Warren Buffett believes that the super-rich should pay more taxes. Buffett is a great investor, but he’s a lousy judge of government. Do you think that he would ever invest in a company that was run like the federal government? If there’s one thing businessmen know, is that when money is spent, it’s their money, and there’s no easy way to get more money if they run out. They can’t steal it; they can’t force people to give it to them; it’s expensive to borrow, and they have to pay it back with interest; and they can’t raise their debt ceiling when financial times get rough. Only governments can do these things, because they pass laws and have a police force that compels us to comply. Anybody with a modicum of common sense would never invest in such a business venture unless there was going to be some type of payback.
Buffett is super-rich. He’s not going to have to pay taxes on the money he’s already made and already paid taxes on. It’s only on any new money he makes that he’ll have to shell out more in taxes. This means that the up-and-coming super rich are at a disadvantage. Calling for higher taxes on these newcomers is going to put people like Buffett, Bill Gates, and other guilt-ridden rich people at an advantage. It’s typical of the rich, whether individuals or corporations, to use the power of government to put regulatory roadblocks in front of late-to-the game competitors. For example, through lobbying efforts and political favoritism, Pan American Airways was selected by the United States government to be its “chosen instrument” for overseas operations, giving the air carrier a near monopoly on international routes. New airlines like TWA were at a decided disadvantage.
Buffett and his rich friends know all of this. They also know that paying higher taxes won’t make a dent in their existing portfolios. Buffett’s a multi-billionaire. A billion is a thousand million. He’s worth forty-thousand million dollars. That’s $40 billion dollars. Let’s say that he gets taxed ten percent on what he already owns. That would be four billion dollars. That’s a lot of money to us, but Buffett will still have $36 billion left.
A lot of people are all right with this; it’s the way it should be, they argue. It’s a bad business deal, and Buffett knows it. The federal government will just piss it away. Congress and the president will use it to buy votes. What do they care? It’s not their money. If they need more, they can tax the less than super-rich.
Buffet knows that there aren’t enough rich people in the United States to make a dent in the deficit, even if all their money was taken. The stocks they owned would go nearly to zero in value, incentive to work the following year would also fall to zero, and there wouldn’t be any more rich people to tax.
No one is stopping Warren Buffet from voluntarily giving money to the federal government. He could write a check today. He won’t, because he knows he doesn’t have to. He only needs to make the offer to look good to all the guilt-manipulators and bloodsuckers that pontificate from their lofty towers of moral superiority. He also knows that if such a tax were ever to go into effect, none of his present $40 billion would be touched.
One more thing. Please explain to me how anyone should have to pay millions of dollars in taxes, no matter how much they earn? They certainly aren’t getting millions of dollars of services in return. It’s obvious that their confiscated money will go to other people who did nothing to earn the windfall.
While most Americans would agree that stealing is wrong, they don’t seem to have a problem if some other entity steals for them. Consider this example. If John has a financial need, would it be right for him to rob his neighbors to supply that need? Most people would say no. Would it be right for John to get some of his friends to steal for him? Again, most people would say no. What if John convinces enough people to create a civil government that takes money from his neighbors to pay for things John and others need? Now the picture has changed, and I suspect that a lot of people would not call it theft because elected government officials are doing the taking.
I have a better idea for Mr. Buffett. Take the extra tax money you want to pay and set up a venture capital institute. People who have new business ideas or products that need investment capital would present their ideas to a board of experienced entrepreneurs who would evaluate the business plans. If accepted, the business would be capitalized. Existing business enterprises that needed additional capital for expansion could also participate. Four billion would go a long way.
Another Buffett-funded enterprise could be a school for entrepreneurs where students could learn how to run a business and pick up the basis in accounting, marketing, and advertising.
Buffett and other high income earners will be able to assuage their guilt for being rich, raise up a generation of new business leaders, increase employment, curtail rising economic dependency, and even expand the tax base all without raising anybody’s taxes. So Warren, don’t dump your money down a rat hole. Do something productive and lasting with it. Invest in Americans, not in the federal government.