And then I asked him the question, I said .. ‘I would use it for buybacks if I thought my stock was undervalued.’ And I said, ‘How do you feel about that?’ The stock was 200-and-something. He said, ‘I think my stock is very undervalued.’ I said, ‘Well, what better to do with your money?’Warren Buffett • Explaining how, in a conversation with Steve Jobs a few years ago, the duo discussed what Apple should do with its huge cash reserves. Buffett told Jobs to buy back some of the company’s stock. Jobs reportedly later told his friends that Buffett agreed that they should do nothing with the money — which, in case you missed the last sentence, is the opposite of what he said. Since Jobs died last year, the company has discussed a stock buyback, though it’s made a number of acquisitions of late. The stock, currently at $526, is still considered undervalued.
» And he only paid 17.4% in taxes: Buffett, whose monetary gains are the subject of scrutiny because of the fact that he’s the inspiration for Obama’s “Buffett Rule" (a notable part of the president’s jobs plan), released the earnings after being prodded by Rep. Tim Huelskamp of Kansas, a Republican. Of note: Just $39,814,784 of his earnings were taxable, with the rest going to deductions and exemptions (like, say, his fairly robust charitable givings). And in case you’re wondering, Warren’s tax rate is low largely because he makes most of his income through investing. In the end, how much did he pay in taxes? A paltry $7 million (or a mere nine percent in taxes on adjusted gross income).
Class warfare … may make for really good politics, but it makes for rotten economics.Rep. Paul Ryan • Coming out, guns blazing, against Obama’s plan to raise the tax rate for the super-rich. Ryan, speaking on “Fox News Sunday,”also claimed that the tax would be in effect a “double tax” on investments, and would discourage investors from putting their money into the economy. “If you tax something more, you get less of it,” Ryan said. “If you tax job creators more, you get less job creation. If you tax their investment more, you get less investment.” Mitch McConnell, speaking on “Meet the Press,” had similar concerns about the “Buffett Rule,” which we found out about last night. source (via • follow)
» Giving it to the needy: Our boy Warren Buffett, who recently took the U.S. government to task for not raising taxes on the rich, is giving a big cash infusion to a company that’s struggling build confidence in investors. It’s taken a hit on the stock market — its shares are down nearly 30 percent since the beginning of August and it just announced some huge job cuts — and it owns a couple of properties, Countrywide and Merrill Lynch, noted for their spectacular combustions during the financial crisis. Buffett’s deal is pretty sweet — a 6 percent annual dividend and a 5 percent premium if he buys back the stock — but he nonetheless sounds like he’s doing it out of respect for the company. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them,” Buffett said in a statement. “Bank of America is focused on their customers and on serving them well. That’s what customers want, and that’s the company’s strategy.”
Record levels of cash are piling up in corporate treasuries, idling. The only way to break this cycle of fear is to break it.Starbucks CEO Howard Schultz • Following the lead of Warren Buffett and pushing for more responsibility from those that can afford it. While Buffett went after super-rich taxpayers; Schultz instead is going after corporations that are sitting on piles of cash, yet are staying on the sidelines and choosing not to hire more people — or worse, putting that money into political campaigns in hopes of putting business-friendly leadership in power in 2012. While Starbucks has had union issues and gay rights issues crop up recently, the company does have a reputation for treating its employees better than most corporations of its size. Kudos, Howard. source (via • follow)
I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.Warren Buffett • Arguing in an editorial for the New York Times (titled, fittingly, “Stop coddling the super-rich”) that Congress needs to raise his taxes and those of people with incomes topping $1 million. “My friends and I have been coddled long enough by a billionaire-friendly Congress,” he writes. “It’s time for our government to get serious about shared sacrifice.” Wait … a super-rich guy offering more money up in taxes? Be still our hearts. And don’t tell the Koch brothers … they might disagree with this stance. source (via • follow)