High Income No Taxes (HINTs)

HINTS: High Income, No Taxes: Ahhh, the scourge of the sometimes oh-so-self-unaware Warren Buffett.

He decried the horribleness of professionals making a mmmmmmilllllion dollars a year and paying too little in taxes. So taxes were raised on the hard workers, the high earners, largely under his pushing. See: Alternative Minimum Tax (AMT) for the scathing details.

What Warren forgot to note and/or notice was that a crappy 4-bedroom, 40-year-old ranch house in Palo Alto (Silicon Valley) costs about $5 million.

Manhattan and parts of whatever high-earner, big-end city all cost in the same league. So the high earners who were soaked with Alternative Minimum taxes suffered a big tax hit and had to remain living in their 1,700-square-foot condos with their 3 kids. Yeah, costs in The Big City ain’t what they are in Omaha.

The ultimate HINT? Buffett himself.

He has some $60 billion in BRK stock. It goes up about 10% a year on average, give or take. His pre-tax gross stock appreciation in a given year? Meh, about $6 bil. So, why is he opining on the earnings of a Silicon Valley orthodontist married to a real estate agent earning a collective $582,000 and paying some $240,000 in taxes and entitlements they’ll never see? They then net $342k and can barely afford to put braces on their own kids.

Our HINT: if you don’t fight the battle in the trenches with other professionals trying to build a better life for their kids and actually understand the math of life in The Big City, STFU.