Billionaire Warren Buffett created a stir last week, writing in the New York Times, My friends and I have been coddled long enough by a billionaire-friendly Congress.
Its time for our government to get serious about shared sacrifice, Mr. Buffett urged, specifically advocating that Congress raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains.
Buffett has a point, of course, perhaps several points. Who can defend the fairness, or even sanity, of a tax system in which a man making tens of millions or even billions pays less in taxes, percentage-wise, than someone mowing his lawn and taking home 1/100 of a percent as much income? But, of course, no one anywhere ever defends our federal tax code. Not even the congresspeople who voted it into law . . . and have the campaign contributions to prove it.
Or take the Sage of Omahas argument that wages shouldnt be taxed at higher rates than investment income. The logic is not without some plausibility. Still, my solution would be to cut income tax rates, not to raise the tax take on capital gains.
All of which invariably raises a far more fundamental issue: The size and scope and success of government. You see, to want more tax revenue implies something: that government needs and should have more money, and receive an even higher take of the sum domestic product.
Isnt that unquestionably what Buffett is saying? Government is not large enough. Government can spend these dollars better than the taxpayers who earned them.
Many conservative politicians and pundits were quick to suggest Buffett put his own money where his mouth is: