Posted by: twotrees | August 16, 2011

Two Good Ideas in One Day

  Things are feeling a little weird lately, no?  The   economy, politics, ten years of war… So it’s encouraging to hear that two very successful, upstanding businessmen go public with strong ideas on how to end the madness.

Warren Buffett, the man whose stock people will gladly pay over $100,000 per share (no really, check it here:  http://www.google.com/finance?client=ob&q=NYSE:BRK.A#) writes that America should stop coddling the rich.   In a New York Times op/ed piece, Buffett writes ” While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate”. 

Buffett, always a straight shooter, has for years complained how unfair Proposition 13 is in California.  He owns two homes here, one taxed much more than the other, yet both worth about the same. The difference?  When he bought them and for how much (at the time).  Not present value, but past value taxation. 

He’s also the billionaire who, after committing to give most of his fortune to charity, looked into starting his own foundation, then decided to give at least $1 billion to a better idea – the Bill and Linda Gates Foundation.  Smart, smart, smart.

The second idea of the day comes from Harold Schultz, heretofore noted as the man who grew Starbucks into 11,000 units which serves half of the universe its caffeine daily.  Schultz, on CBS news today urged other corporate CEO’s to stop funding politics until Congress and the President set a better course financially for this country.  It’s the first time someone of Schultz’s stature has made such a suggestion of late, although it’s unlikely to move many other major corporate donors for one simple reason – greed.  People (which now includes corporations, according to the Supreme Court) generally give large sums to politicians in hopes of doing what all investments are meant to do – provide a return on that investment.  Through lower taxes, less regulation, etc…

It will take many more corporate titans to follow this credo before those in Washington will take serious note.  Still, Schultz, who earns in the $20 million per year range, stuck his neck out and said the obvious – that politics will remain a rotten business as long as money is the key to winning office.

Warren Buffett’s piece:  http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1&ref=business

Howard Schultz:  http://www.thestreet.com/story/11220781/1/starbucks-ceo-boycott-campaign-donations.html

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