complex, maybe too complex, but people should use restraint and not talk authoritatively about things they knew little about.

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by Hare View Post
    If Saverin's actions were within the realm of legality, he shouldn't be singled out by a piece of knee jerk legislation. Banning an individual from entering the United States over a personal grievance is downright foolish and an abuse of authority in my opinion.
    In your opinion what should be done?
    “Most people do not listen with the intent to understand; they listen with the intent to reply.”
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    Re: Eduardo Saverin Bill Backed By John Boehner

    I'm not so sure that I'm a big fan of legislation targeting one person. However, I WOULD be in favor of legislation banning ANYONE/EVERYONE who renounces their US Citizenship (for whatever reason) from ever entering the US again.

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by upsideguy View Post
    I think you lack quite a bit of understanding on the Berkshire Hathaway tax issue, starting with the fact the Buffet owns less than 10% of the company and continuing with the fact that it is in dispute with the IRS on certain definitions. Americans have a defined right to minimize their taxes as long as they comply with the law. That is what Berkshire is doingl while Sauveran is choosing to slip out the back and not pay what is due.... a big difference.

    Allow me to re-repost one of my earlier posts on this subject... just to illustrated you have made a very bad example of equivalence because you know not of what of what you speak


    .....In the words of Spock, “Interesting!” This is a microcosm of what American politics have become in an era of the Internet (where anyone can post anything) and opinion marketed as news. Some guy that has no clue what he is taking about packages facts they do not understand, puts a spin on those facts designed to incite those that know even less about the subject than he then feeds those facts to people of ignorance hungry for something to support their preconceived ideas of the world. Anyone that takes this as some type of indictment of Buffett has been had.

    Let's start with the simple items:
    1. Berkshire Hathaway is a public corporation, not Buffett’s personal holding company.
    a. Berkshire has 1,200 institutional holders. All of the insiders, including Buffett, collectively hold less than 14% of the business. They do not have control. In fact, Buffett isn’t even the largest holder of BH, the Bill Gates Foundation is. It has 3 times the number of shares of Buffett.
    BRK-A Major Holders | Berkshire Hathaway Inc. Common Stock - Yahoo! Finance
    b. As a public corporation, it has a duty to its shareholders to maximize shareholder value, usually through maximizing profits. A part of maximizing profits is minimizing tax (see discussion of deferred taxes).
    2. All corporations have two sets of books.
    a. Accounting for income taxes and accounting for shareholders (generally accepted accounting principles or GAAP) are different things. Often there are different rules about expense and revenue recognition. For example, the IRS allows for more aggressive write-offs of equipment (even expensing) then GAAP which requires they be depreciated over useful lives.
    b. Companies seek to maximize book profit and minimize taxes, so they are far more aggressive on expense recognition on the tax books and less aggressive on the book books….
    c. The IRS and GAAP each require an accounting of the reconciliation between book income and tax income. On the tax return, this is on schedule M-1. On the books, its called deferred tax accounting, which is usually found on the balance sheet with a very extensive explanatory footnote.
    d. Illustration: If you had $100 in revenue, $40 in cost, you would have a $60 profit. At a 35% tax bracket, the tax would $20. However, if your bought a $40 computer and expensed that year for tax purposes (and over 5 years for book purposes) suddenly you have different results. The tax books would show $20 of taxable income and $7 in tax; the book books would show $52 in taxable income and $18.20 in tax.

    So, given the company only paid $7.00 in taxes, but accrued $18.20, the difference is recorded as a deferred tax liability. They did not pay all of the tax associated with the profits of business, but elected to defer payment. This deferment can go on for years. This is the way every responsible company operates.
    Of course, the above example is very basic. It gets a lot more complicated with international conglomerates such as BH, which does acquisitions and has holdings in insurance and railroads (very complex). The BH tax situation is very complex.

    This brings us the assertion that BH is not paying its taxes.
    Update: Warren Buffett’s Company Owes Nearly $1 Billion in Taxes | TheBlaze.com
    What an absurdly naïve statement! Whoever came up with this knows zero about corporate finance and/or knows they play to an audience that knows even less. Let’s start with the assertion that they owe $1B in back taxes…. No, the deferred tax liability (taxes according to the books, that are not yet paid) is actually $35B, but there is not abnormal about that. The $1B being discussed in the article has NOTHING to do with taxes owed, in fact, unrecognized tax benefits are the opposite of owing money; it’s a potential tax liability offset (receivable), that because of accounting convention, is not on the books (just footnoted). See footnote 15 to the Berkshire Hathaway audited financial statements, which reconciles the company’s long-term and current deferred tax situation (between books and tax)

    Then there is this whole dialogue about IRS audits. Again, this is silliness. A company with a that kind of balance sheet and a history of business acquisitions and divestitures, which give rise to very complex taxation events, has IRS auditors that practically reside in their offices. There are always going to be definitional disputes between the parties, and while these disputes often have big numbers associated with them, they are typically rounding errors in transactions and small components of the company's tax return. They are not material. You can read the footnotes of the financial statements of any Fortune 500 company and see a paragraph or mention of tax disputes. This is why we have tax courts because taxation is not as black and white as you think it is.

    Sorry, but this whole thing is a bit analogous to someone looking at the balance sheet, seeing liabilities and yelling “hey, they aren’t paying their bills”
    I appreciate the fact that people want to argue tax policy, and I further appreciate the fact that taxes are complex, maybe too complex, but people should use restraint and not talk authoritatively about things they knew little about.
    Sorry you misunderstood, I was not talking about BH not paying taxes. I do agree that everyone has the right to pay as little as possible.

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by Tigger View Post
    I'm not so sure that I'm a big fan of legislation targeting one person. However, I WOULD be in favor of legislation banning ANYONE/EVERYONE who renounces their US Citizenship (for whatever reason) from ever entering the US again.
    What a great message to send to (rich) entrepreneurs who are thinking of moving here to start businesses: "Make sure you really want to become an American, because if you change your mind, we'll sock you with a retroactive 30% tax on your worldwide capital gains, regardless of where you live, and bar you from ever entering the U.S. again if you don't pony up the dough. So be smart and move to some place like Singapore, instead, which has no capital gains tax and rolls out the red carpet for entrepreneurs. Bonus: Little crime, you can open an overseas bank account, and there are no welfare lumps to support, but you can still see the sights in America if you so choose."

    Banishing Facebook's Eduardo Saverin Harms U.S. More - Forbes
    Нава́льный 2018

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Dozens of billionaires dodging with cash in banks all over the world...

    and this guy needs a special law written to deny him exit or re-entrance.

    I want to write a law banning all stupid people from staying in the country...

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    Re: Eduardo Saverin Bill Backed By John Boehner

    Quote Originally Posted by MKULTRABOY View Post
    I want to write a law banning all stupid people from staying in the country...
    You needn't have tested your dream in this forum.

    Goodbye.

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