Is it possible that I’m smarter than Warren Buffett?
Well, not likely. There’s so much evidence to the contrary, at least of the "if you’re so smart, why aren’t you rich?" kind.
But, on my side, I didn’t let myself be interviewed by Tom Brokaw and say that I should be taxed at a higher rate. Buffett compared the federal taxes he pays to the taxes his office workers pay. Relating these tax amounts to the respective incomes, he then figured rates:
Mine came to — 17.7 percent. The average for the office was 32.9 percent. There wasn’t anybody in the office, from the receptionist on, that paid as low a tax rate. And I have no tax planning, I don’t have an accountant, I don’t have tax shelters. I just follow what the U.S. Congress tells me to do.
Brokaw immediately eggs Buffett on, asking about why there’s no outrage about this. Buffett is philosophic:
. . . I think what people don’t realize is that almost one third of the entire budget comes from payroll taxes. And payroll taxes on income, just like income taxes are taxes on income.
What Warren Buffett has done, of course, is lump Social Security contributions (payroll taxes) with the federal income tax. Then, he complains (so to speak) that his Social Security taxes aren’t high enough. His claim makes no sense if Social Security taxes are excluded. Considering the basic federal income tax only, he pays at a higher rate than his assistants. Far more.
But he lumps the two together for a specific set of purposes. And we can expect to hear a lot more of this kind of talk as the days of Social Security insolvency come nearer. What is not being made clear by Mr. Buffett, nor the myriad other Democrats who make this pitch, is what a revolution they are proposing in the very concept of Social Security. And what they are sweeping under the rug.
You see, Social Security is indeed a tax — it is a forced expropriation of wealth from individuals to government. But it is a tax designed to support a safety net pension program. It was not designed to fund highways or rockets or indoor rain forests.