Feeds:
Posts
Comments

Posts Tagged ‘warren buffett’

I’ve been finding more and more things about which to disagree with Penn Jillette, as I’ve been learning and making up my mind about libertarianism. He’s still a great guy, and a fantastic performer, and I have not a shred of doubt that his politics are consistently driven by compassion and humility, even when I think he has the wrong idea.

But I know just about enough now to have some kind of opinion about this recent Penn Point:

 

 

If a billionaire like Warren Buffett thinks he’s not being taxed enough, why doesn’t he give the government some cash? He clearly wants the government to have more of his money, and there are ways he can just make a donation. That should make him happy and feel like he’s doing good, right?

Penn knows why Warren Buffett doesn’t do this, obviously. Buffett’s smart enough to give a lot of his money to, for instance, Bill Gates, who might do something with it such as vaccinate children, rather than to the US government, who are more likely to use it to start another war. So why does Buffett talk like he wants the government to have more money?

This is where I think Penn’s missing the point. It’s not that Buffett wants the government to grow bigger and richer and stronger, and have more money in an absolute sense. But if it’s going to insist that it needs to raise funds to pay for all its shiny wars and such like, then someone like Buffett is best placed to take the hit.

If he knew that a donation from him would directly reduce the tax burden faced by all his countrymen in households earning below $20,000 a year, I think he might consider it. But that’s not how the government operates, so instead he’s acknowledging that the mega-rich are in a better position to take on an increased burden than the millions living below the poverty line. To the extent that taxes have to be collected, Warren Buffett is advocating shifting the balance so that slightly more of the burden rests with billionaires than is currently the case.

Of course, whether the government really needs to be collecting as much money through taxes as it plans to is another matter. Any possible savings on favoured governmental extravagances, like extended military actions and imprisoning people for victimless crimes, should be fully explored before we start deciding that money needs to be collected at all. I don’t know if Warren Buffett’s brought this up much, and maybe it’s something he should be putting more emphasis on.

But I don’t think it’s fair to conclude from his remarks that he’s a devout statist, or that he’s a hypocrite for not writing President Obama a cheque. “Let’s give the government more money” might be a deeply problematic rallying cry from any angle, but at least he understands the relative privilege of his position, and recognises the hardships of others, more than many of his class seem capable of.

Read Full Post »

And while we’re talking about taxes and whatnot, there’s an excellent post at Skeptic Money that looks at the popular claim that half of Americans “don’t pay taxes”.

That’s how Rick Warren put it in a tweet recently, expressing his annoyance that so many of his countryfolk have so little income that the law currently doesn’t consider it justified to claim any tax from them whatsoever. It’s the poor who should contribute more.

Of course, this is complete bullshit.

Significantly less bullshit is the original claim, before it got mangled and distorted into an ideology that someone found more comfortable: nearly half of American households pay no income tax.

That’s an approximation of the Tax Policy Center’s findings a couple of years ago, and although it’s a very different thing from what Rick Warren said, it still sounds rather shocking at first. It seems to imply that a lot of people are getting away with making no significant financial contribution to the welfare of the country as a whole, which seems a bit much, given that many of these people are surely making a liveable wage.

But that only seems like a problem until you consider the other kinds of tax people pay, beyond the federal income tax.

America’s got a lot of different kinds of taxes.

Sales tax means that buying goods – your average day-to-day stuff – often requires you to throw money the government’s way. Gasoline tax means you’re getting taxed by the government every time you fill up your car. Property tax hits homeowners and renters alike. And even people who don’t pay federal income tax get lumped with something called a FICA tax, which pays for things like Social Security.

Skeptic Money uses a hypothetical example and some estimated numbers, to show just how wrong it is to describe the poorest half of Americans as paying “no tax”, and how misleading it is to declare that they pay “no income tax” without providing any context. When all the above deductions are considered, as the blog post describes: “So… no income tax; just 30% of their income paid in taxes.”

This is what billionaire Warren Buffett is talking about when he says that his last tax bill, as a percentage of his taxable income, was lower than that of anyone else working in his office.

Read Full Post »

%d bloggers like this: