Are there any editors working the day shift? If so, why in the world was this allowed to go to print in amagazine of your stature? I am NOT a CPA with over 30 years of non-CPA knowledge and even I know that there are no taxes on unrealized capital gains. If you allow this “contributor” to contribute again, keep him on a short lease.
All I can say to that is that I’m glad I’ve hung onto my day job. I even kept my old blogspot site alive, where my readers numbered in the scores.
Here is the reason for my comment, which charliemurf thinks merits keeping me on a “short lease”. Mr. Buffet in his piece in the Times indicates that he paid $6,938,744 in taxes an effective rate of 17.4% on his taxable income. I won’t insult Mr. Murf by explaining why that makes me think that Mr. Buffett’s taxable income was $39,877,839. Mr. Buffett seems to be saying that he wouldn’t mind paying at a higher rate. If you don’t mind me shifting to round numbers at 40% he would have paid $16,000,000.
I just can’t help thinking that buried in that analysis is a subtle assumption that it is that favorable rate that is getting Mr. Buffett ahead and I think that subtle assumption is mistaken. According to Forbes, Mr. Buffett’s net worth went up by $3,000,000,000 over the last year. If he had to realize those gains, even at 17.4%, he would have had to pay $522,000,000.
I actually don’t do much in the way of advocating about tax policy. My motto is “It is what it is. Deal with it.” I was just concerned that people might think that recognizing capital gains at a favorable rate was a triumph of tax planning, while it is probably deferral that is the better wealth building device.
Regardless, I’ll talk to my editor about “shortening my lease” and only writing about things that are obscure like PLR 201130018.