Warren Buffett thinks billionaires like himself aren’t paying their “fair share” in taxes. He famously stated that he pays a lower marginal rate than his secretary. If Buffett believes the problems facing us are the result of his paying too little taxes, who am I to argue?
So Buffett calls for higher income and capital gains tax rates.
Omaha, we have a problem.
It’s often (albeit incorrectly) said that money is the root of all evil. But Buffett’s (read Obama’s) tax plan does not redress the glaring injustice created by huge disparities of wealth.
Obama and Buffett apparently think income inequality is a problem; I disagree. But even if it is, it’s a problem without a solution. Redistribution does not eliminate income disparities between classes; it just creates different ones, destroying wealth in the process. (If you hate our country, that’s called a two-fer.) Income differences exist in every economic system. If you think they don’t exist under Communism, I’ll gladly buy you a one-way ticket to the Worker’s Paradise of your choice.
Since Buffett pays himself only a modest salary relative to his immense wealth, his preferred tax hikes would still leave him with a lower marginal tax rate than his secretary, which I thought was the impetus for his crocodile tears. However, the new rates would ensure that the 50% or so of us who do pay federal income taxes will incur a much bigger tax burden within a few years.
The Federal Reserve’s rapid expansion of the money supply in recent years makes steep inflation inevitable once that money circulates in the economy. As Thomas Sowell explains, inflation is a hidden tax that rich and poor alike pay. Our salaries will lag behind price increases, but they will rise eventually out of sheer necessity. And everybody will pay the vast array of taxes Obama seeks for “multi-millionaires and billionaires” (i.e., people earning over $200,000 per year). If you currently make less than $200,000 and don’t give a crap about those who do, you may get there soon. When hyper-inflation hits, even minimum wage employees will find themselves earning $200,000 or more per year. And paying $50 instead of $5 for coffee at Starbucks.
This is another one of Socialism’s dirty little secrets. The higher taxes Buffett and Obama seek to impose on the rest of us do not touch wealth they’ve already accumulated. Higher tax rates do not redistribute or destroy (same thing) existing wealth, but they do make it harder for people not already wealthy to become rich.
For someone who’s earned a reputation for wealth redistribution, Obama is something of a piker, redistributionally speaking. His proposals leave a lot of un-redistributed wealth on the table, including Buffett’s estimated $40 billion net worth and Obama’s $17 million net worth.
Our Founders understood that the power to tax was the power to destroy. Progressive income tax rates are a proven method to keep others from achieving the same success that Buffett earned and Obama didn’t. Because no matter how “progressively” you skew income tax rates, the uber-rich will always find ways to pay less. And demagogues like Buffett and Obama will increase our tax burden—but not theirs—to ensure that “everybody pays their fair share.”
Incidentally, the actual Biblical injunction warns that the love of money is the root of all evil. If so, then isn’t the love of other people’s money an even greater sin? After all, the Bible clearly states: “Thou shalt not steal,” and “Thou shalt not covet thy neighbor’s goods.”
My 99% solution would remedy the obvious defects with Buffett’s plan and show those “greedy 1%ers” some tough love.
It’s ingeniously simple.
Eliminate the income tax altogether and replace it with a “reasonable” wealth tax, say 99% of any amounts over $10 million. No exceptions.
The combined wealth of the Forbes 400 List totals approximately $1.7 trillion. My proposal would immediately bring in $1.683 trillion in revenue just from the Forbes 400 list, leaving the Forbes 400 with $17 billion or an average of $42.5 million apiece. Actually, they’d get to keep around $52 million apiece, since my modest proposal would not bother collecting a cent from anyone with less than $10 million. That excludes 99% of us. Do we support the 99% or the greedy 1%?
Unlike Buffettt and Obama, I admit that my plan is as equally self-serving as theirs. And unlike them, I’ll admit upfront that my redistributionist scheme will be as big an epic failure as theirs. But since they say they’re willing to pay a little more and I’ve never said any such thing, only my plan guarantees we both receive the tax treatment we want.
Incidentally, my $10 million exemption will ensure that nearly all small businesses, which create 70 percent of the jobs in this country, aren’t affected. To paraphrase Woody Allen in Annie Hall, I’m a redistributionist, but from the right.
Unfortunately, my proposal will still leave the Obamas with a personal fortune of $10.1 ill-gotten millions. Leaving them with that much money after what they’ve put the country through is an obvious flaw, but no tax plan is perfect.
Mine is much fairer than Obama’s and Buffett’s.
And since the community-organizing Constitutional law professor (sic) keeps saying: “We live in a Democracy (sic).”
Well then, shall we put our two plans to a vote?