Monday, November 26, 2012

Noted "Patriotic Millionaire/Billionaire" out pedaling his distortions again


Warren Buffett is back in the news again calling for higher taxes on the super-rich like himself.*

From Yahoo News:

Warren Buffett, the legendary investor who changed the debate about U.S. tax reform in 2011 with a call for the rich to pay more, is now calling for minimum tax rates for millionaires.

In a New York Times editorial printed on Monday, Buffett suggested Congress move immediately to implement minimum taxes of 30 percent on incomes of $1 million to $10 million and 35 percent above that.

"A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultra rich paying rates well below those incurred by people with income just a tiny fraction of ours," Buffett wrote.

"Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy," he added.

The new push is in keeping with the one he made in the same newspaper in August 2011, in which he decried the "coddling" of the super-rich. He used himself and his secretary as an example, noting that her tax rate was much higher than his even though her income was just a tiny fraction of what he made.

"Warren Buffett's secretary" became a political meme following that editorial, and the said secretary, Debbie Bosanek, was ultimately a guest of President Barack Obama at this year's State of the Union address.

If this tired chimera of Buffet's secretary paying more in taxes is going to be trotted out again, we're going to shoot it down again because it is misleading and given the context of it being a presidential campaign meme that it was in 2012, shamelessly cynical.

You see, the reason Buffett's secretary pays more in income tax is because she makes more income (salary) than does Buffett. Buffett, nobly, allows himself an income salary of only $100,000 where he grants his secretary a salary far greater than that (we've heard it rumored anywhere from $250,000 to $400,000).

Naturally, then, his secretary is going to be paying more taxes on her salary income. Obviously, where Buffett derives the majority of his income is in capital gains and dividends that are taxed at far lower rates than the highest marginal income tax rates that hit his secretary's salary (15% vs. 33-35%).

So, we don't need higher taxes on the rich. What we need and what Buffett would do voluntarily if he wasn't being so dishonest in making his argument, is billionaires to start paying themselves salaries of, well, billionaires. Start paying themselves salaries commensurate with what they are worth. Instead, these so-called patriotic millionaires and billionaires are merely acting in the rational manner that any of us would in shielding their income from getting gouged by the man in a manner totally in keeping with the law.

That Buffett wraps himself in the flag, however, reveals Buffett to be merely a tool... and a tool of the President in his continuing class warfare.

Besides, the President himself acknowledged raising taxes on the rich would do nothing to close the deficit gap or pay down the debt thus implicitly admitting to his own stoking of resentment of the rich.

* We've blogged about this issue several times before, so if it seems old hat, we apologize. Sometimes, however, it's good to remind ourselves and others of just why it is an idea like Buffet's doesn't pass the sniff test and which also sets off our highly tuned and calibrated B.S. alarm.


drozz said...

i say call his bluff: the rich should pay more.

then tax wealth instead of income, and watch what happens


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