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[Cygnus X-1]

Buffett has been saying this for decades.

I'm glad he did. Well, I suppose the best he could do is to pay his workers better than the concurrence.

 

[empty vessel]

Besides, I understand the $20 billion is the minimum, but doubling, tripling, or even quadrupling that value is still a relative "drop in the bucket" compared to our current massive deficit.

Nobody cares about the deficit. It's not remotely a problem.

People who think simply creating new top rates by 5%-10% will fix all of the US' fiscal problems are simply not doing the math, and those who think such rates should be raised 20%-30% are being completely unrealistic and moronic.

The US doesn't have fiscal problems, although I do think the rates should be raised at least 20-30% and probably more. Although frankly I'd be perfectly happy to hold off until the economy recovers, provided that the government spends a lot more in the interim to make that recovery happen.

 

[Kapura]

buffet is one of my favourite billionaires.

 

[The Technomancer]

Buffet really is awesome.

 

[GaimeGuy]

I'm glad he did. Well, I suppose the best he could do is to pay his workers better than the concurrence.

He does. The issue is not how much you make (well, I'll get to that...), but where you make it from. The long term capital gains tax rate, on gains above the 15% ordinary income bracket, is 15%. that means that if warren buffet makes $1B in a year (his wealth has gone from $37B in 2009 back to over $50B this year) on cap gains, he pays 15% on all of it. Not subject to any payroll taxes. For those of us paid in wages or a salary, none of us pay less than 17.65% (15.65% temporarily for just this year) without any deductions.

For all of warren buffett's wealth and annual earnings he pays only $5650 towards medicare and social security on an annual basis ($100,000 salary.)


By the way, Something Wicked, the 2 year extension of the bush tax cuts on income over $250k (these are marginal rate increases on income only, not total rate increases, and certainly not on long term capital gains) cost $81.5B. The estate tax changes, whichraised the exemption from $1M to $5M and lowered the top rate from 55% to 35%, cost another $68.1B. Your estimates are eso lowballed it's pathetic.

 

[GaimeGuy]

oh and another thing: without the effects of the economic downturn and the 2 wars, the annual deeficit (prior to any spending reforms enacted recently and excluding those to follow) is projected to be $450B-$550B a year. Very easily fixable with some minor adjustments to the tax code regarding corporate profits and capital gains.

 

[Takuan]

I'm sure when he says that many of his peers agree that they should pay more in taxes, I doubt that many of them actually mean it.

Good on him for calling the government out on this one. I don't think it'll happen, but still, I like the effort.

 

[MaddenNFL64]

I hope this helps. Tax the rich to all hell. Well, not all hell, but at Clintons level at least, geez.

 

[GaimeGuy]

I'm sure when he says that many of his peers agree that they should pay more in taxes, I doubt that many of them actually mean it.

Good on him for calling the government out on this one. I don't think it'll happen, but still, I like the effort.

Why? Guys like Buffet have more money than they know what to do with. Buffet splurges with his money by eating out once a week (pancakes and orange juice at a local breakfast joint) and buying a new corvette every year. That's all the excess he indulges in.

 

[RSTEIN]

Once again Warren Buffett us the most disingenuous man on Earth.

"Derivatives are weapons of financial mass destruction." He uses them.

"I pay less in taxes than my housekeeper." Stop fucking classifying your income as interest and dividends.

The man is a good investor but his attempts to be the wise sage are a fraud.

You're wrong on both points.

1) As we saw in the financial crisis, derivatives have the potential to be weapons of financial distruction. They were used by every financial institution--institutions that already had 20-50x leverage. Furthermore, the individuals charged with understanding the complex instruments did not have the knowledge necessary to make sound judgements. They infected the system.

Buffett uses derivatives, yes. There are several differences between his use of derivatives and how they were used by other financial institutions at the top of the market. First, Buffett's corporation, Berkshire Hathaway, is a AAA-rated entity with basically no debt. His derivative bets cannot bring him down nor infect the entire system to cause another financial catastrophe. Second, he uses derivates to either hedge against uncertainty or make long-term bets where he sees the risk/reward as being extremely favourable. For example, he purchased call options with an expiry date going out decades (forget how long exactly) on the S&P 500 at the bottom of the market. Banks used derivates in a way that magnified their already leveraged exposure to the housing market and financial markets. They ALL made the same bet, and all went down together.

