Simply, that is a business structure with limited liability that allows investors to be taxed at their personal rate on dividends.
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Your personal rate of inflation is already higher than you might think.
Nearly every venture capitalist still actively investing today has decried legislation wending its way through the various halls of Congress that would raise the rate of taxation they face to the personal rate of 40% from the capital gains rate of 15 percent.
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At the same time, the monthly personal savings rate scratched an all-time low, a negative 0.2% in July.
If share prices plunge, a low personal saving rate provides less of a cushion than a high one.
The following graph depicts the personal savings rate in the United States as reported by the Department of Commerce.
So how does Mr. Buffett arrive at such a low personal tax rate?
From the 1950s through the 1970s, for example, Britain was burdened with onerous taxes--the top personal tax rate hit 98%.
So when they raise prices 6 or 8 percent, as they do, it's a much bigger increase in my personal inflation rate.
The budget deficit declines to 4.5 percent of GDP, sort of the mirror image of the personal savings rate, around 4 percent.
The personal saving rate in July dipped to a negative 0.9%, the 16th month in a row the rate has been negative.
First, the top marginal personal tax rate rises to 39.6% from 35% as the Bush tax cuts expire at the end of 2012.
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Then they can take responsibility for their personal utilization rate and not feel that the only way to seem efficient is to work without breaks.
Most of the windfall income was not spent, with the US personal savings rate increasing from 4.1% of income in November to 6.5% in December.
Add to this a personal savings rate in the United States that stands below zero and, unfortunately, none of the retirement cylinders look to be firing right now.
But what emerged was a clear improvement of the tax code, with a top statutory personal income rate of 28 percent and the doubling of the standard deduction.
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Indeed, one of the strongest arguments for a shift to individual provision is that it should raise the personal saving rate, which would help to foster economic growth.
In the second quarter of this year America's personal savings rate fell to a historic low of 0.6%, with consumer spending jumping at an annual rate of 6%.
Ed McKelvey, an economist at Goldman Sachs, points out that the historically flat personal saving rate (once realised capital gains are included) means that households are, in essence, treating such gains as a perfect substitute for disposable income.
Despite the misleading personal savings rate (negative because it arbitrarily excludes gains from income), the U.S. has more household financial savings than the rest of the world combined, an even bigger lead if tangible assets like houses and cars are counted.
Buoyed by gains on the stockmarket, they had been emptying their wallets far faster than their incomes were rising, with the result that America's personal savings rate fell in the second quarter of 1998 to its lowest level since 1945 (see chart above).
That and the president's tax policies give the moneyed class some disquiet. (The corporate rate is 38.5%, the highest personal income tax rate 35%.) But business owners are counting their blessings.
The highest personal income tax rate is 10.55%, a real killer for small businesses, most of which pay the personal income tax.
Schrder is also reducing taxes on profits and cutting the top personal income tax rate by 15%.
The plan envisions that the top personal income tax rate will fall to no higher than 29 percent.
The good news: Chancellor Gerhard Schroeder is abolishing the corporate capital gains tax and cutting the top personal income tax rate by 15%.
The good news: Chancellor Gerhard Schrder is abolishing the corporate capital gains tax and cutting the top personal income tax rate by 15%.
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