Tag Archives: Warren Buffett

A proposal to satisfy Warren Buffett and raise his taxes

I’m tired of hearing Warren Buffett complain about not paying enough in taxes.

I propose a 10% property tax on all Americans with personal wealth in excess of $40 billion. This should bring the government about $10.5 billion in new revenue; $4.4 billion from Warren Buffett and $6.1 billion from Bill Gates.

What say you Mr. Buffett? Willing to put your money where your mouth is?

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Warren Buffett is wrong because he doesn’t understand economics. Support the Fair Tax.

Warren Buffett recently remarked:

The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.

Technically, what Mr. Buffett said may be true but only because he is looking at the wrong thing. I’m sorry that this supposed capitalist and businessman has never learned that spending money is not what creates wealth. To create wealth, one must save, invest, and produce items that had not existed before or items that do exist but of higher quality or at a lower cost.

Instead of encouraging spending, as the current and past Presidents have done, we should be encouraging investment. That means lower taxes on investments (capital gain, interest, and dividends) and, to offset that loss of revenue, either lower government spending (my preference) or higher taxes on spending. Until 1913, with a few rare exceptions (Civil War), all federal taxes were collected on spending while income, both earned and from investments, were non-taxable. During that time, the United States economy grew like nothing the world had ever seen before. Since the income tax has replaced tariffs as the primary source of government revenue, the United States has saved and invested less money and the economy has grown more slowly.

Mr. Buffett argues that we’ve tried trickle-down economics and it has failed. We have also tried trickle-up economics (in the late 1960s) and it too failed. Let’s try something that has succeeded: consumption taxes instead of income taxes.

Making Charity a Crime

Capitalists argue that government spending on welfare, food stamps, housing subsidies, etc. crowds out charities. If government is providing the poor with everything they need, then what is there for charities to do?

Now, the socialists have turned that argument on its head:

SPIEGEL: Forty super wealthy Americans have just announced that they would donate half of their assets, at the very latest after their deaths. As a person who often likes to say that rich people should be asked to contribute more to society, what were your first thoughts?

Krämer: I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.

You got that? Giving money to charity is unacceptable because it is taking the place of the state. But wait, there’s more:

SPIEGEL: But doesn’t the money that is donated serve the common good?

Krämer: It is all just a bad transfer of power from the state to billionaires. So it’s not the state that determines what is good for the people, but rather the rich want to decide. That’s a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow?

Understand? Only the government is able to determine what is good for the people and people have no legitimacy to give their own hard-earned money to charity as they see fit.

Next thing you know, acts of charity will be a crime against society.