All You Can Eat Buffett

In an op-ed piece penned in the New York Times, billionaire Warren Buffett perpetuates the liberal (self) hatred for the rich by complaining that the rich are not paying their fair share despite sitting atop their ranks.  Buffett, and other liberals do not feel the wealthy are contributing their fair share to Uncle Sam.  Says Buffett:

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

[…]

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

For now we will completely ignore the propaganda that the wealthy need to share in the sacrifice since the top 10% of income earners already pay 70% of all federal income taxes, while nearly half of Americans have no tax liability at all.  And if we (read: liberals) were serious about spreading the sacrifice, you’d think they’d want those who have no sacrifice to have any at all.  But we know they are not serious.  How do we know this you ask?  For starters, Buffett, and the wealthy of his political bent use expensive tax accountants to utilize as many tax loopholes as possible in order to pay the fewest taxes as legally (or illegally) as possible.  The government even has a system in place for generous fat cats to impose a self-tax, which I am sure is not in the browser history on Buffett’s computer.  But I digress.

What does Buffett hope to accomplish with higher tax rates for the wealthy?  Will we solve our budget woes?  It would seem that he — they — believe we are under-taxed, not over-spent.  Is that right?  Are we under-taxed?  According to economist Walter Williams, no.

This year [2011], Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above.[…] All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there’s a problem because there are 224 more days left in the year.

How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits.[…]  Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June.

According to Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August. The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress’ voracious spending appetite. They’re going to have to go after the non-rich.

This is a rather harsh reality that liberals and ideologues are obliviously ignorant to, or are hoping the voting public is.  Even if the U.S. Government was to confiscate 100% of the wealthy’s income; and 100% of the wealthy’s assets leaving them bankrupt; and 100% of the 500 top earning evil corporation’s income, there still wouldn’t be enough money to pay the bills.  How much more evidence do we need before we can convince even the most staunch of liberals that we have a spending problem, and not a revenue problem?  Basically, it doesn’t matter how much you tax the wealthy, there’s just not enough money.  It’s not even possible to cover all the spending by making the rich pay their fair share.  Not — even — possible.  So if it isn’t even possible to out-revenue the spending, then by definition, the financial problem is spending.

If you can’t see this, you are so blinded by disdain for those who have more than you, you can’t even be reasoned with.  If you can’t be reasoned with, please leave the voting to those who can.

____________________________________

UPDATE: From The American Thinker: Taxing Warren Buffett’s Rich People

Comments

  1. Warren is welcome to pay all the extra taxes he likes. Coveting: Still a sin.

  2. I think that is the rub. No one is required to take every tax deduction available (remember Elvis Presley). By taking deductions, retaining accountants to secure deductions, and not simply mailing in a little extra belies their blustering.

  3. Terrance H. says:

    You know the problem is that everyone is under the delusion that they’re going to be rich one day, and so figure they’ll argue against tax increases now while their working their way up.

    You’re cutting your own throat.

    • What a candid admission, T. I actually have no projected plan to become wealthy. I don’t play the lottery, I don’t play the market, I don’t stand to benefit from a hefty inheritence. It’s actually about the “fairness” of the issue with me. I don’t hate people just because they have more than me. I don’t hate people because they have 100 times what I make in 10 years.

      Our peoblem is spending, and it has nothing to do with George Bush. This president has added to the debt in 2 and a half years what it took Bush to add in 8 years. Bush’s worst deficit was his last year in office at about 500 billion, Obama has tripled it every year in office. Now Obama want to deamonize the wealthy because there are so few. The problem is he has spent so much that there isnt even enough money controled by those whom he claims needs to “share” more of it. Dude, you’re being taken for a ride.

      • Terrance H. says:

        Fairness? It’s not fair that some people are born with a silver spoon in their mouth while the rest are resigned to utter squalor, raised by lowlife parents. They start at a significant disadvantage. So, if you want to talk about fairness, then become a socialist.

        Our problem is spending and a failure to collect the tax revenue that is already on the books. The Republicans want to lower taxes? Fine. Propose something that does it, but until then, let’s get rid of the loopholes. Let’s collect the percentage already on the books. But, of course, the Right doesn’t want to do that….

