Ok, when one of the richest men in the world talks, I am willing to listen. After all, he must know something about financial matters to become richer than King Croesus of Lydia ever hoped to be.
Mr. Buffett is Chairman of Berkshire Hathaway, one of the most successful investment holding companies the world has ever known. He was an avid supporter of then-presidential candidate Senator Obama and has spoken out candidly about the need for higher taxes on individuals and
Here is my problem when wealthy individuals call for ‘higher taxes’ on anyone anytime anywhere. They can afford it! Increasing income taxes on an individual such as Mr. Buffett by even a measly $1 million per year, while a huge amount to most Americans, is relative peanuts to a person of such enormous wealth as Mr. Buffett.
He probably can let that much fall out of his pocket in change during the year, get lost under the sofa cushions in his house and not notice any difference.
Here’s what honesty demands of anyone who talks in specious terms about the need to “raise taxes” to cover our current federal over-spending pattern: Tell us specifically which taxes you want to raise, how much and on which people.
Spouting off about “raising taxes on the wealthy” is the easy way out. To make a real difference, why don’t you hear people such as Mr. Buffett say we need to raise taxes by, let’s say, $1000 on every one of the 50 million people who do not currently pay income taxes? Because they don’t want to inflict additional pain on already-strapped households and they know that such a proposal would mean immediate defeat for the incumbent party in the next biennial election…by a landslide.
And unless any politician or financial expert such as Mr. Buffett can enunciate such specific increases very clearly, they have absolutely no credibility when talking about reducing the budget deficits by raising the aged battle cry of ‘higher taxes’.
I am sure he is a very nice man and he has the respect of many people in the business world. But he fails to account for the fact that wealthy individuals already have 2 avenues to pay higher taxes today voluntarily if they want to right now. They do not need any additional legislation
passed to do either:
1. They can decline to accept any tax refund issued to them during the year or just tear up the check and not deposit it into their account.
2. There is an obscure program at the U.S. Treasury whereby any individual can send them a check marked “National Debt Reduction”, over and above their annual federal tax payments, and it will go directly to retire some part of the burgeoning national debt now over $11 trillion and still soaring in an upward trajectory.
There is one other flaw in the argument that the wealthy can and should pay more of their income and wealth in federal tax payments in some form or another to Washington: There are not enough of them to make a decisive difference in the war on national debt!
Suppose 3 super-wealthy gentleman such as Warren Buffett, Bill Gates and Alex Rodriquez of the Yankees, all whom could ‘afford to do it’, wrote checks for $1 billion apiece to pay down the federal debt today. As noble of an effort as that would appear to be on the surface, would that make any difference?
Not really…we are currently overspending revenues in the federal budget to the tune of $3.79 billion…per day! That is the proverbial “spitting into the wind”, to clean up the analogy a little bit. They would not even cover the amount of debt we are adding over and above what we are spending in one day, today, May 10, 2009!
We could empty the pockets of all the billionaires in America today (there are 449 of them) in a similar manner and it would not make a significant difference in the accumulation of federal debt at the staggering rate we are building it nowadays. It won’t either until we stop spending so much money at such high rates of federal expenditures to cover everything from the banks to Wall Street to health care for everyone to saving the snail-darter or the spotted owl from extinction.
So if you are really concerned about the future debt picture of the federal government, you will contact your elected leaders in DC and implore them to: 1) stop spending so much money; 2) stop borrowing so much money; 3) stop wasting so much time talking about raising or lowering taxes and 4) focus on reducing the rate of increase in federal spending across the board.
In about 5 years, we will see a huge difference in our budget outlook if you will do this. Today.