By Frank Hill
Warren Buffett caused a stir recently with his editorial comments in the New York Times on Monday where he asked Congress to ‘stop coddling superbillionaires’ like him.
It is a little hard to take on a superbillionaire such as Mr. Buffett since in America, and throughout history, it is presumed by many that the ‘richest’ citizens are somehow the ‘smartest’ people in the country.
Especially when it is someone such as Warren Buffett who has allowed even normal, moderate wage-earning investors the chance to ride his expertise in buying companies over the years. We had an investment advisor recommend putting money into Mr. Buffett’s Berkshire Hathaway stock way back when it was ‘only’ in the high 4 digits.
We thought our advisor was certifiably loony.
Last we saw his Berkshire Hathaway stock was in the low 6 figures. So God Bless America and Warren Buffett!
Still, we have to take issue with his comments about higher taxes for the wealthy because they seem a bit supercilious to us and off the mark when it comes to the root causes of our deficit/debt issues from Hades.
So here are some honest questions for Mr. Buffett and any other person who just ‘insists’ that higher taxes are the answer to our fiscal problems:
1). If Mr. Buffett doesn't mind paying more taxes, then why does he continue to hire top- flight tax accountants and lawyers to shelter ANY of his money...ever? Why not just fire them all and pay the marginal and effective tax rates as written into current law for a man in his super-ultra high income category? (Just fire them for your own personal tax planning please, not for Berkshire Hathaway common stock holders who have benefited from such great similar tax advice over the years.)
2) Mr. Buffett can pay any effective tax rate at any time he wants to...14%; 25 %; 38.5%. He can pay 100% effective tax rates today and pay $100 million more in taxes each year if he wants to just by stroking a check to the US government. Why don’t you do just that starting tomorrow morning, Mr. Buffett?
3) Instead of setting up a charitable trust with Bill Gates to manage his wealth of $35 some-odd billion going forward post-mortem, why didn't he just write 'The US Federal Guvmint' into his will? That way, he could give those great decision-makers in all the bureaucracies his money to spend the way 'they think would be a good way to spend it all' and not him or his heirs? ($35 billion would last about 36 hours before it would all be spent to pay for the current amped-up operations of the US government)
4) Better yet, why not bring President Obama and Congress into the Buffett boardroom and ask Mr. Buffett what he should do with his money and how much he should pay in taxes each year? He seems to imply that every single program now in operation is spending our taxpayer’s money in precisely the most optimal and efficient manner possible. Obviously, (to him at least), the government knows better than he does how his tax money should be spent.
So just let the federal government make the decisions from the very beginning, not after he has made a profit from making a risky investment.
5) Finally, there is this somewhat obscure and seldom-used line-item in the current US federal budget where any taxpayer, including you, the reader if you are so inclined, can send a check to the US Treasury and make a 'gift' to help pay down the $14.7 trillion national debt.
Seriously. Go to this website, Bureau of Federal Debt and see how you can make a gift donation to help pay down the federal debt of $14.7 trillion and counting.
If you make the average donation of $500, it will only take you and 29.4 billion other people making the same 'donation' to pay off this huge Visa credit card debt we now have.
There are only 7 billion people on Planet Earth right now, of which only 125 million are US federal taxpayers.
And here is the real kicker to the teeth of any well-meaning soul who does contribute to this fund:
It doesn't actually go towards 'reducing existing debt'. It goes towards 'reducing the amount of debt that might have otherwise been borrowed' which in effect means all of these donations have been 'spitting into the wind' over these past two decades.
So you can thank Mr. Buffett for bringing this important issue to light. If we thought every single penny of the federal budget was being spent to help someone in desperate need in order to feed themselves and stay alive, we might be inclined to consider additional taxes.
If we thought every single penny of the US defense budget was being spent optimally to keep us safe from the terrorists such as Osama Bin Laden's henchmen instead of puffing up some employment figures on an obsolete weapons system in a powerful defense committee chairman's home district or state, you might be able to convince us to pay more in taxes to defend our nation against all threats as it says in the US Constitution.
But unfortunately, we have read every single page of the US Budget, (so you don't have to plow through its 2400+ pages of almost indecipherable writing) and we know both of these hypothetical situations above are not true.
We suggest maybe Mr. Buffett could be persuaded to sit on the Super Commission and help them plow through the books like he must do whenever he buys a huge stake in a company such as Coca-Cola, The Washington Post or Goldman-Sachs.
Maybe he could help them cut spending before offering to pay higher taxes. That is where we need his financial and budgeting expertise right now...on the spending side, not the tax revenue side of things.
He would be appalled at what he saw in the current spending stream of the federal government. You would too if you read it all stem to stern.
(Editor's Note: Frank Hill's resumé includes working as chief of staff for Senator Elizabeth Dole and Congressman Alex McMillan, serving on the House Budget Committee and serving on the Commission on Entitlement and Tax Reform. He takes on politics from a fiercely independent perspective at the blog Telemachus).
By Frank Hill