        Obama had a bigger deficit, yes. Why? A bad economy he tried to improve. Why? Perhaps because of unfunded wars and tax cuts that weren’t paid for, along with almost no regulation of the banking industry.

        I blame BOTH sides. That’s fairness – and reality.

        • Fairness is equal opportunity, not equal outcome.

          Like I just said to George, we already collect the percentages on the books. But the wealthy choose to pay themselves through investments rather than income. So they pay capital gains taxes rather than income taxes. All your liberal heroes do it as much as conservatives. The difference is your liberal heroes are lying to you.

          Spare me about inherited financial crisis. Obama said he could fix it. If you think Bush spent too much, Obama tripled it. I suppose the way to correct too much spending it to spend even more. But that reasoning only works on democrats.

        • Terrance H. says:

          Fairness is equal opportunity, not equal outcome.

          And that’s not what we have in this country, notwithstanding the popular myth. I worked my way up from absolutely nothing because I started with nothing. I have friends who started with everything. I was lucky, but some people – most people – aren’t as fortunate.

          The difference is your liberal heroes are lying to you.

          I don’t have any liberal heroes.

          Spare me about inherited financial crisis.

          Yeah. We don’t want facts getting in the way of an otherwise good argument…

          :-)

          • No one is forced to skip classes, no one is forced to blow off homework, no one is forced to hang out with friends instead of studying. A failed life can always be traced back to a wasted FREE education.

            Its not that you know people who didn’t have opportunities, you know people with little to no initiative. You know people with a defeatist and victimized mentality.

  4. I don’t disagree that the United States has a spending problem, and healthy cuts to government spending are necessary if America wants to turn their economy around. I also, unlike many “liberals” think that Obama’s commitment to ideology in a time of fiscal limitations shows a lack of proper leadership. I felt the same way with George W. Bush, that his ideological commitment to geopolitical manifest destiny showed a lack of proper leadership, especially in the face of mounting deficits and a slowing economy.
    What bothers me is that regardless of who wins in 2012, I will likely be bemoaning a lack of vision in the next President, who will continue, I’m sure, to follow the path to their own personal Utopia regardless of whether they find themselves on the precipice of financial disaster. If Obama wins, I expect more social spending at a time when increased spending seems entirely inappropriate- healthcare is necessary, yes, but if I necessarily need a new car because mine is spent, I don’t go out and buy a new one if I need to miss a mortgage payment to make it happen. Perhaps I wait and take the bus, or maybe I buy a $500 clunker to get me by. You can love universal healthcare all you want, but now is hardly the time for massive policy commitments.
    If a Republican wins, and I expect that it might be a Bachmann, Palin or Santorum ticket, I can look forward to a leader ideologically engaged in cutting taxes to levels that will reduce income to unworkable levels- all the while without the “balls” to cut deep into military spending and national security. What we need is a George H. W. Bush, or a Bill Clinton- a leader who doesn’t feel committed to an ideological mandate at any cost.
    I think we are at least two economic cycles of fiscal prudence away from being able to be idealistic about tax cuts or health care/social infrastructure. Apart from a Romney ticket (or better still, a Huntsman ticket), I think we will end up with replacing pipe dreams with pipe dreams, and America is just a few years away from more serious economic problems. Or Obama can grow some balls and make serious spending concessions and moderate tax hikes. I won’t take that to the bank.
    Listen, Buffet is right, the rich can and should pay more taxes, but that isn’t the whole of the answer. There needs to be real motivation to cut the deficit and get spending under control, and that will take someone who is not afraid to make near term concessions for long term gain.

    • Why should anyone pay more taxes just because they make more money? Why shouldn’t everyone – including the non-taxpayers now – pay income tax at the same rate? If everyone paid 10% of their income, that would be more tax than what we take in now. But the problem is, we DON’T NEED TO ADD MONEY TO THE GOVERNMENT’S COFFERS!!!! We need to cut all the wasteful spending, all the unconstitutional spending, and that would fix the problem!

