Warren Buffett: Anti-Capitalist?

Warren Buffett has given billionaires a bad name. Although one of the richest business entrepreneurs and capitalists in the world, he has become a philosophical turncoat on capitalism. Instead, he has embraced the anti-capitalistic “Obamatization” of America.

This bizarre transformation became clear when the famous financier wrote an op-ed piece in The New York Times Aug.14.

“Stop Coddling the Super-Rich,” said the headline over Buffett’s strange op-ed article. In his piece he wrote, “[W]e mega-rich continue to get our extraordinary tax breaks.” Buffett continued, “Last year…what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office.”

“People invest to make money, and potential taxes have never scared them off,” Buffett claimed.

The National Center for Policy Analysis (NCPA), on the other hand, said in an analysis last year:

Taxing the wealthy is politically popular since it is assumed that few people will be affected. However….93 percent of businesses are taxed through the individual income tax system. These businesses employ a majority of American workers and create a majority of jobs. High marginal tax rates reduce their incomes and stifle job creation [the nation’s prime immediate goal]….[C]apital gains on assets held more than a year are taxed at a flat 15 percent for most taxpayers.

The NCPA went on to say:

Increasing the capital gains tax could lower government tax revenues, because people will hold on to assets in order to avoid tax. This lock-in effect has been noted when capital gains rates increased in the past. Moreover, the lower rate of return resulting from higher taxes may discourage people from investing in certain capital assets in the first place.

The Congressional supercommittee assigned to come up with a plan to reduce the 10-year deficit by $1.5 trillion should, according to Buffett, “raise [tax] rates immediately…including…dividends and capital gains” and raise taxes even more for those who make $10 million or more.

Buffett will hold a series of fundraisers for Obama’s reelection campaign in New York. The base price for attendance will be $10,000. “Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems,” he continued. He avoided mentioning the loss of faith in Obama. The latest (Sept 7) NBC-Wall Street Journal opinion poll showed a new low of 44 percent  approval and 51 percent disapproval for the President.

While giving his pious lecture in the Times that the “super-rich” should joyously pay more taxes because “they can afford it,” it turns out that the man who is so eager to pay more taxes to government is wrangling with the Internal Revenue Service over money the IRS claims is owed to the government.

Buffett’s own company, Berkshire Hathaway, has had plenty of opportunity to pay more taxes for years. He has been in a drawn out battle with the IRS over an overdue tax bill totaling about $1 billion, according to a story Sept. 2 on Hotair.com.

It brings to mind the biblical verse (Matthew 7:5), “You hypocrite, first cast out the plank out of your own eye; and then you will see clearly to remove the speck from you brother’s eye.” The company has been in a long dispute with IRS, according to a report from Americans for Limited Government:

We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.

What is baffling about Buffet’s current stance is that he was a capitalist from his youth. At age 11, he bought his first stock shares. In a lifetime of investing wisely, his current net worth is about $47 billion. One secret to his investing is taking advantage of sound securities when their prices are low. “When it’s raining gold, reach for a bucket,” he once said.

Buffet has never been associated with the Keynesian economics embraced by Obama and his followers. British economist Keynes’ theories influenced the government interventionist economic policies during the Great Depression, and are likely exacerbating the staggering recession now hobbling the U.S.

More than three dozen of the country’s billionaires give away half their fortunes to charity. The philanthropic effort was started in 2010 by Bill Gates and none other than Warren Buffett. This was before Buffett apparently was, in effect, kissed on the cheek by Barack Obama and they had a meeting in the White House on Aug. 22, undoubtedly to discuss the economy, according to the Americans for Limited Government website.

For the 2008 tax year, the latest available, the top 1 percent of taxpayers paid 38.02 percent of personal income taxes, according to figures from the National Taxpayers Union. When it is measured against the percentage paid by the bottom 50 percent of U.S. taxpayers—namely 2.7 percent—it seems as through the big earners are paying more than their “fair share” that Obama is always harping about.

According to the Tax Foundation, if those making more than $10 million were taxed at a 100 percent rate, it would only bring the federal government $186 billion. When we have an annual budget deficit of $1.6 trillion, it would amount to only a 12 percent reduction in the deficit.

But thanks for your generous idea, Warren.

  • davarino

    It wouldnt suprise me to find out that Buffet is actually playing this little game with Obama in order to get taxe breaks himself. This doesnt sound like a man who wants to give the governement his money willingly. I suspect this is the same game that GE played (along with many other companies), play nice and give some kind of favor (money, activism, preach to the people) and you are golden.

    Either that or he is going senile like Soros. He is so rich he has become detached from reality, because he is saying one thing and doing another. The jig is up Warren, either cough up your money or shut up.

    • b_right

      There are capitalists and there are capitalists. People like Buffet and Soros I would describe as capitalist parasites. They make substantial sums of money by large scale investments and market manipulations. Size matters. They are not the nuts and bolts of what creates wealth. They are not creators or idea makers. They don't produce products or real things. They live in a rarefied and distorted world.

