Only solitary men know the full joys of friendship.
Others have their family;
but to a solitary and an exile,
his friends are everything.
The "New" Buffett Rule:
I Decree ALL OTHER Millionaires Should
Pay MORE Taxes Than I Do Now
This is not to be confused with the Obama Buffet Rule, which is "all we can tax" of a one-percenter's assets. The first thing that comes is Buffett secretary Debra Bosanek's salary estimate ranging from $200K to $500K by Paul Roderick Gregory, based on the information provided about Bosanek and Buffett's tax rates. (If accurate, there are going to be a lot of college kids trying to find out what coursework it takes to become Warren Buffett's secretary...)
First of all, note that when Buffett talks about his secretary paying more taxes than him, he doesn't mean it in the common sense understanding, which is aggregate tax paid, not relative tax paid. For instance, if he paid 15% on $1M, his tax is $150K. If the secretary paid 30% on $100K, the tax is $30K--Buffett is paying 5 times more tax. Does Buffett have to pay 5 times the amount for the same loaf of bread as the secretary? Does he get 5 times the number of votes or 5 times the national defense service of his secretary? Of course not. One of my signature sayings in this blog is: if there's one thing Obama knows, it's symbolism: Obama likes arugula, owns a mansion in an upscale Chicago neighborhood and knows $200K secretaries... No doubt during the debates this fall, he'll ask Romney if he has Grey Poupon... Warren Buffett earns a mere $100K at Berkshire Hathaway--the same salary he has drawn for decades. So the bulk of his income comes from investment income, not wages (the basis of social security).
Second, Buffett is comparing apples to oranges. Investment tax rates are lower for a number of good reasons. For example, in many cases, you are taxing nominal gains, not real (inflation-adjusted) gains. (Hinkle points out a Fed Reserve study indicating the effective tax rate of 233% on Dow Jones investments from 1972 to 1992; in other words, once you factor inflation (i.e., failed monetary policy) into the picture, the government was taxing principal, never mind any nominal gains.) You have already taxed the same stream of income once before, e.g., the corporate level (up to 35%). (The whole issue of subchapter S corporations is trying to deal with the federal government's double-dipping from the same stream of income--even more when you factor in compounding and other considerations.)
Now the Dems are focusing on Romney's self-reported 15% tax rate over the past 2 years on roughly $20M a year in income. There are a few things wrong with this analysis: first, Romney earned very little wages over that period (i.e., he was doing a lot of work setting up his bid for the Presidency)--most of his income was related to investments. Second, the President doesn't mention salient facts, such as the average income tax burden is more like 9.3% vs. Romney's 15%.
Obama and his fellow myopic progressives seeking to demagogue the issue of millionaire taxes fail to explain why, for instance, investment tax policy affects economic growth. The economically successful can cash out at any time and live out the rest of their lives, say, on safe bond interest alone. Knowing the high failure rate among new businesses and/or other risks (competitor, industry or general economic) and inflation risk, why invest? Tax policy doesn't treat losses the same as gains. When you have gains, the government wants ALL your tax then and there (net of any carryover), but you can only deduct up to a net loss of $3000 in any one year. Investing, to put it in words Obama can understand, is the free market's way of "spreading the wealth around"; if and when business succeeds and grows, it's not just the investor that profits, but workers and the government as well (employee and business tax receipts, etc.) A low, consistent investment tax policy encourages private sector investment, and the government earns more revenue in the long run. Obama's ideologically driven investment tax policies, scapegoating the economically successful, is shameless counterproductive demagoguery. Even if the proposal is likely dead on arrival in Congress, it raises uncertainty over current or future projects and expansion decisions.
Santorum, Dennis Miller and
the Political Significance of Bestiality
I subscribe to the (comedian) Dennis Miller Show podcasts and in fact embedded an audio clip of a call-in viewer in yesterday's post. (Miller, a lapsed Catholic, is generally conservative but not a social conservative, e.g., he's pro-abortion choice and gay marriage.) For some reason, Dennis Miller has been particularly obsessed by social conservative Senator Santorum's use of the term 'bestiality' in the same conversation with gay marriage.
Santorum is trying to argue that there is reason for one-man/one-woman relationship as the foundation for family over the centuries; the point is, and this is what Miller isn't focusing on, that the law of unintended consequences accompanies radical social engineering. Keep in mind homosexuality, polygamy, bestiality, adult-child relationships, etc. are not new concepts. The constraints on entities and relationships within the ideal of marriage and family are not arbitrary but reflect functional, evolutionary considerations in society's stability and self-preservation. Some individual characteristics are arbitrary in nature (e.g., race, ethnicity, religion, height, weight, or (adult) age). However, gender is not an arbitrary consideration to procreation, which is tied to the future of society.
Miller seems to think that Santorum is attempting to equate nontraditional relationships; no, I think that Santorum was simply fleshing out examples of relationships not fitting the ideal and making a slippery slope reductio ad absurdum argument.
Personally, I think society should continue to embrace the traditional definition of marriage but I am reluctant for the state to intervene in the cases of nontraditional relationships (e.g., gay and polygamy) where there is competent consent.
Political Humor
"A new website just came out that’s designed to calculate how long it takes Mitt Romney to earn your salary. So from now on, whenever Mitt Romney is running late, he can call there and say, 'I'll be there in five teachers.'" - Conan O'Brien
[In other news, a new website just came out which estimates how long it takes for Barack Obama to spend your annual salary. The federal government spends about $6.85M per minute; you know what that means: even a one-percenter can't afford a 10-second ad.]
"House Minority Leader Nancy Pelosi says she has dirt on Newt Gingrich, but so far she's keeping her lips sealed — because that's how the last surgeon left them." - Conan O'Brien
[Well, that's because the mud has dried since their last election together...]
Musical Interlude: My Favorite Groups
Queen, "Somebody to Love"
