MILLER: Calling Buffett’s bluff

There’s nothing fair about making bogus claims to justify tax hikes

Question of the Day

Should Congress make English the official language of the U.S.?

View results

President Obama still thinks taxes need to be raised because the ultra-wealthy CEO of Berkshire Hathaway isn’t paying enough to Uncle Sam. “If you’ve done well - I’ve done well - then you should do a little something to give something back,” Mr. Obama said while standing under a Cincinnati bridge on Thursday.

He was so fired up he slipped and accidentally told the truth: “All I’m saying is that Warren Buffett’s secretary should not be paying a lower tax rate on her income than Warren Buffett.”

Mr. Obama and Mr. Buffett both want bigger government and wealth redistribution. Neither claims raising taxes on job creators and investors will solve the $14.7 trillion debt crisis; they just speak vaguely about being “fair” - a term Mr. Obama read seven times in his bridge speech. Mr. Buffett told PBS’ Charlie Rose in August, “I don’t think we should cut spending dramatically now. I don’t think that what I’m talking about on taxes solves the deficit gap at all. But I think fairness is important.”

The top 10 percent of income earners making over $100,000 a year pay 70 percent of all income taxes. “We already have a very steeply progressive tax system,” said Ryan Ellis, tax-policy director of Americans for Tax Reform. “There’s nothing fair about it now. Technically, if you want to be fair, you’d raise taxes on the poor and decrease them on the wealthy.”

Congressional Republicans realize this and are calling the billionaire’s bluff. Texas Sen. John Cornyn told The Washington Times on Friday, “If Warren Buffett’s taxes are going to serve as the basis for national tax policy, in the interest of transparency he ought to disclose them.” Rep. Tim Huelskamp, Kansas Republican, fired off a letter to Mr. Buffett challenging him to release the forms.

From what we know so far, Mr. Buffett’s arithmetic doesn’t work out. The tax returns he waved at the PBS host only raised more questions. Mr. Buffett gives himself a salary of $100,000 and claims that the average Berkshire employee pays a 36 percent rate compared to his own 17.4 percent rate. He justified the discrepancy by claiming the majority of his income from dividends and capital gains does not get hit with the 13.3 percent payroll tax. “That alone is higher than the tax rate on capital gains or dividends,” he told Mr. Rose.

That’s not accurate. Employees are only responsible for 5.65 percent of that tax, which is significantly less than the capital-gains levy of 15 percent. “He’s is assigning the entire payroll tax to be paid by his secretary, when in reality, his company pays half,” Mr. Ellis explained.

The tax expert also pointed out that, “It’s not like she’s paying those taxes and nothing ever happens again like with income tax. She gets Social Security and Medicare benefits later.”

Internal Revenue Service figures show a person making $60,000 a year had an average tax rate of 11.6 percent. So adding the payroll tax, Mr. Buffett’s secretary is likely paying 17.2 percent, which is still less than her boss.

The “Buffett rule” is being built upon a lie designed to fan the flames of class warfare and allow Mr. Obama to bring his liberal base back into the fold for 2012. The quickest way to end the speculation is for Mr. Buffett to release his returns for all to see.

Emily Miller is a senior editor for the Opinion pages at The Washington Times.

© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.

blog comments powered by Disqus
TWT Video Picks
You Might Also Like
  • Maureen McDonnell looks on as her husband, former Virginia Gov. Bob McDonnell, made a statement on Tuesday after the couple was indicted on corruption charges. (associated press)

    PRUDEN: Where have the big-time grifters gone?

  • This photo taken Jan. 9, 2014,  shows New Jersey Gov. Chris Christie gesturing as he answers a question during a news conference  at the Statehouse in Trenton.  Christie will propose extending the public school calendar and lengthening the school day in a speech he hopes will help him rebound from an apparent political payback scheme orchestrated by key aides. The early front-runner for the 2016 Republican presidential nomination will make a case Tuesday Jan. 14, 2014, that children who spend more time in school graduate better prepared academically, according to excerpts of his State of the State address obtained by The Associated Press. (AP Photo/Mel Evans)

    BRUCE: Bombastic arrogance or humble determination? Chris Christie’s choice

  • ** FILE ** Secretary of State Hillary Rodham testifies on Capitol Hill in Washington, Wednesday, Jan. 23, 2013, before the Senate Foreign Relations Committee hearing on the deadly September attack on the U.S. diplomatic mission in Benghazi, Libya, that killed Ambassador J. Chris Stevens and three other Americans. (AP Photo/Pablo Martinez Monsivais, File)

    PRUDEN: The question to haunt the West

  • Get Breaking Alerts