This is funny. The man’s such a hypocrite on the subject. Don’t get me started on how we’re beggaring our kids and grandkids so he can get “free Lipitor and Viagra.” (I don’t really know the meds Mr. Buffett takes. My point: Social Security and Medicare are huge transfers of wealth from tomorrow’s workers to today’s elderly – some of whom need the assistance, while others don’t.)
h/t James Freeman from WSJ.com’s Political Diary
Will Buffett Avoid the Buffett Rule?
Billionaire Berkshire Hathaway CEO Warren Buffett is once again thrilling the political class by volunteering other people to pay higher taxes. Long-time observers recall his opposition to former President George W. Bush’s efforts to reduce the tax rate on dividends. Since Berkshire pays no dividends, Mr. Buffett had little at stake but enjoyed the opportunity to pose as if he were a rich guy eager to cough up more dough to Washington.
In the current debate, President Obama is pushing the “Buffett Rule” to ensure that high-income earners pay higher tax rates. But even if it’s enacted, don’t expect the Buffett Rule to have much impact on Mr. Buffett. By an amazing coincidence, the sage of Omaha is already positioned to shield most of his rising wealth from such a tax.
Political journalists who don’t read the business press are the most likely to be duped by Mr. Buffett’s pose as a public-spirited billionaire happy to pay more to support the government. He frequently suggests that tax hikes will have little impact on investment activity. In a New York Times op-ed last August, Mr. Buffett said, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off.”
But he seems to have concluded that a potential tax bill might have scared off some owners of the Burlington Northern Santa Fe railroad when Berkshire was negotiating to buy it. According to a January 2010 Barron’s story, Mr. Buffett “said that, while he’s not enthusiastic about issuing more shares, the deal is too large to be all-cash and that he wants to give Burlington shareholders a tax-free option.”
In another case, it’s not clear if Mr. Buffett was scared but he certainly appears to have been angry when Kraft Foods, partly owned by Berkshire, didn’t pay as little in taxes as he wanted them to. In another Barron’s story from May of 2010, the magazine reported that Mr. Buffett “groused about a tax bill of roughly $1 billion that Kraft incurred by selling its pizza business to Nestlé, the world’s largest food concern, for $3.7 billion, to raise additional funds. ‘Dumb’ was Buffett’s word of choice.”
This brings us to the Buffett Rule, which at its heart is a way to raise taxes on dividends and capital gains. Berkshire still doesn’t pay a dividend, and as for capital gains taxes, well, Mr. Buffett has already made clear that he’ll largely avoid them by transferring his fortune to the Gates Foundation and to charitable trusts controlled by his family. In fact, at the 2010 Berkshire annual shareholders meeting, according to Dow Jones Newswires, Mr. Buffett urged attendees to “follow my tax dodging example” and give away their wealth. Democrats in Washington may enjoy using Mr. Buffett as cover to raise taxes, just as long as they understand that he won’t necessarily be paying them.