2) Buffett does not classify his income. The IRS does that. He earns about $100,000 as head of Berkshire Hathaway. His wealth comes from stock ownership. Personally he owns shares in other companies as well as fixed income. What is he supposed to do? Reclassify interest as income? That's illegal and he'd go to jail.

 

[Takuan]

Why? Guys like Buffet have more money than they know what to do with. Buffet splurges with his money by eating out once a week (pancakes and orange juice at a local breakfast joint) and buying a new corvette every year. That's all the excess he indulges in.

I know Buffet's word is worth his weight in gold, but I feel like people in his circles would just agree with whatever he says to curry favor. I just don't think a lot of these people will appreciate the tax hike and will secretly resent him if this comes to pass.

 

[GaimeGuy]

You're wrong on both points.

1) As we saw in the financial crisis, derivatives have the potential to be weapons of financial distruction. They were used by every financial institution--institutions that already had 20-50x leverage. Furthermore, the individuals charged with understanding the complex instruments did not have the knowledge necessary to make sound judgements. They infected the system.

Buffett uses derivatives, yes. There are several differences between his use of derivatives and how they were used by other financial institutions at the top of the market. First, Buffett's corporation, Berkshire Hathaway, is a AAA-rated entity with basically no debt. His derivative bets cannot bring him down nor infect the entire system to cause another financial catastrophe. Second, he uses derivates to either hedge against uncertainty or make long-term bets where he sees the risk/reward as being extremely favourable. For example, he purchased call options with an expiry date going out decades (forget how long exactly) on the S&P 500 at the bottom of the market. Banks used derivates in a way that magnified their already leveraged exposure to the housing market and financial markets. They ALL made the same bet, and all went down together.

2) Buffett does not classify his income. The IRS does that. He earns about $100,000 as head of Berkshire Hathaway. His wealth comes from stock ownership. Personally he owns shares in other companies as well as fixed income. What is he supposed to do? Reclassify interest as income? That's illegal and he'd go to jail.

he wants buffett to writte a check to the IRS for a few billion dollars. Apparently he thinks it's a good precedent to establish charitable contributions as a significant source of funding for uncle sam.

 

[Freshmaker]

I really don't know what the fuck is wrong with people. My best guess is it's due to the grand delusion that some day, they'll be billionaires as well, so fuck Buffet for wanting them to pay more taxes.

They're terrified of the thought that the super rich will all leave the country to live on an island somewhere.

 

[Metaphoreus]

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[.]

If they're so willing to give away their money, why not just do so? In other words, you don't have to demand more in taxes from people who are willing to give you their money. You don't coerce the willing. Something doesn't click here.

I'd rather see more of his money go to private charity than the government paper shredder if he wants to be charitable, it's infinitely more efficient without the massive government overhead.

Is it actually, or are you just saying that without evidence?

From CNBC, quoting an interview with Buffett:

Becky: OK, there were a couple of emails that came in that people that said if you think the government should be able to tax more money, why don't you just give your money away to the government instead of charity.

Buffett: Well, that's a choice and it's an option that... If I had to give it to a single individual, or make some young Buffett a multi-billionaire, or give it to the government, I'd absolutely give it to the government. I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations, will do a better job with lower administrative costs and better selection of beneficiaries than the government.

Relating to the general topic of this thread (rather than in response to any particular post), here is an interesting article addressing Buffett:

I don't know the details of Warren Buffet's personal taxes, and he hasn't made them public. But the IRS does provide reliable data on effective tax rates—the overall share of their income that various groups pay in federal income taxes (not including state or local taxes) after accounting for all deductions and exemptions. These are different than marginal tax rates, which are paid on the next dollar of income and now peak at 35% for individuals.

IRS data for 2008, for example, show that households in the top 10% of earners (above about $114,000) paid 19% of their income to the feds. Those in the top 1% (above $380,000) paid 23.3%. The top 0.1% of earners, with incomes of $2 million or more, end up paying a slightly lower tax of 22.7%, because they get more of their income from investments (more about this below).

So what about the rest of us? According to IRS data, a median-income household ($35,000) in 2008 paid about 4% of its income in federal income tax.