      • Well Glenn,
        No one here, nor Warren Buffet himself, has said that anyone should pay more taxes because they make more money. I think the consensus among “pinko liberals” is that wealthy people ought to pay roughly the same marginal tax rate or perhaps just slightly less than the average person, and that they ought not have so many more avenues to shelter their income from taxes than other Americans. That seems a far cry from “The wealthy should be taxed more than the middle class”, which is how you apparently see the issue.
        If the “non-taxpayers”-and I’m not American so I assume that you are referring to Americans who either fall below the basic exemption for income or who receive government subsistence-were to start paying a 10% tax on income, the result would be either a need to increase Government subsidies in order to afford them a living wage (additional spending increases) or forcing employers to pay higher wages to compensate for the taxes through higher minimum wage initiatives (anti-business). Of course, this sets aside the other option which is to forget about doing anything for these people, and assuming that they will happily work every day regardless of whether their wage sustains even simple sustenance.
        We certainly do not necessarily need to add income into Government coffers, assuming that we can all agree to getting less government services and an anemic military, as well as stripped down border controls and homeland security. I’m not going to argue that the Government needs more money- unless Americans really want to have the types of infrastructure and services they currently enjoy. If they do, then we still need to trim down unnecessary and wasteful spending, but all expenditures are not unnecessary or wasteful. We need realism, not idealism.

        As an aside, what exactly is “unconstitutional spending”? Is there something in the constitution that prevents the government from offering social infrastructure, services, or a military? Again, I’m not American, so this confuses me.

        • Buffet has not necessarily said here, but like other liberals have said elsewhere that the wealthy can afford it and should pay at higher rates, harken back to the euphemism “rolling back the rates” which means raise the rates to where they were when…

          The whole “I as a rich person can afford more so please raise the taxes” is just so hypocritical. What makes it so ugly is that they can pay as much as they want, but don’t. They can simply write a check, but don’t. The fact that “soak the rich” is touted as some kind of solution to our financial trouble is insulting to the intelligence of everyone with access to Google. The liberals decry fear based politicking but run ads that show republicans shoving granny off a cliff because they want to cut spending (which is the actual problem). They soapbox against the rich in an effort to gain support from the envious have-nots when they know damn well what I just posted above is true.

          They prey on idiots.

        • John,
          I’m not saying no-one has claimed that the rich should pay a higher tax rate than the rest of us- if I said that than I take it back. I misspoke.
          Certainly people have claimed that the rich should pay at higher tax rates than the middle class.
          I thought I said that Warren Buffet doesn’t say in the article that he thinks that the rich should be taxed more than the middle class, only that they should be taxed more than they are presently. I thought I was saying that I have never and would never say that I think the rich ought to be disproportionately taxed in comparison to those who find themselves in the Upper Middle Class. I thought I was talking about he article in question and the people who have chimed in on the thread thus far. I suppose I thought wrong, I apologize.

          This is at least the third time since I started frequenting your blog that you have cited an article to make a point, and when called out for misrepresenting the article, you then argue that “yes, the article didn’t really say that, but others have.” Why not cite those that actually do say these things? Why not take the Buffet article, since it is topical, and add other links from other sources that point to the liberal quest to hyper-tax the rich?

          I hardly find it hypocritical for the worlds most prolific philanthropist to argue that he should be taxed more while simultaneously filing a legal tax return. I just don’t see it. I would happily pay more taxes if I received better services, yet I still file my taxes with the available deductions (I actually got a cheque one year for an unclaimed deduction, seriously). I guess you just read “overtax the rich” when people say “fairly tax the rich”.

          • He is saying the rich should be taxed higher. What is going over your and other’s heads is they are taxed just as everyone else. They are taxed exactly like his poor secretaries. The fact that his secretaries are taxed at a higher percentage is Buffet’s own fault. Let me explain.

            The reason the rich pay a lesser percentage is their income is generated through means that are not counted as earned income to be taxed by an income tax rate. They pay themselves in a manner (dividends) so they pay capital gains tax, instead of income tax which is a lesser rate. He could pay his secretaries through the same means as he pays himself and he could help them out. He could also stop receiving his income in a way which he can pay at the capital gains rate, and start paying himself a regular salary so he would pay an income tax rate that would be 35% instead of his averaged 17%. Last year he paid almost $7 million due to his method of income. If he had paid himself the same dollar amount (about $35 million) but as a salary instead of investment gains, he would have paid $12.25 million in taxes without raising a single rate.

