Our View: ‘Apples and oranges’
Posted: December 3, 2012
Garrulous multibillionaire Warren Buffett forever believes he has something meaningful to say, particularly on subjects relating to the economy. Sometimes we wish he would refrain from chiming in, as his sound-byte contributions spread far more confusion than they do light.
One such instance came last week on NBC’s “Today” show when host Matt Lauer asked this surprisingly cogent question: “So bottom line, would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?”
Mr. Buffett’s reply: “No, and I think it would have a great effect in terms of the morale of the middle class, who have seen themselves paying high payroll taxes, income taxes. And then they watch guys like me end up paying a rate that’s below that, you know, paid by the people in my office.”
OK, if anything, this only muddies rhetorical waters already turgid. For starters, Mr. Buffett belongs to the investor class, so his “earnings” are not wages or salary, but rather income derived from investments. They are taxed at a lower rate than income accrued by, say, corporate executives or small-business owners. What we must remember is that Mr. Buffett’s billions, earned through his business dealings, have already been taxed.
But the Berkshire Hathaway titan chooses not to acknowledge this fact. Instead, he continually states that he’s taxed at a lower rate than some of his employees. He conveniently ignores the “apples and oranges” differentiation. Folks listening should not be fooled.
As for believing that heaping higher taxes on “the rich” would raise the “morale” of the middle class, try spinning that tale on the out-of-work draftsman who will not be hired because a small-businessman, slammed with higher taxes, has opted not to expand his operation and hire new workers.