Sunday, August 21, 2011
It's been about a month since I last wrote anything so we have some catching up to do. As you all know Rick Perry is now in the race for the presidency on the Republican side and that must be making the media favorite Mitt Romney pretty upset. I've said before that I don't trust Romney as a conservative and when he ran for president back in '08 he had the worst spending to vote ratio of any candidate, Mike Huckabee had the best. We'll see how this all shakes up in the months to come but I'm glad Tim Pawlenty left the race as few cared that he was ever in it to begin with.
I haven't changed my stance as I still think Newt Gingrich is the best candidate for the job this time around but I don't expect the Republican party at large to agree and unfortunately he'll most likely lose the nomination much to my dismay. That's enough about all of that so let's get down to business with what this article is really about.
Apparently Warren Buffett hasn't been able to sleep well lately because he feels so guilty about how little he is paying in taxes. He's out there with President Obama talking about how we should raise taxes so that Buffett and other rich guys, like Bill Gates can stop feeling so guilty about being rich and get back to paying their fair share.
Buffett, chairman of the conglomerate Berkshire Hathaway, said his federal tax bill last year was $6,938,744, the equivalent of 64 shares of Berkshire Class A stock.
"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 said.
This makes me wonder about a very basic and simple question. If Warren Buffett and other rich liberals really want to pay more in taxes then why do they need the government to raise taxes on everyone, including small business owners who fall into the $250,000+ category? Sure to the average folks all of them are rich but they also create a majority of the jobs. Why doesn't Buffett and company simply write a check to the government with no change in tax rates needed? You may have noticed that George Soros, another billionaire who destroys currencies around the world in order to massively enrich himself seems to agree with Buffett on taxes. Of course without Soros money then groups like MoveOn.org and many others wouldn't even be able to exist.
Let's use an example with simpler math figures as the questions above won't be addressed by folks like Buffett and I'll get to why in a bit. Well use the figure of $1,000,000 dollars to keep things simple. Buffett says that he paid 17.4% to federal income taxes and he should have to pay more. If we use the million dollar figure that percentage would work out to $174,000. Now since we don't know exactly how much of a percentage would help Buffett sleep better at night let's just say he'd rather pay 25%.
This would, again to keep it simple using our million dollar figure, push his taxes from $174,000 to $250,000. If Warren Buffett would like to pay more in taxes then why can't he write a check to cover the difference from his 17.4% up to 25%? If you had the million dollars that I've been using as an example then you'd simply have to write a check to the government for $76,000. Warren Buffett is a billionaire investor and yet it seems he hasn't been able to figure that out, that seems strange to me.
Of course in truth he has figured it out but as usual there's something more sinister behind his motives here. He's trying to give credibility and justification to Obama and other progressives call to raising taxes on the rich. The real problem is that the mega-corporations and mega-rich aren't going to be hurt by the higher taxes the way the smaller competitors will. This is what happened during the New Deal, which most professors won't actually teach anymore, using the NRA, (the blue eagle government regulatory rules not the gun guys), to control prices and having a high tax rate led to the crushing of smaller businesses to the advantage of larger ones as well as maintaining a roughly 20% unemployment rate during the socialist new deal, which most liberals still refer to as an astounding success due to their ignorance of the factual results of the New Deal policies.
Keep in mind that much of the "new jobs" during the new deal were just giving government jobs from FDR's many new government agencies to unemployed in order to create the illusion of jobs and prosperity even though the private sector was being destroyed. Sounds an awfully lot like our current president doesn't it, keyword being awful.
Obama's policies have thus far failed and most Americans are beginning to come to and admit at least that much. As usual there's plenty of finger-pointing going on in order to shift blame but that's the norm for political failures in our time. Plenty of Republicans would probably still defend Bush as a conservative even though he proved that he wasn't especially in his second term in office. (Bush 43 even defended the failed bailouts in his book Decision Points).
It'll be very interesting to see if Obama looks like he's headed for a Reagan vs. Carter-esque defeat whether Hillary Clinton will re challenge him in an attempt to save the Democrats from another ass-kicking like the congressional one they received in the 2010 mid-term elections. Hillary would most likely have no problem defeating Obama in the nomination this time around and while she probably realizes that she may avoid running for office over fear of the divide it would place within the Democratic party.
Those who continue to defend socialist liberal policies are trying their best to find a way to justify why Obama's government centralized economic planning isn't working. The fact of the matter is that it isn't about application as many tend to believe, even though there is practically no evidence of socialism working out well for the people and prosperity, it's a matter of the principles of socialism.
Socialism, even if you don't want to call it that, we'll call it total government control over the economy, can't work for one very simple reason. Government is naturally inefficient and corrupt. The amount of things that government has to monitor in a socialist society are simply too many and too large for it to handle well. Politicians are naturally inclined to want to help political allies and friends from both parties and that is only made worse by our lobbyist which are so entrenched in Washington that both parties would never pass a simple law making lobbying illegal. Regardless of the fact that it would most likely have widespread support from a majority of the people.
There is no doubt as it's proven that throughout history lower tax rates help with employment. Liberals love to talk about the Clinton 90's as a great example of high tax success but they ignore some major factors, such as welfare reform, which Clinton vetoed twice, even though he didn't mind taking credit for it after it was proven to work. This is another reason for Republicans to nominate Newt Gingrich, just throwing it out there. Liberals also tend to forget something else...
In 1997, the Republican-led Congress passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. The 1997 bill:
Lowered the top capital gains tax rate from 28 percent to 20 percent;
Created a new $500 child tax credit;
Established the new Hope and Lifetime Learning tax credits to reduce the after-tax
costs of higher education;
Extended the air transportation excise taxes;
Phased in an increase in the estate tax exemption from $600,000 to $1 million;
Established Roth IRAs and increased the income limits for deductible IRAs;
Established education IRAs;
Conformed AMT depreciation lives to regular tax lives; and
Phased in a 15 cent-per-pack increase in the cigarette tax
Notice the first thing which I put in bold, wait a minute....!! Is that an evil capital gains tax cut for the rich I see.......why yes, yes it is. Do you remember how horrible the economy was from 1997 through 2000? Actually it's liberals who love to point to that economy as great. Don't you remember all of the criticism of that evil conservative Bill Clinton cutting taxes for the rich? Of course you don't but never mind just keep listening to Obama and Buffett talk about how we need to increase the capital gains taxes.
For the record it was Ronald Reagan who cut the capital gains tax rate down to 28% which Clinton then lowered again to 20%. Remind me what happened in the 80's and 90's.....oh yeah that's right, economic booms.
So the next time you see President Obama and Warren Buffett talking about how Buffett feels guilty because his capital gains taxes are too low, send Buffett a memo reminding him that he can write a check anytime. If he refuses to write one then be sure to ask him why not? Maybe there's more than meets the eye with the case he and the President are making. Never forget that in politics much is not as it seems.