Billionaire Warren Buffet is at it again. Remember last summer? Buffet wrote an op-ed in the New York Times (imagine that) titled “Stop Coddling the Super-Rich” in which he lamented the state of affairs in America and how the “mega rich” were spared from contributing their “fair share” of taxes. Now, he has thrown down a challenge that is even more ridiculous than what he wrote for the New York Times.
Back in August, Buffet wrote that his income tax bill amounted to $6,938,744. He notes that this came out to be only 17.4 percent of his taxable income. And because of this logic (or lack thereof), Buffet came to the conclusion that the rich are getting a break and that they need to pay more.
Barack Obama loved this! He came up with a tax plan called the Buffet Rule. He gave speeches blasting the rich… saying that they didn’t pay their “fair share.” He noted, as Buffet did, that Buffet’s secretary is taxed at a higher rate than the billionaire himself. Blah, blah blah.
Rhetoric aside, the facts are well known. The so-called “rich” fund most of the government. They pay most of the taxes. With the tax cuts of George W. Bush, half of all working Americans don’t even pay federal income tax! The reason Buffet’s secretary is taxed at a higher rate is because she is still earning a paycheck and paying income tax on it. Back when Buffet’s primary source of income was a paycheck, guess what? He was taxed at a higher rate too. He paid his income taxes all along the way. Then, he used his ingenuity, began investing, and more and more of his “income” was made off of money he already paid income taxes on. That’s why his rate is lower.
With the Buffet Plan that Obama has outlined, everyone making $200,000 or more would see his or her taxes go up. Unemployment is still high, yet Obama wants to tax the job creators even more. How is that supposed to create jobs?
Now, Buffet has laid down a challenge to Congress. As reported at Fox Business: “The billionaire is now offering to donate $1 towards paying down the national debt for every dollar donated by a Republican in Congress.” The offer doesn’t cover Senate Republican Leader Mitch McConnell. For him, Buffet said he would pay $3 for every dollar donated by McConnell.
Perhaps Buffet wanted some air time again or was just bored, but nothing in his challenge makes any sense. The problem is not about taxes. The problem is about spending. The federal government spends too much money! Spend less, tax less. What’s so hard to understand about that?
In her report, Elizabeth MacDonald at Fox Business notes that in addition to primarily paying taxes on capital gains, Buffet also lives on loans taken out against his assets, and lowers his tax bill further by deducting that interest on his returns. And he makes generous charitable contributions, which he can also deduct on his tax returns.
Indeed, Buffett’s second of three contractual conditions for his ongoing pledge to the Gates Foundation reads: “The foundation must continue to satisfy the legal requirements qualifying Warren’s gift as charitable, exempt from gift or other taxes.”
MacDonald’s best line in her analysis is this: So if Warren Buffett wants to reduce the deficit, he should encourage policies to create more millionaires, not lobby to tax them more.
This country used to be one in which someone would look at the “rich guy” and say, “I want to be like him.” Now, we live in a country in which the government says, “Look at that rich guy. We will take from him and give to you.” This will NOT make people more successful. All Obama’s rhetoric does is promote jealousy and laziness. Buffet just adds fuel to the fire.
If Buffet wants to pay more in taxes… go ahead! Be my guest. But that would be like throwing money into the wind. Would I invest money in a sinking ship? No. I would invest money in a company that would fix the sinking ship! We need to fix the federal government, not throw more money at it.