Wednesday, August 3, 2011

Rants and Warren Buffett and Taxes

by Libby Sternberg

So, yesterday I chose to focus on how media bias manifests itself. Turns out Jonah Goldberg was writing about the same thing, focusing on one particular story -- the fact that so many pundits, commentators, and even politicians have resorted to extreme rhetoric in the debt ceiling debate, labeling Republicans and conservatives everything from terrorists to hostage takers to...whatever.

Mr. Goldberg's particular beef was that during the interviews about Gabby Giffords's return to the House for the debt ceiling vote (And wasn't that a wonderful story after all the squabbling? I thought so!), no journalist bothered to ask "what do you think of those who use words like 'terrorist' to describe Republicans in this debate?"

I understand Mr. Goldberg's anger. So often, the right is scolded about civility while the left gets to paint as many Hitler mustaches as they want (both rhetorically and really) on conservatives without a peep from the press. I'm not so keen on Mr. Goldberg's headline or conclusion. After having been told to "go to hell" on FB the other day for voicing a conservative opinion, I'm not willing to endorse that language.

For those who want to judge for themselves, here's Goldberg's rant.

On to...taxes.

The other day I posited that it's all well and good to talk about getting the wealthy to pay their fair share (what is a "fair share" anyway? Who determines "fair"?), but as long as you have a complicated tax system with deductions and credits and the like, the wealthy will use their money to hire accountants and lawyers, who will then figure out ways to shelter the dough from Uncle Sam.

Such is the case with Warren Buffett who, as I pointed out, complains that he is in a lower tax bracket than his secretary. (Again, I wonder: if this upsets him, he should just write a check to the IRS for what he considers his "fair share" and fire the danged accountants and lawyers).

The problem with Mr. Buffett's complaint is that it leads to talk of raising taxes that might end up capturing revenue from people who deserve to keep their money as they strive to build businesses (there goes the "fair share" argument). In other words, raising tax rates is likely to catch a lot of little fish in that net, fish that are striving to become big fish.

Okay, let's drop the fish metaphor; it's not working for me.

Let's put it this way: there are lots of "strivers" trying to make it big, starting businesses, hiring people, questing after that elusive American Dream. Warren Buffett has achieved it. Raising taxes, however, might make it more difficult for some of those strivers to reach his achievement point.

So today I open the Wall Street Journal to find a really interesting discussion of this issue -- how to capture Warren Buffett's wealth in taxes. No, it wasn't an op/ed or editorial. This discussion was in the letters to the editor page where numerous folks were chiming in to say how you can't capture his wealth in taxes because of it being sheltered, and even when he dies, apparently it goes to charity (a choice he might deny others if some tax policies were enacted).

One letter-writer, however, proposed something that caught my eye and got me to thinking. This fellow, Winston Emmons from Needham, MA, suggested that the federal tax code is wrong because it "focuses on income instead of wealth. If you are rich, it's because of what you have, not because of what you make."

Mr. Emmons goes on to point out that a "true tax on the rich would not take more from aspiring people...It would impose a separate tax only on people who already have a fortune--that is, a tax on high net worth."

And then he proposes eliminating a lot of other taxes that complicate the code without adequately capturing revenue.

I thought it was an intriguing idea. I also like flat tax ideas that treat everyone equally and turn a nonjudgmental eye on whether you "deserve" to keep your own money. And I've found a national sales tax idea interesting as well -- although my sister-in-law points out it can lead to black market problems as people try to avoid it.

As I said in an earlier post, I'm not against the idea of raising taxes at some point if it's a fair plan and we continue to cut spending, so that future generations aren't burdened with the results of our profligacy.

1 comment:

  1. A national sales tax would also be, by its very nature, a regressive tax, since poorer people spend a higher percentage of their disposable income on basic consumer items than do the rich.