Contributor Post Created with Sketch. Warren Buffett Stands to Gain from Higher Taxes on the Rich

 

He’s at it again.  Warren Buffett has taken to the op-ed pages of the New York Times today to sound the bugle once again for his raise-taxes-on-the-rich crusade.  Buffett writes,

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

…[F]or those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

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.

How noble and generous sounding — that is, until you realize that Buffett has quite a lot to gain from higher taxes on the super rich.  The Washington Examiner’s Tim Carney unearths Buffett’s suspect motives.

Buffett Profits from Taxes He Supports

Buffett regularly lobbies for higher estate taxes. He also has repeatedly bought up family businesses forced to sell because the heirs’ death-tax bill exceeded the business’s liquid assets. He owns life insurance companies that rely on the death tax in order to sell their estate-planning businesses.

Buffett Profits from Government Spending

Buffett made about a billion dollars off of the Wall Street bailout by investing in Goldman Sachs on the assumption Uncle Sam would bail it out. He also is planning investments in ethanol giant ADM and government-contracting leviathan General Dynamics.

If your businesses’ revenue comes from the U.S. Treasury, of course you want more wealth.

Let’s call a spade a spade: Warren Buffett, successful multi-billionaire that he is, is a lobbyist representing himself and his own monied interests.  There’s nothing wrong with that in and of itself, but let’s not let liberals get away with this cunning charade of noblesse oblige when the full picture reveals that they have much to gain from their superficial “generosity.”

There are 43 comments.

  1. raycon and lindacon Inactive

    George Soros without the Greek accent !

    • #1
    • August 15, 2011, at 9:56 AM PST
    • Like
  2. tabula rasa Member

    The day Buffest writes a voluntary $5 billion check to the “Office of Public Debt,” I might believe him. Until then, it’s all hot air.

    • #2
    • August 15, 2011, at 10:02 AM PST
    • Like
  3. John Boyer Member

    Coddling? As is frequently pointed out, nothing is stopping Warren from cutting a big fat check to the IRS voluntarily, out of civic pride. Lead by example Warren and maybe your tax-profiteering wont seem so opportunistic.

    • #3
    • August 15, 2011, at 10:02 AM PST
    • Like
  4. Mel Foil Inactive

    “Don’t burn me, I’m a reformed witch. Burn those witches over there.”

    • #4
    • August 15, 2011, at 10:03 AM PST
    • Like
  5. Doctor Bass Monkey Inactive

    Lobbyist wasn’t the word that came to mind. Parasite or leech is more apt. Pushing for higher taxes so your company can steal family businesses out from under them may not be illegal, but it is certainly unethical.

    • #5
    • August 15, 2011, at 10:19 AM PST
    • Like
  6. David Williamson Inactive

    Mr Buffett is free to donate as much money as he likes to the federal government. But he chooses to donate it to good causes, instead. This is fine, but he is a hypocrite… oh, wait, a hypocritical rich liberal – how unusual!

    • #6
    • August 15, 2011, at 10:23 AM PST
    • Like
  7. Steven Zoraster Inactive

    Mr. Buffett fails to provide an estimate of the increased tax revenues his tax the rich option would produce. A major failing in his op-ed piece. This makes if worthless.

    • #7
    • August 15, 2011, at 10:29 AM PST
    • Like
  8. Jack Warren Inactive

    I’m afraid that Diane’s well thought out argument is a distraction, much as the whole Obama birth certificate thing. The previous commenters here are correct — just let Mr. Buffett cut a check to the treasury. Or to paraphrase Dennis Miller’s oft-repeated question — how can guys like Warren Buffett sleep at night believing they didn’t give their “fair share”?

    I believe it was Tim Pawlenty that pointed out that Minnesota set up an account for such voluntary donations. To date the balance in that account is $0.

    • #8
    • August 15, 2011, at 10:42 AM PST
    • Like
  9. Owl of Minerva Inactive

    The vested interest is bad enough; however, using liberal guilt to sell the idea is what separates those like Buffett and Soros from the rest. The portrayal of a higher moral sense is the kind of class warfare that betrays how the Left imagines it. There is no organic intellectual who descends from on high to deliver the new consciousness to the unaware underclass. Instead, there are those who seek to profit from the existing order by playing off existing sympathies and having the right people in place.

