As a financial journalist, and as a frequent commentator on issues of political economy, I’m constantly reading opinions of those that I disagree with on myriad issues. And over the past couple of years, there is one prominent player in the investment arena, and now in the arena of political economy, who has been given a huge megaphone with which to spout his views, views which, quite frankly, I’m sick of. His name is Warren Buffett, and he’s become a hero to those who want to punish success in the name of the federal leviathan.
The so-called “Oracle of Omaha” is considered one of the greatest investors ever and, based on both his personal success and the success of his flagship firm Berkshire Hathaway (NYSE: BRK-B), I think it only fair to acknowledge Mr. Buffett’s sagacity when it comes to business and investment. Yet over the past couple of years, Buffett has permitted himself to become what Soviet leader Vladimir Lenin once called Communist sympathizers in America, and that is a “useful idiot” of the left.
The issue at hand is Mr. Buffett’s support of higher taxes on the wealthy, a goal that President Obama wrapped up in a convenient package called the “Buffett Rule.” Now, Buffett is at it again, having penned an op-ed for The New York Times titled “A Minimum Tax for the Wealthy.”
In his piece, Buffett argues that Congress must move to compromise on spending cuts and tax increases to avoid the consequences of the so-called “fiscal cliff,” an outcome that would strip an estimated $600 billion from 2013 U.S. gross domestic product (GDP) and potentially send the economy back into recession. Now, I am not one of those who thinks that automatic spending cuts would be bad at all. In fact, we need a lot more spending cuts to get our fiscal house in order. I do, however, think higher taxes on anybody is bad for the economy, and bad for society — but that’s not how Buffett sees it.
The “Oracle of Obama,” as I refer to him, thinks that rich people like himself should feel a duty to society to pay more taxes. And though he doesn’t use this language, I’ll state what’s behind Mr. Buffett’s philosophy, and that is he thinks the rich should give up more of their money to the collective in the name of the public good.
What is worse yet is that Buffett essentially has the temerity to mock the idea that investors would pull back on investments if there were capital gains tax increases. In his op-ed, Buffett said he’s never seen that happen even when capital gains taxes topped 25% early in his investing career. Here’s the money quote from The New York Times piece:
“Let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased…The ultrarich, including me, will forever pursue investment opportunities.”
Of course, this view is true, but that’s because the wealthy have no choice in the matter. The point here is not that people won’t try to maximize their investments if taxes are higher but that higher taxes on the most successful among us have no effect other than to take money out of the productive private sector and redistribute it into the hands of a wasteful government that will only consume wealth for its own big-spending schemes.
At the heart of this issue is whether the government can spend money better than private citizens, and whether the government can claim the right to more of what a successful “rich” person owns than it can of someone who is less successful. The implications here are ugly, because if Buffett gets his way, it will only lead to a bigger confiscatory penalty on a minority group of individuals simple because they are successful. Whether they can “afford” to pay more is not the principle at work here. The principle is punishment of success because the government “needs” more money to keep paying for a bloated welfare state, all in the name of the public good.
I hate to think that Mr. Buffett isn’t smart enough to realize this, but based on his support of a bigger tax burden on the wealthy, I am impelled to come to this sad conclusion –and this is why I am truly sick of Warren Buffett and useful idiots like him.
Follow Jim on Twitter: @Woodsish.