John Ransom

Warren Buffett and President Obama have a better idea than taxing the rich.

They just want to start with a tax on the “mega-rich” and see how it goes.

Look, I’m an admirer of Warren Buffett’s investment accomplishments. But he should have stayed out of politics. A guy can be good at one thing and not so admirable at others.

I always think that it’s a mistake for someone to borrow their expertise from one area and try to leverage that into moralistic homilies on tax policy for the rest of us.

Especially when that guy won’t come clean about his motives for the homiletic or his tax-return.

Because as the character Aaron Altman in the movie Broadcast News observed about his nemesis, I believe that Buffett, while a very nice guy, is the Devil.  

“What do you think the Devil is going to look like if he's around?” said Altman in the pivotal scene, “Nobody is going to be taken in if he has a long, red, pointy tail. No. I'm semi-serious here. He will look attractive and he will be nice and helpful and he will get a job where he influences a great God-fearing nation... he will just bit by little bit lower standards where they are important.”

Because Buffett has lowered the standard when it comes to truth.

In short, Buffett’s not telling the truth.

Buffett via CNNI have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain.

Investors make investment decisions all the time on the basis of total return after taxes. Anyone figuring out the rate of return without taking into account what they have to pay in taxes is not really figuring out their rate of return.

Want proof? Ask any investor why municipal bonds have lower rates of interest than taxable bonds. It’s because taxes make a difference. 

The tax rates of the rest of the world are going down, not up. Raise tax rates here and watch money go to other countries. A trillion in U.S. cash is already sitting in foreign accounts legally. That money won’t come back to the U.S. because were it to be invested here it would immediately be subjected to higher U.S. corporate taxes.

It’s staying offshore for one reason, and it isn’t financial. The Democrats’ ideology of “fairness” prevents them from allowing them to bring tax rates in line to capture the extra revenue these foreign profits would add.  


John Ransom

John Ransom is the Finance Editor for Townhall Finance.
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