    These guys capture the narrative by funding organizations who depend on their support. The organizations amplify the narrative to give the press something they’re already inclined to believe. Either dupes or wanting a piece of the action.

    Honestly, do people think Buffett got rich from paying taxes?

    • #9
    • August 15, 2011, at 10:46 AM PST
    • Like
  10. AmishDude Member

    Even more simply, Buffet’s competitors are at a relative disadvantage if the “rich” are taxed because he is much richer than they are.

    If he’s arguing for a Buffet-only Tax, then I’m all for it.

    Except for Golden Corral. Keep your hands off them.

    • #10
    • August 15, 2011, at 10:53 AM PST
    • Like
  11. Liver Pate Inactive

    George Soros without the Greek accent !

    And Britain is Greece without the Souvlaki.

    • #11
    • August 15, 2011, at 10:54 AM PST
    • Like
  12. jetstream Inactive

    Buffet and Munger are the Grand Marshals of crony-capitalism – they have honed it to an art form. By comparison Jeff Immelt is an apprentice.

    In 2009, Munger even wrote an opinion piece in the WSJ championing the bail out of the “big guys” (Buffet and Munger) as not only necessary but actually an entitlement – in his opinion, the “little guys” had no such claim or entitlement . Geez, talk about the need for entitlement reform.

    • #12
    • August 15, 2011, at 10:55 AM PST
    • Like
  13. michael kelley Inactive

    He write the op-ed to urge the government to raise taxes.

    If he is such a genius, why doesn’t he offer his managerial and executive experience and offer advice on reducing spending and increasing efficiency?

    Had he not been bailed out by the government, Buffet would have gone the way of Jesse Livermore.

    • #13
    • August 15, 2011, at 10:58 AM PST
    • Like
  14. C. U. Douglas Thatcher

    Thanks for this posting. One of my LA liberal friends posted a link to the NYT editorial this morning! It’s nice to see a concise rebuttal.

    • #14
    • August 15, 2011, at 11:21 AM PST
    • Like
  15. Tocqueville Member

    I’m finding Buffet to be tiresome at this point. I would like him to actually put out a Buffet plan which states clearly which taxes he’d increase and how much revenue he expects the government to get from it. If he isn’t willing to do this then please be quiet and get on with the business of using your money to invest in real businesses that create real jobs. This is what America needs right now. Not silly self indulgent pieces like this.

    • #15
    • August 15, 2011, at 11:35 AM PST
    • Like
  16. flownover Inactive

    Giving money to charity is called philanthropy and it is a fine and noble thing.

    Giving money to the US government is called involuntary taxation and the ways in which the money is spent include some that would curdle your blood, endanger your children, and enrich your mortal enemies.

    So there is a difference Warren. Quit being so damned disingenuous. People in the Midwest are embarrassed by your sophist philosophy. The same way we were embarrassed by your living with your mistress while your wife languished alone.

    • #16
    • August 15, 2011, at 11:38 AM PST
    • Like
  17. Diane Ellis Contributor
    Diane Ellis Post author
    Jack Warren: I’m afraid that Diane’s well thought out argument is a distraction, much as the whole Obama birth certificate thing. The previous commenters here are correct — just let Mr. Buffett cut a check to the treasury. Or to paraphrase Dennis Miller’s oft-repeated question — how can guys like Warren Buffett sleep at night believing they didn’t give their “fair share”?

    I believe it was Tim Pawlenty that pointed out that Minnesota set up an account for such voluntary donations. To date the balance in that account is $0. · Aug 15 at 10:42am

    See, I agree with you, but the problem with this “If they believe they should contribute more, they should just voluntarily give more to the Treasury” line of reasoning is that it can come back to bite us in the butt. For instance, I think it’s fine to be opposed to the mortgage interest deduction in principle, but to still claim the deduction while it exists. And it’s fine to want to eliminate the government’s role in student loans, but to take advantage of them so long as they’re available. Why deliberately put yourself at relative disadvantage?

