Wednesday, August 17, 2011

On Buffett

A few months ago, when the US Congress was in the middle of a debate about tax breaks, Republicans had to face shame because of a widespread misrepresentation of their position. They were asking for continuing an across-the-board tax break, while Democrats were asking to continue the breaks for everyone but rich Americans. Many commentators critical of the Republican position framed it as "They want tax breaks for the rich!" which was not fully accurate.

Republicans and fiscal conservatives now seem to be using the same trick on Warren Buffett. The latter recently wrote a piece in the New York Times wherein he advocated:

(a) Straightening out the tax code that allows the rich to pay taxes on a smaller proportion of their incomes than their wage-earning fellow citizens
(b) Increase the tax rate on the rich

Note that an increase in tax rate is only part of the proposal. Yet, fiscal conservatives have continuously been bashing Buffett for his "damaging" advice. Even when tax reform has been on nearly everyone's agenda for a long time, conservatives included!

The small-government lobby that this writer belongs to has gotten the reputation of being the pro-rich lobby, and it is unfortunately true for at least some of my brethren, as these reactions to Buffett show.

It then has to be put on record that I do not support either selective tax breaks or selective tax increases. Consequently, I do agree with with Buffett about getting rid of tax subsidies for the rich and super-rich, but not with the argument that the rich should pay at a higher rate.  A government of the people has no reasonable justification to subsidize or penalize the activities of some people - whether it be the rich through tax breaks/increases or the middle class through the mortgage tax deduction.

If you are richer than me, you should certainly pay more money in taxes, but you should not be paying a bigger (or smaller) proportion of your income than I do. A flat tax is the only fair tax.

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