Politics, Economics, and the Law
Warren Buffet, Millionaires, and Taxes
January 19, 2012Posted by on
As Russel B. Long said, “Don’t tax him. Don’t tax me. Tax that man behind the tree.”
Warren Buffett has stated that he thinks the rich should be paying more, and predictably other millionaires agree with this, provided they aren’t actually required to pay. I don’t have millions of dollars, but if I did I’d be right there with them, telling Mr. Buffett that he can write as big a check as he wants to the U.S. Treasury if that’ll make him feel all warm and fuzzy inside. However I believe that, considering what the government does with our money, there are better uses for it, such as lighting it on fire. One might even bypass the bureaucracy and use that saved cash for some legitimate charity. It’s not that the government isn’t in a financial pickle, it’s just that pretty much anything I could dream up to do with my dollars is a better use of them than what the federal government will be doing. There. That addresses some, though hardly all, of the philosophical concerns.
On to more practical matters. At this point, proposing to raise one group’s tax rate and/or lower another’s is nothing more than cynically trying to garner votes and support. In 2011, 53.2% of federal income was derived from borrowing [source]. 33.7% is from personal income tax, and 7.2% from corporate taxes. In the coming year it is expected that the federal government will add over a trillion dollars to the debt, due primarily to their enduring hard-on for entitlements and wars. The GDP of the United states is about $15 trillion. Attempting to extract an extra trillion dollars in taxes won’t help us out of the current recession/depression, instead simply further stagnating the economy. And if you did somehow manage that, that only gets us closer to breaking even for this year. It doesn’t even begin to address paying off the debt, which now exceeds 100% GDP.
And that is why I’m unimpressed by all this tax talk. We’re so far in the hole that an extra 10% taxes on anyone or everyone will make no real difference, and they’re going to spend it on things we don’t need or want anyway.