    • #17
    • August 15, 2011, at 11:59 AM PST
    • Like
  18. cdor Member
    Steven Zoraster: Mr. Buffett fails to provide an estimate of the increased tax revenues his tax the rich option would produce. A major failing in his op-ed piece. This makes if worthless. · Aug 15 at 10:29am

    Perhaps, as I have written here on several occasions, I can help Mr. Buffet out a little (presumptuous am I not?). The total income of M’s and B’s in this country is about 930B annually. We presume they already pay 36% Federal now or about 350B. How about we just take the rest? We are still left with Trillion dollar deficits thanks to his clan of political operatives. It really astounds me. Was there even one sentence in his essay on cutting spending? I hope so, but I wouldn’t bet on it. Henry Bloch of HR Bloch and Co wrote a similar editorial only he mimics Obama’s talking points like a parrot. He believes everyone making 250K in this country have it so good they should pay more in taxes. He mentions spending cuts in one sentence of the article. Does anyone really believe that if the citizens pay more Washington will spend less?

    • #18
    • August 16, 2011, at 1:23 AM PST
    • Like
  19. wilber forge Member

    Oddly enough, Buffet did make around 400 million last year and enjoyed a tax bracket of 17% . And it is true that the man is in a different tax bracket than his Admin. Asst. The income is not classified in the same context that most accept as true income the rest of the populace fall under.

    Easy for the man to to make such comments when he knows full well his is not part of that system the rest of us seem to be saddled with.

    Apples and Oranges there…

    • #19
    • August 16, 2011, at 1:27 AM PST
    • Like
  20. cdor Member

    Dianne Ellis

    “See, I agree with you, but the problem with this “If they believe they should contribute more, they should just voluntarily give more to the Treasury” line of reasoning is that it can come back to bite us in the butt. For instance, I think it’s fine to be opposed to the mortgage interest deduction in principle, but to still claim the deduction while it exists. And it’s fine to want to eliminate the government’s role in student loans, but to take advantage of them so long as they’re available. Why deliberately put yourself at relative disadvantage?”

    Let me take a wild guess. How about to not do so would be against your principles? Or maybe this isn’t about principles, just politics.

    • #20
    • August 16, 2011, at 1:36 AM PST
    • Like
  21. Diane Ellis Contributor
    Diane Ellis Post author

    The one fair point that Buffett does make is that the mega rich are subject to a much lower tax rate on their income than a family making $300,000/year in salary is because the mega rich make the bulk of their money with financial instruments, which is only subject to the capital gains tax. The top marginal rate on long term capital gains is only 15% (20% when Bush tax cuts sunset), compared to the much steeper top income tax bracket of 35%.

    But his solution, which is to increase capital gains tax rates across the board, would have a lot of adverse consequences on American businesses that depend on investment, on the already languishing real estate market, and on white collared professionals who invest a portion of their salary into the stock market and are then subject to double taxation via cap. gains on their profits.

    • #21
    • August 16, 2011, at 1:42 AM PST
    • Like
  22. Diane Ellis Contributor
    Diane Ellis Post author
    cdor:

    Let me take a wild guess. How about to not do so would be against your principles? Or maybe this isn’t about principles, just politics. · Aug 15 at 1:36pm

    I don’t follow. Are you saying it’s wrong to take the mortgage interest deduction even if you believe that it should be abolished because of its distortional effects on the market?

    • #22
    • August 16, 2011, at 1:45 AM PST
    • Like
  23. Todd Inactive

    If anyone is interested, this was my take on the Buffett op/ed over at the Member feed.

    As for the preferred taxation on capital gains, I never quite understood the enthusiasm for exempting capital gains from taxation. I would be for it, as long as all income was exempt from taxation.

    Labor is a form of capital – human capital, and it’s the only “capital” some people have. But I hear people argue that it should not be taxed, and I don’t get it.

    The solution is a tax system where all income is taxed at the same, low, flat rate. We got pretty close to that with the 86 tax reform.

    • #23
    • August 16, 2011, at 1:53 AM PST
    • Like
  24. Look Away Inactive

    I have long believed that Warren Buffet learned a lesson from his mentors on Wall Street, give money to those you fear. So Warren, like his ultra-rich buddies, throw some money at the left and purport to be Democrats. Afterall, who are you most afraid of showing up at your mansion and spray painting ” Fascist” on your drive way, Diane Ellis of Richochet or Nancy Pelosi?

