Warren Buffett Taxes His Brain

Dog bites man — not news. Man bites dog — news.

On this principle, NBC News aired a special segment, a while back, featuring billionaire Warren Buffett saying rich guys like him should be taxed more.

What Buffett was really up to was arguing that rich people should pay Social Security taxes on their whole annual incomes, not on just their first $102,000 earned.

For most of us, this feature of FICA withholding never comes up, practically speaking. But we can still understand it. Payroll withholding may be a tax, but it is a tax designed to support a safety net pension program, not to fund highways or rockets or indoor rain forests.

The idea is that after we pay our safety-net pension, our money is ours to use for other things.

This makes sense as long as you think of Social Security as “paying our own way.” But once you think of it like a huge welfare program, then why not tax the rich more?

Politicians will like this idea, ultimately, for it hides under the rug the one thing they want never to mention again: the fact that, for two-thirds of a century, our so-called representatives — of both parties — squandered our retirement nest egg, our “safety net,” with no thought for the future.

With Buffett’s proposal, they would be saved by the rich.

But why would a smart rich guy want to prop up such a swindle?

This is Common Sense. I’m Paul Jacob.

• Episode Number: 1953
• Publication Date: 12/5/2007