As Shout Bits has mentioned before, billionaires like Warren Buffett perennially entreat Washington to raise their taxes. The fallacy of the ultra-rich’s argument is that the US does not tax most forms of wealth apart from real estate. A ‘Buffett rule,’ as Pres. Obama calls it, is just a higher income tax bracket. For those who have already achieved great wealth, that is a small penalty, but for those who are still working toward success, the tax is a significant barrier. Mr. Buffett’s plan is actually the means to stifle his emerging competition and keep him at the top. If Mr. Buffett really wants the rich to pay more, he should advocate a wealth tax.
A wealth tax is just that, a levy on an individual’s balance sheet. France assesses 1.8% of any wealthy person’s estate each year. Many other European nations do the same, and Spain recently adopted the practice for people whose net worth exceeds about $1 million. If the goal is to punish billionaires, the wealth tax is the way to go.
Obama has conveniently confused people who earn $250,000 per year with private jet owners. Private jets are owned by people whose net worth exceeds $100 million. For these people, $250,000 per year is the interest their checking account would pay. Of course the real fat cats are the billionaire class such as Google’s founders, whose private jet is a Boeing 767.
Rather than assuaging Mr. Buffett’s guilt by taxing people who earn $250,000 per year, he should seek a wealth tax. A 10% wealth tax on net worth above $1 billion would cost Mr. Buffet $4.9 billion each year, and Shout Bits suspects Mr. Buffett would find that bill meets the standard of ‘fair share’ with room to spare. Unfortunately, the US has only about 412 billionaires who would only pay about $260 billion each year while their wealth lasted. As Obama and Buffett surely know, the real tax base in the US is the middle class, and any “revenue enhancement” invariably falls on their backs.
In the unlikely event one of the US’s hypocritical ‘fair share’ billionaires reads this article, relax – it is only a joke. The point is that Obama and Buffett don’t really want to tax the wealthy, rather they want to drain the upper middle class under the cover of making Champaign sippers chip in. Mr. Buffett’s hamburger and Cherry Coke are, in fact, quite safe.
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