Michelle Obama's seat mate at BHO's state of the union address tonight will be none other than Warren Buffett's secretary. She, you will recall, was said by her boss, Warren Buffett, the oracle of Omaha, to be taxed at a lower higher rate than Mr. Buffett. And this was provided as a home spun rationale for the Buffett Rule which would result in a surtax on millionaires.
Arthur Laffer does a pretty good job of skewering Mr. Buffett's idea:
Putting aside all the oohing and ahhing over Mr. Buffett's selflessness, his effective tax rate on his true income would hardly budge if this "Buffett Rule" were applied. What's worse, raising the highest tax rates would most likely worsen the budget deficit and lead to a further weakening of the economy. Everyone would suffer.
But Barack Obama needs a political issue, and demonizing the rich is the issue he is running on. Never mind that the people with high incomes are already footing the bill for government spending.
So it's Buffett's secretary who tonight will be the face of the American who is so unfairly treated by the tax code. She pays higher taxes than the super rich because the Republicans so unfairly punish the poor and reward the rich. Into the breach, class warriors. You're the 99%, go and take what's rightfully yours. It's only fair.
As for Warren Buffett, Arthur Laffer makes a telling observation. It seems that one of Mr. Buffett's conditions of his $1.6 billion gift to the Bill and Melinda Gates Foundation was that the Foundation satisfy all legal requirements qualifying the gift as free from all taxes. Laffer:
Incidentally, I'm not the first to question Mr. Buffett's commitment to "shared sacrifice" in balancing the federal budget. In a 2007 CNBC interview, when asked why he shelters his money through tax-free strategies rather than writing big checks to Uncle Sam, Mr. Buffett responded: "I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government." [Emphasis added.]
They'll do a better job than the government. Exactly. But that's his money. What he wants others to do is something altogether different.
[Updated: Dumb mistake corrected. HT JH.]
She is a tool
Posted by: Chris Carlton | January 25, 2012 at 12:26 PM