Mr. Buffett may have been referring to all federal taxes, not just income taxes, when he said the rich pay less than others. His secretary and most workers in America do pay a lot in Social Security and Medicare payroll taxes, but even accounting for them the federal system is highly progressive.

According to the Congressional Budget Office (CBO), middle-class families in 2007 (earning between $34,000 and $50,000) paid an effective 14.3% of their income in all federal taxes. The top 5% of income earners paid 27.9% and the top 1% paid 29.5%. And what about the highest earners? Americans with annual incomes above $2 million paid an average 32% of their income in federal taxes in 2005 (the most recent year for which data are available).

Now, a slight tangent:

I think this is somewhat appropriate in this thread. Really amazing article on the contradictions between those who are the most devout Christians also being the most pro-free market:

http://www.washingtonpost.com/blogs/...aQBJ_blog.html

To say that the Gospels support socialism is misguided. Christ has plenty to say about sharing with one another, but very little about forcing others to share. In fact, there is this little exchange in Acts, which the article you link to cites but misunderstands:

1 Now a man named Ananias, together with his wife Sapphira, also sold a piece of property. 2 With his wife’s full knowledge he kept back part of the money for himself, but brought the rest and put it at the apostles’ feet.
3 Then Peter said, “Ananias, how is it that Satan has so filled your heart that you have lied to the Holy Spirit and have kept for yourself some of the money you received for the land? 4 Didn’t it belong to you before it was sold? And after it was sold, wasn’t the money at your disposal? What made you think of doing such a thing? You have not lied just to human beings but to God.”

5 When Ananias heard this, he fell down and died.

The problem was not that he kept some money back, but that he lied about doing so. In fact, this exchange not only doesn't support socialism, but seems to refute it: Peter asks, "Didn't it belong to you before it was sold? And after it was sold, wasn't the money at your disposal?" That hardly sounds like Peter thought that the Church had an inherent right to either the property or the proceeds from the sale.

 

[LJ11]

Pretty sure Berkshire lost it's AAA rating.

Owning a ratings agency isn't enough these days!

 

[Stinkles]

If they're so willing to give away their money, why not just do so? In other words, you don't have to demand more in taxes from people who are willing to give you their money. You don't coerce the willing. Something doesn't click here.

From CNBC, quoting an interview with Buffett:

Relating to the general topic of this thread (rather than in response to any particular post), here is an interesting article addressing Buffett:

Now, a slight tangent:

To say that the Gospels support socialism is misguided. Christ has plenty to say about sharing with one another, but very little about forcing others to share. In fact, there is this little exchange in Acts, which the article you link to cites but misunderstands:

The problem was not that he kept some money back, but that he lied about doing so. In fact, this exchange not only doesn't support socialism, but seems to refute it: Peter asks, "Didn't it belong to you before it was sold? And after it was sold, wasn't the money at your disposal?" That hardly sounds like Peter thought that the Church had an inherent right to either the property or the proceeds from the sale.

Christ also looked at the legal currency, the Roman coin and answered in response to the question, "Should we pay taxes to Rome?" and said, "Render unto Caesar that which is Caesar's."

You have to be down some fucked up megachurch rabbithole to start interpreting Christ's message as one of naked capitalism.

 

[bsb]

Weren't the super rich taxed at 90% some time ago? Maybe we need to bring that back.

Yep. Handy chart:

 

[John Dunbar]

Christ also looked at the legal currency, the Roman coin and answered in response to the question, "Should we pay taxes to Rome?" and said, "Render unto Caesar that which is Caesar's."

You have to be down some fucked up megachurch rabbithole to start interpreting Christ's message as one of naked capitalism.

I never understood how rich Christians can even exist. People can interpret the Bible any which they want, but there isn't a single group that is given clearer instructions on what they should do as Christians than the rich: give that shit away or no heavens for you.

 

[Gamer @ Heart]

Nice read. Makes me support a bigger national sales tax, that way everybody pays.

 

[brucewaynegretzky]

If they're so willing to give away their money, why not just do so? In other words, you don't have to demand more in taxes from people who are willing to give you their money. You don't coerce the willing. Something doesn't click here.

