Billionaire Warren Buffett created a stir last week, writing in the New York Times, “My friends and I have been coddled long enough by a billionaire-friendly Congress.”
“It’s time for our government to get serious about shared sacrifice,” Mr. Buffett urged, specifically advocating that Congress “raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains.”
Buffett has a point, of course, perhaps several points. Who can defend the fairness, or even sanity, of a tax system in which a man making tens of millions or even billions pays less in taxes, percentage-wise, than someone mowing his lawn and taking home 1/100 of a percent as much income? But, of course, no one anywhere ever defends our federal tax code. Not even the congresspeople who voted it into law . . . and have the campaign contributions to prove it.
Or take the Sage of Omaha’s argument that wages shouldn’t be taxed at higher rates than investment income. The logic is not without some plausibility. Still, my solution would be to cut income tax rates, not to raise the tax take on capital gains.
All of which invariably raises a far more fundamental issue: The size and scope and success of government. You see, to want more tax revenue implies something: that government needs and should have more money, and receive an even higher take of the sum domestic product.
Isn’t that unquestionably what Buffett is saying? Government is not large enough. Government can spend these dollars better than the taxpayers who earned them.
Many conservative politicians and pundits were quick to suggest Buffett put his own money where his mouth is:
- The Fiscal Times story headlined, “Warren Buffett: Stop Whining and Write Uncle Sam a Check.”
- Congressman John Shimkus (R-Ill.) tweeted, “Nothing is stopping Warren Buffett (or anybody) from making a donation to the Treasury if he feels he’s under-taxed.”
- “I’m a little fed up with these people who come on with their big op-eds and admonitions,” said Pat Buchanan on MSNBC’s Morning Joe. “Why doesn’t he set an example and send a check for $5 billion to the federal government? He’s got $40 billion.”
Indeed, why doesn’t Buffett write a check to good ol’ Uncle Sam? I don’t ask rhetorically, but in earnest. What is stopping him from making that donation?
A contribution to the federal treasury is fully tax-deductible, so that’s not the sticking point.
Perhaps it’s a matter of fairness. The Oracle of Omaha doesn’t want to stick his massive toe into a pool of greater taxation until he’s assured that all his “mega-rich friends” will be pushed in as well. Quite understandable on a couple levels, though I view patriotism and duty as a personal — not a merely collective — concern. (In other words, my love of freedom and country doesn’t depend on you seconding that emotion.)
However, what about when Warren Buffett passes from this earth?
Then, the question of fairness seems moot. At that most unfortunate time, his fortune must go somewhere. Even he can’t take it with him.
The money could all go to his kids — “the lucky sperm club” as Buffett once dubbed them. But he has previously stated his three children will each receive only a modest inheritance.
Mr. Buffett has already announced, in fact, that he is giving 99 percent of his wealth to private charity. The Bill and Melinda Gates Foundation is the largest recipient. And Buffett has urged other super-wealthy Americans to pledge 50 percent of their net fortunes to private charity.
Why not, instead, bequeath his entire net wealth, and their entire estates, minus a modest cut for offspring, to the United States Government?
The answer is obvious.
Columnist Cal Thomas answered it in the form of a question: “Why would anyone want to send more money to government which is such a poor steward of it? . . . You would be subsidizing wrong decisions and bad behavior.”
With the waste and fraud and corrupt politics of Washington, no one in their right mind would hand over their life’s savings to Congress — not when they could give it to a legitimate charity.
Whether one agrees with his politics or not, Buffet certainly knows investing. With his actions, with his own billions of dollars, he is declaring, loudly and clearly, that in caring for the sick, feeding the poor, educating future generations and pursuing a myriad of other worthwhile endeavors, the U.S. government is not the best place to invest.
On that, we as a nation have reached consensus: Sell Congress short.
As for Warren Buffett, reading his op-eds will never be as informative as watching where he puts his own money.