Failure to Look Past the End of Their Noses

Billionaire Warren Buffet recently made comments in the New York Times that the president’s plan to “soak the rich” is not bad, it just needs some adjustments.  He feels that the bar for raising these taxes should be raised to people like him who make over 1 million dollars a year, no matter where they get their income. 

This would put an end to creating wealth through strategic investment and would greatly hamper anyone from becoming as wealthy as he is.  In a New York Times piece he wrote, he said, “Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But 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. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”  He also wrote in that same piece that wealthy people like him “have been coddled long enough by a billionaire-friendly Congress.”

 Why would someone who has made a lot of money through his own efforts and hard work ask for the government to take more of his money away?  It just defies all common reason and logic.  Warren Buffet has done this for some very specific reasons.

1. Warren Buffet wants desperately to be liked by the political “in crowd” and all of their hanger-ons.  He’s afraid of the potential public relations problems he might face if he tells people who don’t have what he has, for any number of reasons, that he has a right to keep his own money without fear of the government taking it from him and wasting it on some cockamamie, hare-brained scheme to “make life more fair by spreading the wealth around” to everybody, no matter if they work or not.  He wants to be invited to the political dinners and be thought of as someone who‘s really an ‘okay guy for a rich guy’.  As they say, “If you can’t stand the heat, get out of the kitchen.”  I never thought someone like him would be afraid of a little bit of bad publicity from people who haven’t got what it takes to do what he has done in his life.

2. Mr. Buffet apparently doesn't want anyone to be as wealthy as he is.  He’s not only at the top of the economic ladder, he wants to pull the ladder up so no one else can get to the heights he has reached.  For any young entrepreneur coming up, sorry, but there’s no room in the inn for you.

3. “The Oracle of Omaha”, as he is called is old and will probably not be here to face the consequences of his actions in the future.  At eighty years old, he’s not only in the autumn of his life, he’s in the dead of winter with eight feet of snow on his grave site.  But the taxes he will have to pay are probably of no consequence to him because he has enough to keep himself comfortable and that’s all that matters to him.  It reminds me of another very wealthy and powerful man who had the same attitude. 

There is a story in the book of 2 Kings about King Hezekiah, king of Judah.  He was sick and God told him through the prophet Isaiah to “put your house in order, because you are going to die; you will not recover.” (II Kings 20:1 NIV)  Hezekiah prayed to God with tears and God relented, allowing him to live another fifteen years.  A little later, the king of Babylon sent emissaries to him and Hezekiah showed them all the wealth of the kingdom.  When Isaiah asked what these men saw, Hezekiah told him that they saw everything in his palace.  God told him through Isaiah that the time would come when all his wealth would be taken away from him and his descendants would be slaves to the king of Babylon.  Hezekiah’s response?   “The word of the LORD you have spoken is good,” Hezekiah replied. For he thought, “Will there not be peace and security in my lifetime?” (2 Kings 20:19 NIV)

There are a few things that maybe even Warren Buffet may not have considered, but then again, he probably has. The first is, and I’m no expert in economics and haven’t even taken an economics class in college, that anything you overtax will by its very nature shrinking in size.  The state of South Dakota had a referendum and passed a new tax of $1.00 per pack on every pack of cigarettes sold in the state in 2008.  The revenue generated was supposed to go to the schools.  Sales of cigarettes plummeted almost immediately with some people who lived on the borders of states like Iowa and Nebraska going across state lines to buy their cigarettes and others just quitting smoking altogether rather than pay such an exorbitant tax on their habit.  Even the state of California, which is almost bankrupt after years of democrat control, has lost almost two and a half million residents in the past ten years due to the excessive taxation of the people producing wealth.  According to a Manhattan study, “The Great California Exodus: A Closer Look”, by Thomas Gray and Robert Scarmadilia (October 2012), roughly 225,000 residents vacate California each year and have done so consistently in the last decade.  And they take their money with them.  California has one-eighth of the country’s population but one-third of its welfare recipients.

France found out that “soaking the rich” is an invitation for the wealthy to find a more suitable climate to live when Gerard Depardieu, one of France’s most famous and beloved actors established a residence in the small village of Nechin in Belgium, just across the border from France, to avoid France’s 75% millionaire tax implemented by the socialist government of President Francois Hollande.  And he is not alone.  France’s richest man and head of the LVHM luxury goods empire, Bernard Arnault, and the Mulliez family, billionaire owners of Decathlon sports and the Auchan supermarkets also moved to Belgium to avoid excessive taxation of their wealth.  Others, like actor Johnny Depp, French  singer Johnny Hallyday and Alain Delon have also left the country of France to live, and pay taxes, elsewhere.    

Another thing people need to consider is that wealthy people are not stupid.  They did not get wealthy by just allowing the government or anybody for that matter, to just rob them blind.  The Warren Buffets of this world can leave this country and take up residence in any country they choose.  They don’t have to renounce their citizenship or anything drastic like that.  And when they are living in another country, that particular country gets the benefits of their wealth.

Costco and many other companies, The Washington Post included, are giving their yearly dividends before the new capital gains taxes taking effect on January 1^st.  This helps many wealthy people, Warren Buffet included, to avoid the new taxes that are obviously coming down the pike in the next few weeks.  I told you these people are not stupid.

Here’s a solution to Warren Buffet’s problem that he’s not paying enough taxes: Simply write a check made out to the IRS and mail it in to Washington DC.  There is no law against rich people giving more of their money, or all of their money if they so choose, to the federal government.  But making everybody do the same thing whether or not they want to or can afford to is just wrong-headed.

Both Warren Buffet and King Hezekiah are about as short-sighted as a man can be.  Both men’s thinking is exactly the same.  Neither of these two men could see past the end of their own noses and are only thinking about right now, right here.  Warren Buffet must be fairly intelligent to be as wise in business and to have such a great acumen at making wealth.  But his lack of foresight for his heirs and this country is about as selfish as a man can get.  He’s called the “Oracle of Omaha” and is supposed to be really smart.  These words and actions don’t seem all that smart to me.  They just seem selfish and petty.