From CNBC, quoting an interview with Buffett:

Relating to the general topic of this thread (rather than in response to any particular post), here is an interesting article addressing Buffett:

Now, a slight tangent:

To say that the Gospels support socialism is misguided. Christ has plenty to say about sharing with one another, but very little about forcing others to share. In fact, there is this little exchange in Acts, which the article you link to cites but misunderstands:

The problem was not that he kept some money back, but that he lied about doing so. In fact, this exchange not only doesn't support socialism, but seems to refute it: Peter asks, "Didn't it belong to you before it was sold? And after it was sold, wasn't the money at your disposal?" That hardly sounds like Peter thought that the Church had an inherent right to either the property or the proceeds from the sale.

Do those CBO stats include capital gains? Because if not who the hell cares. I don't care WHERE people get the money from. The bottom line is the bottom line.

 

[Marleyman]

Hey Warren - could you pay off my student loan debt?

 

[Metaphoreus]

Do those CBO stats include capital gains? Because if not who the hell cares. I don't care WHERE people get the money from. The bottom line is the bottom line.

I don't know the specifics of the CBO study cited, but why would a study of income exclude capital gains?

 

[brucewaynegretzky]

I don't know the specifics of the CBO study cited, but why would a study of income exclude capital gains?

Because capital gains aren't taxed by the income tax...

 

[EricM85]

Because capital gains aren't taxed by the income tax...

As I posted earlier, "CBO’s analysis of average tax rates assumes that households bear the burden of the taxes that they pay directly, such as individual income taxes (including taxes on interest, dividends, and capital gains)."

 

[Metaphoreus]

Because capital gains aren't taxed by the income tax...

Yes, they are. They're just taxed at a different rate.

 

[brucewaynegretzky]

As I posted earlier, "CBO’s analysis of average tax rates assumes that households bear the burden of the taxes that they pay directly, such as individual income taxes (including taxes on interest, dividends, and capital gains)."

Ok that was all I wanted to know. Stats seem off, but even if they're not it still doesn't account for the relative purchasing power those percentages equate to.

 

[Kai Dracon]

I never understood how rich Christians can even exist. People can interpret the Bible any which they want, but there isn't a single group that is given clearer instructions on what they should do as Christians than the rich: give that shit away or no heavens for you.

Rich Christians tell themselves that God is blessing them for being especially wonderful Christians.

It's not hypocritical wealth - it's God's love. In the form of compound interest!

 

[brucewaynegretzky]

Yes, they are. They're just taxed at a different rate.

Well its all really semantics as to whether you're talking about rate brackets or overall income. It could have been that analysis was based on salary, wages, etc. I honestly just didn't know.

 

[Metaphoreus]

Well its all really semantics as to whether you're talking about rate brackets or overall income. It could have been that analysis was based on salary, wages, etc. I honestly just didn't know.

From what I could find, the article I linked to and quoted is almost certainly referring to the same CBO study which was quoted earlier in the thread.

And, yes, it includes income from capital gains.

 

[thezerofire]

I never understood how rich Christians can even exist. People can interpret the Bible any which they want, but there isn't a single group that is given clearer instructions on what they should do as Christians than the rich: give that shit away or no heavens for you.

The point of the Rich Man encounter is Jesus pointing out what is keeping that man from following him, not that the money is bad in itself. It made the point not to put anything before God.

 

[GaimeGuy]

You don't; The IRS classifies dividends and interest as ordinary income.



GaimeGuy, that 17.65%...marginal or effective rate?

Effective.

The lowest income tax bracket of 10% + 7.65% payroll taxes.

Once you get over the social security wage base (roughly $108k), the payroll tax number starts decreasing from 7.65% towards 1.45% asymptotically. But at that point the dwindling share of payroll taxes is overshadowed by the increasing rates on wages in general so it's insignificant. Basically, for wage earners, without deductions, the minimum tax rate is the minimum income tax bracket plus the maximum individual payroll tax rate (7.65%)

 

[The Technomancer]

A happy country is a profitable country, eh?

But then why the fuck don't the other rich ass fuckers get it?

Seriously. What about "a healthy, happy, well-off workforce is a productive workforce" is hard to understand?

 

[Ether_Snake]

The rich always say that if you give people too much of a big pay check, they won't work as hard.

