Mega-billionaire Warren Buffett writes in the New York Times that the government should lower his income by raising taxes on the wealthy, noting that he paid less taxes, as a share of income, than anyone else in his office.
Now, it seems that Buffett doesn’t fully understand why it is that he pays relatively little in income taxes. As David Indiviglio explains, there is more to the story of taxes on investment income than Buffett appreciates. Also, as others have pointed out a number of times in response to Buffett’s pleas to increase his taxes, anyone can simply write a check to the Treasury if they want.
But if Buffett really wants to send more revenue to the government, he should realize that increasing tax rates on income and capital gains is a terribly inefficient and unfair way to reach that goal.
A far better way would be to end the countless tax preferences, bailouts, and subsidies that have made Buffett and his company super-wealthy.
Buffett has made untold millions and billions investing in banks and other financial institutions, such as Goldman Sachs and Wells Fargo, that benefited from massive bailouts. That represents a giveaway from taxpayers to Buffett.
His firm, Berkshire Hathaway, owns all or parts of an endless list of companies that profit from government regulations, bailouts, and tax breaks, including General Electric, Moody’s, Bank of America, and many others.
Not all of the policies that favor companies he owns and ultimately enrich Buffett are unjustifiable. But tax reform that eliminated the many credits, deductions, and prefences littering the code while lowering rates would lead to greater efficiency, higher growth, and higher tax revenue. It would also solve Buffett’s problem — he’d pay more taxes (in absolute terms) to the Treasury.