            All the liberal millionaires and billionaires who complain they don’t pay enough taxes could do this. The point is they choose not to. Why do they choose not to? Because they feel they are as entitled to their own money just like conservatives, but they don’t have the guts, or the spine to do it. They need poor voters because there’s a hell of a lot more poor voters than rich ones.

            That’s the hypocracy I am railing against. Yes, Buffet is calling for higher taxes. If he’s not, what is he arguing for? He is lamenting that he and his rich buddies were left alone when Obama asked people to sacrifice. He and Zuckerberg both (along with other liberal elites) have been calling for higher taxes for a few years. They already have the power to pay more taxes, they choose not to.

            But why is that? Buffet and other wealthy investors swoop in and buy companies who are about to go under due to higher tax restrictions and makes a bundle of money. And guess what? The money they make buying and selling companies is only subject to capital gains.

            Like I said, they prey on idiots.

        • Our military can stay at its same levels if we’d just bring them home and quit trying to be the world’s police force – think of the money we’d save. Keep our military strong, defend our borders and everything else the fed needs – and is constitutionally authorized – to spend, and you still can cut taxes. The reason taxes are so high are due to massive amounts of pork, bailing out banks and auto makers, welfare paid to able-bodied people, child-care subsidies, National Endowment for the Arts (defund and get rid of it), billions to Planned parenthood, billions to foreign aid to enemies, etc, etc, etc.

  5. I couldn’t agree more that that the nation has a spending problem. I also agree with George’s comment that part of the problem is this unwillingness to cut defense spending. I still believe that defense should take up the largest portion of our annual discretionary spending, but its hard to argue that there are not areas within this subcategory where we can and probably should cut back, so long as we do not get overzealous in our efforts.

    But any talk of reducing deficits and long term fiscal sustainability is pointless unless we also talk about entitlements. Congress can cuts billions in discretionary spending each year, and raise taxes on however man rich people they want to, but none of it will make a dent unless Congress pursues serious entitlement reform. What really bothers me is that every member of Congress knows Medicare, Medicaid, and Social Security are unsustainable in their current form, but hardly anyone (aside from Rep. Paul Ryan) is willing to take a stand on it because they are too sacred to lose their next election.

    Hell, even the GOP 2012 hopefuls are barely discussing entitlements because they know its too contentious. They stick to the old favorites like tax cuts and repealing Obamacare. Until lawmakers are ready to have a serious discussion about this, all the spending and tax plans of both parties are irrelevant and just wasting time.

  6. Terrance, we do indeed have equal opportunity in this country. We have equal opportunity to advance to our personal capabilities. Not everyone is as capable as others, nor do all start out with similar funding. But all have the opportunity to strive for their personal best. The problem is that way too many people prefer entitlements from the nanny gov’t. Too many people want to play the victim card and demand restitution from the gov’t.

    I spent a good part of my teen years in a federal housing project surrounded by gangs which I could have joined. My father was a poor manager of money and filed bankruptcy three times. My parents were divorced. Most of the people I grew up with played the victim card and stayed in the same situation. I decided to do something better. For lack of money or high enough grades to get a scholarship, I joined the Army and spent five years playing with Uncle Sam. During that time I joined a flying club because I wanted a career in aviation and that takes money. When I got out of the Army I still was working towards my goal for the next few years, slowly due to the expense of training. Upon departure from the Army I took the first minimum wage job available while I kept looking for better employment, all the while making sure I demonstrated that I was a reliable worker. 3 1/2 years after leaving the Army I began a 30-year career as an Air Traffic Controller, during which time I worked my way into supervision.

    The point is that everyone in my neighborhood was at least as smart (or dumb) as I was, everyone had the same opportunity to do what I did, but virtually all of them chose to play drugs, booze, and gangs. And it is THEIR children we are supporting on welfare. So don’t give me any crap about lack of opportunity. Everyone has the opportunity to do the best with their abilities.

    • I also want to point out that I am the only one of five children who is still married to my original spouse after 35 years. My parents both married three times and had many other partners. This is the usual way with divorced families. Again, I didn’t like what I saw in my family so I determined to do better. Broken homes are also part of the problem because people give up and play victim rather than rising above it.