So does that mean that if we tax the rich more, they'll work harder to make more money?

I call it trickle up economics: government gets more revenue, and the rich works harder to make even more money. Everyone benefits!

 

[SatelliteOfLove]

A happy country is a profitable country, eh?

But then why the fuck don't the other rich ass fuckers get it?

Oligarchical leanings, mostly. It's one of the reasons I'm close to terming this new millenia "The Pyrite Age". I'm no macroeconomics wiz, but a country with weakening prosperity* (and a threat of an increasing social welfare demographic) is headed for disaster. Especially with the aftershocks of the credit crisis still reverberating thru the world's markets (lessons of which have not been learned).

The sad thing is, there are plenty of living strawmen on the left who call for brutal taxation to feed the fear factory.

*This is the big one. Risking putting working class people in a position to find social services a similar economic bracket to working 40 hours a week, coupled with a tax burden that shrinks as you go up the logarithmic income scale. This kind of fiscal policy, if I'm not totally off, would mean that this is actually CREATING a stronger welfare state every time a Dem hat trick happens (more living strawmen).

 

[Ominym]

I can agree, I see him driving around from time to time AND HE NEVER USES HIS TURN SIGNAL.

Actually hes a rather nice gentlemen. And he didn't get to the place he is now, by not knowing shit about money. So for those of you who claim to know better; I would love to know where your billions are.

 

[teh_pwn]

Nice read. Makes me support a bigger national sales tax, that way everybody pays.

You mean poor people pay. The percentage of tax from necessities for rich people would effectively be 0.00000001% whereas poor people it would be 5% of their income.

 

[numble]

Yes, they are. They're just taxed at a different rate.

Ugh, no.

There is income tax, there is capital gains tax, but the 2 are different. Therefore, of course high income earners pay high income tax, but this does not include people that derive their wealth from capital gains.

Also don't quote an opinion piece as an "article" by the Wall Street Journal--that's highly disingenuous.

 

[Metaphoreus]

Ugh, no.

There is income tax, there is capital gains tax, but the 2 are different. Therefore, of course high income earners pay high income tax, but this does not include people that derive their wealth from capital gains.

Consider me amused at your disgust:

Title 26 of the U.S. Code (Internal Revenue Code)

Subtitle A (Income Taxes) (And as opposed to, e.g., Subtitle B (Estate and Gift Taxes) or C (Employment Taxes))​

Chapter 1 (Normal Taxes and Surtaxes)​

Subchapter P (Capital Gains and Losses)​

Maybe you should write Congress and let them know they're mistaken?

Also don't quote an opinion piece as an "article" by the Wall Street Journal--that's highly disingenuous.

Don't accuse me of being disingenuous simply because you have an unusual understanding of the terms I use:

Article: a nonfictional prose composition usually forming an independent part of a publication (as a magazine)

If that isn't enough:

Editorial: a newspaper or magazine article that gives the opinions of the editors or publishers

Anything else?

 

[Saren is Bad]

hehe the tears in this thread are delicious, let me wipe them away with my untaxed hundreds

 

[brucewaynegretzky]

Consider me amused at your disgust:

Title 26 of the U.S. Code (Internal Revenue Code)

Subtitle A (Income Taxes) (And as opposed to, e.g., Subtitle B (Estate and Gift Taxes) or C (Employment Taxes))​

Chapter 1 (Normal Taxes and Surtaxes)​

Subchapter P (Capital Gains and Losses)​

Maybe you should write Congress and let them know they're mistaken?


Don't accuse me of being disingenuous simply because you have an unusual understanding of the terms I use:

If that isn't enough:

Anything else?

This is what I was getting at. I really don't think the CBO numbers can be accurate. Maybe they aren't including earnings in holdings that people don't take out of their investments. That would seriously mask how much they really made.

 

[numble]

Consider me amused at your disgust:

Title 26 of the U.S. Code (Internal Revenue Code)

Subtitle A (Income Taxes) (And as opposed to, e.g., Subtitle B (Estate and Gift Taxes) or C (Employment Taxes))​

Chapter 1 (Normal Taxes and Surtaxes)​

Subchapter P (Capital Gains and Losses)​

Maybe you should write Congress and let them know they're mistaken?


