Warren Buffett just wrote an article in The New York Times that is essentially a plea to the government to tax him more. The article drew my attention, because it is a rare moment when a mega-rich person thinks that their taxes should be raised.
I read the article with a watchful eye, because you never really know what the real meaning behind something like this is. I think that it is quite possible that Warren Buffett is now more concerned about the country and the republic than his own personal wealth. He is a bit of an insider when it comes to America, and no longer views himself as an investment manager, but is looking to make the world a better place, sort of the way Bill Gates doesn’t look at himself as the CEO of a computer company, but as a guy looking to solve global problems. [expand]
But I think that Warren Buffett’s article is a lot more selfish and self-preserving than meets the eye. When you first read it, it appears that Warren Buffett has somehow no longer become greedy anymore and doesn’t care too much about his money. His words are strong, as is his logic as to why taxes on him and the mega rich should go up. It’s all about supporting the middle class, he states, and it’s all about helping out people who are in desperate situations in America. He also states that when taxes are higher, it doesn’t stop people from investing their money in the markets.
“I have worked with investors for 60 years and I have yet to see anyone—not even when capital gains rates were 39.9% in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”
This is all fine and good for Buffett, after all, if he wants his wealth taxed away to help the little guy than that is fine with me, after all, I’m very much a little guy and I wouldn’t mind a little bit of Buffett money.
But I can tell you what I really think about Buffett’s op-ed in The New York Times. I think that Buffett is so keenly aware of how bad and how deep the American financial debt crisis is, that he is more concerned for himself than anybody else. Buffett is a financial genius, and he knows more than anybody else that having S&P downgrade American debt, a printing press that is out of control and a seemingly endless amount of borrowing to pay for the interest on more borrowing is so bad and so incredibly dangerous for America as the leader of the free world, that he’s concerned that the very dollars in his pocket and in his bank accounts will be worth less and less if the Federal government continues to go down this path of borrow, print and pretend it doesn’t matter.
I think Buffett saw the riots in London and got a little nervous about it. I think he saw the riots in Greece and got a little concerned about that too. I don’t care what anybody says, all of this unrest in modern Europe has everything to do with money and little to do with anything else and Warren Buffett knows that better than anybody else. And he also knows that it could easily happen in the U.S. if we continue down what is essentially the same road that Europe has been taking when it comes to the euro.
Personally, I don’t believe in higher taxes and resist them as much as possible, however I am a Democrat and a realist when it comes to the economy, and I will say that when Buffett starts pleading for higher taxes, I take notice, because rarely, if ever, do people in his world, or in anybody’s world for that matter, give away their money (whether it’s for charity or taxes) unless there is something in it for them.