Why Doesn’t Warren Buffet Pay Extra Taxes?

[dkf]

This WSJ editorial caught my eye, because it makes a seemingly valid point about wealthy people who call for higher taxes on the rich.

I wish I had a dollar for every time a wealthy liberal has declared he thinks he should pay more taxes. That list includes Warren Buffett, George Soros, Bill Gates Sr., Mark Zuckerberg and even Barack Obama, who now says that not only should rich people like him pay more taxes, they want to pay more. “I believe that most wealthy Americans would agree with me,” he said of his tax-hike plan. “They want to give back to the country that’s done so much for them.”
…
So why don’t they? There is a special fund at the Treasury Department for taxpayers who want to make “gift contributions to reduce debt held by the public.” But very few do. Last year that fund and others like it raised a grand total of $300 million. That’s a decimal place on Mr. Zuckerberg’s net worth and pays for less than two hours worth of federal borrowing.

I understand the basic satisfaction of saying, “Look, mister, if you really want to pay more taxes, no one is stopping you,” but I don’t think that it’s actually a very good argument. The reason why people like Bill Gates and Warren Buffet advocate for higher taxes but don’t voluntarily pay higher taxes than the law requires is pretty obvious: If the US raised the top marginal income tax rate and the capital gains rate in order to try to collect more money from people like Buffet and Gates, this would affect all people in that tax bracket. (If the current tax brackets were used, that would man any married couple making more than $379,000/yr.) This would mean that while high tax advocates such as Warren Buffet would pay more taxes, their relative wealth compared to the other wealthy would remain the same. Thus, Buffet’s ability to buy or control things via his wealth would not diminish relative to the other wealthy.

On the other hand, if Buffet decided to simply write an extra check to the Feds each year for $10 million, the result would be that his relative income (and thus buying and influencing power) would fall somewhat relative to other members of is class. Now, as someone who makes a number of high profile donations, Buffet is clearly willing to give money away, but when he makes a direct donation to a non-profit he has a pretty good say in how that money will be used. If he simply writes a check to the Feds, he has very little. As someone who supports higher taxes, he’s clearly okay with handing more money over to the Feds — but I think it’s pretty rational that he’s not willing to do so in a way that reduces his economic power, and doesn’t do all that much to stem the budget problems.

http://the-american-catholic.com/2011/05/16/why-doesnt-warren-buffet-pay-extra-taxes/

[Sarah Ibarruri]

1. That's the right wing point of view when they want to shut up...

the rich that want their taxes increased. And we know the right wing want to shut up anyone who expresses a point of view contrary to that of right wingnuts.

[Swede]

2. People that ask this question just don't get it.

They never will.

[Roselma]

3. Relative wealth/relative earnings.

No wealthy person wants to give away (lose) so much of his/her personal wealth/earnings as to lose competitive status. Imagine if Buffett gave away (lost) 1/3 of his wealth/earnings, but his competitor didn't. His competitor would then possibly overtake him, possibly by conducting a hostile takeover of his company or some other maneuver. If all wealthy people have to part with the same percentage of their wealth, they all remain at the same status point competitively.

[chollybocker]

4. Why doesn't the Catholic church pay more taxes?

Or some?

What a load of horseshit.

[Saving Hawaii]

5. dkf... it's an externality issue.

Warren Buffett recognizes that if everybody of his wealth is paying a higher percentage, it generates a positive externality that he (and the rest) benefit from. If he simply goes out and donates all his money to the US government, it also generates an externality but he enjoys very little of it. Learn about game theory and cooperation. It'll explain the problem quite well.

The logic in your OP basically suggests that none of us should want to pay taxes. If I get away paying nothing and everybody else keeps paying, I get to enjoy living in the United States. But if everybody takes advantage of my logic this place quickly turns into Somalia. To ensure that a 'game' provides an optimal outcome, you do sometimes have to control players' options.

[Kaleko]

7. I like the way you put that.

Welcome to DU!

[JoePhilly]

10. +1

[FarLeftFist]

12. +1

[The Wielding Truth]

6. Well, they are the job creators. Right? So they already give and give and give.

If these fools are accusing their Gods of not writing extra checks to the government I say, "Oh no, please let them keep every bit of their extra income. They are our benefactors. I bow to you, oh great Billionaires.:sarcasm:

This is not a land where we have lords and those who are unfortunate or even lazy are left to die. WE ARE a land of common good. That is how a country and it's economy remains stable. Selfishness and survival of the fittest is not found anywhere in any bible. Not even their holy version of the original Constitution.

Their logic is colder than Scrooge on his worst day. I shudder at their small world concept.

If it is so good for the those earning over $1 mil annually, who have had the benefit of lesser taxes over about the last 10 years and it will help so much for them to continue, then why has it only been detrimental to our economy as long as it has been in place?

Here's some study on it.
http://www.tax.com/taxcom/taxblog.nsf/Permalink/CHAS-89LPZ9

[trueblue2007]

8. THESE PEOPLE ARE ALL TALK. they are not generous

[The Wielding Truth]

9. Please read on,trueblue.

You will notice the: :sarcasm: :fistbump:

[FarLeftFist]

11. We need millionaires on board too, not just billionaires.