  • roy

    how can you blame him for not wanting to pay his fair share, when he actually donated all of his money????

  • sedoanman

    There is no mystery as to why Buffett says the rich should be taxed more.” From the GEICO website: “In 1996, GEICO became a wholly owned subsidiary of Berkshire Hathaway, headed by Warren Buffett, one of the country's most successful investors.” http://www.geico.com/about/corporate/at-a-glance

    One way the rich have been able to avoid high death taxes is to buy life insurance. Life insurance benefits pass tax-free to the policyholder’s beneficiaries [IOW, heirs].

    GEICO sells life insurance: “Life insurance helps provide you peace of mind and can provide your family with financial stability and security when it matters most.” http://www.geico.com/getaquote/life.

    So Buffett stands to gain from high death taxes by selling more life insurance to rich people. This will increase the value of GEICO stock. Needless to say, he can avoid them by buying some himself.

    Nothing like being able to feather your own nest. Apparently, it has become more profitable for Buffett to lobby for special favors than to actually make money the old fashioned way.

    • StephenD

      Well stated and it goes toward exactly what a well heeled CEO would do to protect his assets.
      If he truly wanted to pay more taxes…he would pay more taxes! The government takes donations too. Instead, he fights them on what they say he owes legitimately. What a Hoot!

  • Jim_C

    47 billion dollars and Buffett just needs to "feather his nest," eh? LOL

    Nah, Buffett can't be right. Instead, "what's motivating him?" "He's greedy." "He's senile." You guys crack me up.

  • Jim_C

    Um, nice try with this article. "Warren Buffett is giving billionaires a bad name."

    Couldn't be that his message is verboten to would-be anti-democratic fascists, could it? Nah–he must be "anti-capitalist" all of a sudden. He must be "senile," or–probably most incongruously– "greedy." (wait, I thought that was good?)

    When you guys figure it out, let us know. In the meantime, keep on smearing and speculating! hilarious

    Here's a tip: focus on my "anti-democratic fascist" jab, since I know it gets under your skin, and then explain to me how liberals are REALLY the anti-democratic fascists because of taxes, seat belt laws and emissions regulations. I promise I'll get a kick out of it.

    • Wideband

      "He must be "senile," or–probably most incongruously– "greedy." (wait, I thought that was good?) "

      The author never claimed any of those things. Congratulations, you remain undefeated against strawmen.

      The rest of what you said just didn't make any sense.

  • Raymond in DC

    Despite all the posturing, neither Buffett nor Gates will ever pay their "fair share". Most of their personal wealth is routed through their charitable contributions and is *never taxed*. They're smart enough to recognize that if they gave the money to the government it would be wasted. They want the right to decide what to do with their money – and the rest of us want that same right.

  • mrbean

    Warren Buffet and George Soros make their money by hiring people who are moving "paper" around not by building anything, providing any product, or providing any essential service. Warren Buffet and George Soros are very good paper pushing manipulators at best. They are not any where even near equivalent to the industrialists and entrepreneurs that built the vast economic engine of this country that provided for the highest standard of living in the world.

  • Hank Rearden

    Buffett is playing politics. He is a very partisan Democrat. By bringing up his personal tax status, he is trying to make Republicans look like schlubs for wanting to hold the "no new taxes" line. The Republican point is that the crisis in government finance is in spending. The last two deals with Democrats to raise taxes and in return get spending cuts – the Reagan / Tip O'Neill deal in the 1980's and the George HW Bush / George Mitchell deal in the 1990's – were simply blown off by the Democrats once taxes were raised. In both cases there were no spending cuts. The Democratic Party is committed body and soul to increasing spending. In the words of one of their own, but also an honest man, Pat Caddell, "I tell you as a Democrat that the Democrats will never cut spending; they don't believe in it."

    The Republicans with the Tea Party are trying to rescue the future of the country by focusing the political debate on the explosion in spending under Obama. Spending has gone from 19% of GDP to 25% of GDP under Obama. If 19% is considered a baseline, then with the current GDP at about $15 billion, we are overspending by about 6% of GDP, or about $1 trillion.

    Buffett has chosen to use his stature with the public to muddy the waters for the Republicans and make the political space safe for continued Democratic spending.

    Buffett has organized his entire life and business career to avoid paying taxes. He is scornful of people who trade in the stock market because they then have to pay taxes on their profits. Berkshire Hathaway has been structured to avoid this, a key element in the accumulation of Buffett's wealth. And now, by arranging to gradually transfer his wealth to the Gates Foundation, his wealth will NEVER be taxed!

  • mlcblog

    I thought he was a lib, but it's another ruse for him to make a bundle.

  • Guest

    What percent of their income did people pay is what counts not what percent of total taxes. The other factor is how much was left for people to live on. The middle class can't take much more. They will all be in soup lines so that the rich can live like royalty. The rich deserve to keep a fair share of their income but they are not paying a fair share of their income. A flat rate tax would be fair to all.