Tuesday, July 03, 2007

Just Another Limousine Liberal?

Hopefully everybody saw the Investors Business Daily editorial yesterday entitled "Buffett’s Bad Math".

Two quick points on it:

First, as IBD carefully researched, there’s simply no way Mr. Buffett’s secretary paid 30 percent in taxes.

Second, the reason Mr. Buffett has such a low tax rate of only 17.7 percent is that he takes all of his income as dividends and capital gains.

Nobody’s accusing Buffett of breaking the law. And, as a savvy investor, he ought to use the rock bottom investment tax rate that spurs capital formation and rewards his effort—just like private equity buyout funds, hedge funds, and other partnerships.

But there is hypocrisy here.

Besides playing fast and loose with his secretary’s tax data points, Mr. Buffett wants to raise taxes on all the other players in the rarified investment risk game. But the problem is he wants everybody else to pay higher taxes on their high-risk investments.

In other words, Buffett’s already made his dough—a ton of it. But now it sounds like he doesn’t want to allow other clever and ambitious people to have the same opportunity to make their own bundle.

Is Mr. Buffett just another limousine liberal speaking with forked tongue? I don’t know, I’ve never met him. But it sure sounds like it.