November 30, 2012
Tax Hike Champions
Among the billionaires favoring higher taxes on people earning more than $250,000 per year are Bill Gates, Charles Munger, and Jim Sinegal. Aside from their billionaire status their stance on raising taxes, what might these three gentlemen have in common? Well, they're all on the board of directors for Costco. In fact, Jim Sinegal is a founder and former CEO of Costco.
There is newsworthiness here. It came about when the Costco board voted voted itself a $7.00 per share stock dividend in time to beat the Obama tax hikes. Not only that, they're borrowing $3.5 billion to do it. The payout to the board amounts to about $29 million, of which $14 million goes to Sinegal. He will pay taxes on his $14 million at the rate of 15% instead of up to 43.4% if they had waited until the first of the year. That 's a difference of about $4 million in taxes that Sinegal won't pay.
The Wall Street Journal writes:
We emailed Mr. Sinegal for comment but didn't hear back. Mr. Galanti explained that while looming tax hikes are a factor in the December borrowing and payout, so are current low interest rates. Mr. Galanti adds that the company will still have a strong balance sheet and is increasing its capital expenditures and store openings this year.
As it happens, one of those new stores opened Thursday in Washington, D.C., and no less a political star than Joe Biden stopped by to join Mr. Sinegal and pose for photos as he did some Christmas shopping. It's nice to have friends in high places. We don't know if Mr. Biden is a Costco shareholder, but if he wants to get in on the special dividend there's still time before his confiscatory tax policy hits. The dividend is payable on December 18 to holders of record on December 10.
To sum up: Here we have people at the very top of the top 1% who preach about tax fairness voting to write themselves a huge dividend check to avoid the Obama tax increase they claim it is a public service to impose on middle-class Americans who work for 30 years and finally make $250,000 for a brief window in time.
Whenver those those billionaires favoring higher taxes are asked why they just don't write a check to the treasury if they don't think they're paying high enough taxes, they say no. They say how we're all in this together so we all should make the sacrifice. Well... Here's their idea of how the sacrifice should be shared.
Hat tip to reader Marian for pointing out this story.
Posted by Tom Bowler at 11:18 AM | Permalink
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