    • That’s the thing Glenn, people want to squander their highschool time and education, either by neglect or rejection of it. They choose to go to class, refuse to study. They waste the opportunity to graduate and move higher. Then in their 20s when they have no job and no education, they want to cry foul. They want to decry their lot in life. They forget that they did have the opportunity and they blew it off. You don’t always get to restart from the top when you finally come to your senses about how much life sucks without a good job.

      Opportunity comes early, and many times you only have one shot at it.

  7. Thanks for clarifying your position John. Now that I understand that you merely want the wealthy to stop investing money if they want to raise their taxes, it makes perfect sense. That seems ever so plausible.
    I would continue to ask why a long term capital gains tax need be half of the marginal tax rate, and why we continue to give multiple loopholes from which people might actually be able to pay 0% of a good portion of their income in taxes.
    That seems to be the issue here. Not that we ought to even raise the capital gains tax (I think, in some cases at least, we should) but that we ought to make laws that allow a prudent wealthy investor to pay on average 22-25% of their total income from all sources as tax, if we assume that an average American pays about the same. It seems to me, after doing some research on the subject last night, that this amount seems roughly in line with the marginal tax rates in America, adjusting for some sheltered income. I also notice that if I have a net worth of 1 billion dollars, but manage to only show non-investment income of $32,900, my long term capital gains tax is 0%. If my retired parents lived in America, based on their present revenue stream, I calculated that they would pay around 8% of their yearly cashflow in taxes. Whereas I would pay about 24 %. I’m basing this on the information I could find on American tax policy, not including state and municipal taxes (if you have such a thing).
    For a frame of reference, I currently pay about 28% of my annual income in taxes in Canada, after deductions, and including Provincial- but not municipal- taxes.

    • C’mon George, do you really think I mean the wealthy should stop investing? Or did I mean that they pay themselves in a way as to pay the least amount of taxes, while at the same time complaining they don’t pay enough taxes?

      I would prefer some form of flat tax, between 15-25% applied to all forms of income.

      Also, yes, some states impose an income tax independent of the federal income tax. Some cities, like NYC impose its own income tax. But the usual form of municiple tax would be a property tax imposed on things like houses, cars, and boats. I pay about 28% of my income on federal income tax, another 5% or so. another $400 a year in motor vehicle tax, another $3-4000 a year in property tax, another 6.35% sales tax.

      • So we are saying (almost) the same thing then, that people should have a more even tax rate regardless of income stream? That is refreshing to hear, John. The only caveat I have is that there still ought to be a base yearly amount on which you pay no taxes at all, regardless of total earned income.
        For example, I would advocate a 25% flat tax on all income, assuming that each person did not pay a penny in income tax on the first $10,000. So someone who made $13000 a year would pay $750 in taxes and someone who made 100,000 would pay $22,500 in taxes. I might even advocate for some predetermined amount of sheltered income that could be taxed at a lower 15-20%- to help drive further investment.

        After deductions, you and I pay about the same in taxes, perhaps my burden is even lower- and I get more services than you do- so I think there is something a little wrong with that. We don’t have motor vehicle tax, other than sales tax on POS(point of sale) and a license plate registration of about $80/year. My property taxes are my municipal taxes, and I pay about $2800/yr on a house valued at $190,000. Sales tax is a whopping 13%.

        • I can definately agree with you on your ideal tax scenario — I think completely. I also think the tax burden should also be lowered the more you make after a certain point. Probably after a few million or so. It encourages people to make money and invest. For example, at my old job with the state, the optimal amount of OT hours to work was 16 (2 shifts). The reason being if I worked a third shift that put me in the higher tax bracket and I would only clear (after taxes) an extra $50. Totally not worth it. One extra shift I cleared about $180, 2 shifts about $350. But with 3, only about $400 in the check. So I worked less than I could have because of the punitive effect the tax brackets had.

          I would also get rid of small business (50 or fewer employees, give or take) taxes all together since those taxes are just paid by the customers anyway, not the owner. I would also be supportive of a national sales tax in exchange for lower income tax rates

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