    So Warren and the uber wealthy throw some money at liberal causes, relieve their guilt and are able to trash those condescending folks on the right (as I was called by a co-worker today) Who says they don’t understand how insurance works. You pay a small premium and you get a lot of protection from the political perils.

    What Warren and his ilk do not remember from the history books is that this placation never works in the long run, ask the aristos in France who embraced the mob during the Revolution and still lost their heads!

    • #24
    • August 16, 2011, at 2:09 AM PST
    • Like
  25. The New Clear Option Inactive

    What Look Away says above.

    Aside from the ways Buffet benefits financially that Diane’s OP point to, this is advertising aimed at the very audience to whom Buffet’s big box stores like Nebraska Furniture Mart are anathema. They decry the mall-ing of America and big Wall Street players’ financing of it. Before this latest public penance by him, much of his target audience would be loathe to be seen patronizing any of Buffet’s businesses.

    This op-ed piece costs Buffet nothing, and he stands to gain every sort of media largesse, since neither he nor his buddy in the White House can unilaterally enforce his stated desires without Congress’ complicity.

    • #25
    • August 16, 2011, at 2:33 AM PST
    • Like
  26. Look Away Inactive

    My fellow Ricocheteer Liberal Jim Says: Mr. Buffett is both friendly with establishment Republicans and liberals. After all it was Bush who facilitated his profit on GS.

    Liberal Jim, I just finished NY Times Business Writer Gretchen Morgenson’s book “Reckless Endangerment” makes very interesting reading of who really enabled those payments to GS. Hint: it started in 1994.

    Best to you my friend!

    • #26
    • August 16, 2011, at 3:31 AM PST
    • Like
  27. Bereket Kelile Member
    Diane Ellis, Ed.: The one fair point that Buffett does make is that the mega rich are subject to a much lower tax rate on their income than a family making $300,000/year in salary is because the mega rich make the bulk of their money with financial instruments, which is only subject to the capital gains tax. The top marginal rate on long term capital gains is only 15% (20% when Bush tax cuts sunset), compared to the much steeper top income tax bracket of 35%. · Aug 15 at 1:42pm

    I often hear people say that CEOs pay less in taxes than their secretaries but the average salary of a CEO is $500K or $600K, ball park. That puts them in the highest bracket, which means they’re paying more, about 50%. I wonder now how many of the people who earn much of their income through capital investments are in the top brackets because if most of them are then it really isn’t unfair. That is to say, just because the wealthy make most of their money in passive income does not mean that they have very low salaries.

    • #27
    • August 16, 2011, at 3:32 AM PST
    • Like
  28. Bereket Kelile Member

    I did a little cursory research and back-of-the-napkin calculations to find that about 237,000 people (or households) earned more than $1 million and 4,000 of those didn’t pay any federal income tax at all.

    • #28
    • August 16, 2011, at 3:49 AM PST
    • Like
  29. Mr. Dart Inactive
    bereket kelile: I did a little cursory research and back-of-the-napkin calculations to find that about 237,000 people (or households) earned more than $1 million and 4,000 of those didn’t pay any federal income tax at all. · Aug 15 at 3:49pm

    Likely those 4,000 earn all of their investment income from tax-free municipal bonds. Perfectly legal and so boring they probably sleep an uninterrupted 8 hours every night.

    • #29
    • August 16, 2011, at 4:14 AM PST
    • Like
  30. Todd Inactive
    Why not handle this the other way: reform the tax system so that everyone pays today’s long-term capital gains tax rate on income however derived?

    Buffett and the dreaded hedge fund managers earning a capital gain have earned money, paid tax, then invested the remainder in an asset, holding it for at least one year prior to realizing the gain.

    I was referring to “carried interest”, which is more of a success fee, but more some reason is still taxed as if the hedge fund managers’ own money was at at stake.

    But I agree, the solution is, everyone pays one low rate on everything.

    • #30
    • August 16, 2011, at 4:36 AM PST
    • Like