Misc. Ramblings

There's nothing intrinsically wrong with being rich. There are good people who are rich and evil people who are poor (and vice versa). Even the Bible talks only about how the love of money is a sin and how that love makes it more difficult to go to Heaven than it is for a camel to go through the eye of a needle.

So it should not come as a surprise when billionaire Warren Buffet comes out against a tax cut that would directly benefit him and others of his economic stratum (see the story here from the Washington Post. Note: requires free registration). Below are a few snippets of his column:

The annual Forbes 400 lists prove that -- with occasional blips -- the rich do indeed get richer. Nonetheless, the Senate voted last week to supply major aid to the rich in their pursuit of even greater wealth.

Administration officials say that the $310 million suddenly added to my wallet would stimulate the economy because I would invest it and thereby create jobs. But they conveniently forget that if Berkshire kept the money, it would invest that same amount, creating jobs as well.

Overall, it's hard to conceive of anything sillier than the schedule the Senate has laid out. Indeed, the first President Bush had a name for such activities: "voodoo economics." The manipulation of enactment and sunset dates of tax changes is Enron-style accounting, and a Congress that has recently demanded honest corporate numbers should now look hard at its own practices.

When you listen to tax-cut rhetoric, remember that giving one class of taxpayer a "break" requires -- now or down the line -- that an equivalent burden be imposed on other parties. In other words, if I get a break, someone else pays. Government can't deliver a free lunch to the country as a whole. It can, however, determine who pays for lunch. And last week the Senate handed the bill to the wrong party.

Supporters of making dividends tax-free like to paint critics as promoters of class warfare. The fact is, however, that their proposal promotes class welfare. For my class.

While being rich is a Good Thing, being greedy is something else (contrary to Gordon Gecko's famous "Greed is good." movie speech). The US Senate tax plan would steal, and I don't think that is too harsh a word, hundreds of millions of dollars from the middle class and working poor and give it to the top few percent that are rich. To what public purpose would this be done? How is it that Buffet now pays about the same percentage of his income (30 percent) as does the receptionist at the front door? How would it make things better, under the tax plan, for his tax rate to then drop to three percent while the receptionist continues to pay 30 percent?

As Buffet notes, the money would be invested and jobs would be created whether it was transferred to the rich or not. Hence, it seems, the only plausible explanation is to reward the people who helped the Senators to be where they are. But not only is this wrong-headed, it is poor public policy.

Aloha!