A Further Perspective

Warren Buffett’s Empty Words

They ring especially hollow at tax preparation time.

By 3.22.12

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It's the time of year when our tax preparers tell us how much we owe the government. Here's what might be a revelation to any high-income liberal who thinks his or her tax rate is too low -- the amount of taxes your CPA tells you that you owe is a minimum not a maximum.

Warren Buffett is President Obama's favorite tax policy spokesman. It's not, however, because of Mr. Buffet's actions. It's only because of his words. Like a broken record, the President has used Buffett's words time and again as his primary argument for raising taxes on "millionaires and billionaires" and on "the most fortunate among us." Obama claims, "That's not class warfare, that's just common sense." In a recent fund raising letter the President asked, "Do you think it is fair that Warren Buffett's secretary pays a higher tax rate than Warren Buffett? I don't and neither does Mr. Buffett."

In an interview with Christiane Amanpour Buffett said, "I think people at the high end, people like myself, should be paying a lot more in taxes. We have it better than we've ever had it." In testimony before Congress Mr. Buffett said, "The rich are coddled by Congress as if they were spotted owls or some other endangered species."

Buffett's specific indictment of the tax system is that he, a billionaire with an annual income in the millions, pays a lower tax rate (about 17 percent) than the 20 people in his office who pay, according to Buffett, an average rate of 36 percent. (The 36 percent number makes me wonder about his credibility.)

Buffett apparently has not the slightest clue as to how much of a phony he's proving himself to be and the chasm between his words and deeds. In regard to Buffett's famous protestations, New Jersey governor Chris Christie recently made the following recommendation:

He should just write a check and just shut up. Really. And just contribute. I'm tired of hearing about it. If he wants to give the government more money, he's got the ability to write a check. Go ahead and write it.

Governor Christie, of course, has it exactly right.

President Obama claims that he is not against wealth, per se. He says, however, "After some point, you've got enough." Presumably he thinks Buffett is well beyond that point. Consequently, if Buffett paid two or three times the tax he's now paying, it would be with money he doesn't really "need." If Obama's right, Buffett wouldn't feel a thing.

If you think you're not paying sufficient taxes, there's something you can easily do about it. This is a problem that readily lends itself to individual direct action. Beyond the legal minimum we're free to determine our own tax brackets. If anyone actually believed that the government's having more money would benefit society then he might happily pay more taxes.

Have you ever heard of anyone who protests that his tax rate is too low volunteering to pay more? Why not? Is there any clearer example of hypocrisy?

Actions speak louder than words. Judging from their actions, liberals have the same opinion as everyone else -- government is the least effective way to get anything done. Even liberals recognize that they as individuals can spend or invest their own money or contribute it to private charities with vastly better results than sending it to Washington, D.C. Have you ever read an obituary that ended with, "In lieu of flowers, please send a contribution to the federal government?"

One easy way to raise your own taxes is by opting out of some of your deductions. How often does that happen?

It would be interesting to know what Warren Buffet would say to the question of why he doesn't just voluntarily pay more taxes?

Mr. Buffett, why do you want other people to be forced to do something you are unwilling to do voluntarily? Talk is cheap. Put your money where your mouth is. Buffett is apparently unaware that he is making it crystal clear he is a complete phony. If he voluntarily paid more taxes he could quickly go from being a phony to being an inspiration. Show some leadership. Go from having no credibility to having tons of it. Why is it necessary to wait until your fellow millionaires and billionaires are forced to join you?

Buffet could argue that one taxpayer can't make that much difference. Whether or not that's true, however, isn't contingent on what other taxpayers are doing. As Milton Friedman wrote in Free to Choose, "This contention that compulsion would change matters is wrong -- even if everyone else did the same, his specific contribution… would still be a drop in the ocean. His individual contribution would still be just as large if he were the only contributor as if he were one of many."

Of course, for liberals compulsion is a good thing. It's been said that a liberal doesn't care what you do so long as it's compulsory.

In some instances liberals do believe in the effectiveness of individual, voluntary action. I've had conversations with Prius owners who admit that whether or not they drive a hybrid will make not the slightest difference in regard to climate change. They will say things such as, "Well, we can't just do nothing," or, "We have to start somewhere." They say it's important to set an example. Of course, the Prius's distinctive shape assures that everyone will recognize that they're setting an example and helps spread the guilt contagion.

Conservatives have no reason to feel conflicted about paying the absolute minimum tax required. Conservatives think almost everyone's taxes are too high including millionaires' and billionaires'. There's no conflict between their policy views and their personal behavior. They have no reason to feel guilty. They think the government already gets too much of our money and does more harm than good with what it already has. On April 15, when I send my checks to the IRS and the California Franchise Tax Board, you can bet I will be sending the legal minimums. And my conscience will be clear.

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