Don't accuse me of being disingenuous simply because you have an unusual understanding of the terms I use:

If that isn't enough:

Anything else?

It's an op-ed in the Wall Street Journal, you specifically styled it like it was a "quote" from the Wall Street Journal. Since you like looking things up, go look up style guides and when you can say a piece is representative of the publication. You can only do so if: 1) it's a journalistic news article, 2) a piece from the editorial board itself. Not submissions to the op-ed pages. Op-Ed submissions do not represent the views of the publication, and "quoting" the publication as if it displayed the views quoted is improper.

You're right that capital gains are placed under the section on income taxes, but it is effectively pulled out and taxed separately. Otherwise these sections, determining the rate on taxable income, would apply:
§ 1. Tax imposed
(a) Married individuals filing joint returns and surviving spouses
There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2 (a)),
a tax determined in accordance with the following table:

If taxable income is: The tax is:
Not over $36,900 15% of taxable income.
Over $36,900 but not over $89,150 $5,535, plus 28% of the excess over $36,900.
Over $89,150 but not over $140,000 $20,165, plus 31% of the excess over $89,150.
Over $140,000 but not over $250,000 $35,928.50, plus 36% of the excess over $140,000.
Over $250,000 $75,528.50, plus 39.6% of the excess over $250,000.

 

[Metaphoreus]

This is what I was getting at. I really don't think the CBO numbers can be accurate. Maybe they aren't including earnings in holdings that people don't take out of their investments. That would seriously mask how much they really made.

I'm not sure how what I said was what you were getting at, but it's true that a person doesn't have "income" simply because, e.g., stock increases in value--that gain hasn't yet been realized. But this doesn't affect the CBO numbers. They're looking at tax rates on income, not unrealized increases in net worth. So, if I understand you correctly now, I think you may have a point, but an increase in value isn't worth much until it's realized, anyways--the value could always go down again.

 

[empty vessel]

Consider me amused at your disgust:

Title 26 of the U.S. Code (Internal Revenue Code)

Subtitle A (Income Taxes) (And as opposed to, e.g., Subtitle B (Estate and Gift Taxes) or C (Employment Taxes))​

Chapter 1 (Normal Taxes and Surtaxes)​

Subchapter P (Capital Gains and Losses)​

Maybe you should write Congress and let them know they're mistaken?

They are both taxed as income, but they are taxed as different kinds of income. The familiar income tax brackets that you know do not apply to capital gains. They only apply to what is called "earned income." Different rates apply to capital gains, which are considered "unearned income," because it isn't, you know, earned through labor.

 

[TacticalFox88]

Fuck Clinton levels, I think we need to go into the forties at the very least, hell if we can the fifties.

 

[Metaphoreus]

It's an op-ed in the Wall Street Journal, you specifically styled it like it was a "quote" from the Wall Street Journal. Since you like looking things up, go look up style guides and when you can say a piece is representative of the publication. You can only do so if: 1) it's a journalistic news article, 2) a piece from the editorial board itself. Not submissions to the op-ed pages. Op-Ed submissions do not represent the views of the publication, and "quoting" the publication as if it displayed the views quoted is improper.

I didn't realize these forums had a style guide. I quoted it as coming from the WSJ because I knew that that would hurt its credibility with some on these forums, so I wanted to get that out of the way. And, of course, since we're being so pedantic, what I said was that the article was "originally posted" by the Wall Street Journal, which I don't think you can dispute. (If it makes you feel better, I can change it to "Originally Posted by the senior economics writer for the Wall Street Journal's editorial page").

You're right that capital gains are placed under the section on income taxes, but it is effectively pulled out and taxed separately.

Yes, you're right. But which part of what I said when I said that capital gains are "taxed by the income tax" and "taxed at a different rate" do you think you're contradicting?

They are both taxed as income, but they are taxed as different kinds of income.

So we agree, then?

 

[Dude Abides]

Relating to the general topic of this thread (rather than in response to any particular post), here is an interesting article addressing Buffett:

What's interesting about bog-standard Republican talking points on taxes from a well-known ideologue? He does a predictably poor job refuting Buffett on the merits. It's hard to see some screaming injustice in the fact that a person who earns 40 times the income another person does is effectively taxed at roughly double the rate.