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by Eric Englund
Two of America’s highest-profile advocates of wealth redistribution
are Barack
Obama and Warren Buffett. Presently, President-elect Obama
is pushing
to redistribute $50 billion to Detroit’s three failing automakers.
He is particularly concerned about the possibility that GM
may file for bankruptcy in a few months. As for Warren Buffett,
you may not be aware that he is a strong proponent of the
income tax, the estate tax, and double-taxation on dividends
(for more on this matter, read this Forbes article: Warren
Buffett’s Tax Fetish). With these two gentlemen being
kindred spirits, perhaps Mr. Obama should "invite"
Mr. Buffett to "give a little more" as alluded to
in Berkshire Hathaway’s 2003 annual report (more below). Berkshire
Hathaway, after all, has a lot of money and General Motors
needs a good sum of it. So why not have the Obama White House
broker a deal – under threat of sending Buffett to jail –
to merge General Motors into Berkshire Hathaway? What is good
for GM, as the saying goes, is good for the country…and Barack
Obama will see to that.
It would be a smashing idea for President-elect Obama to
read Warren Buffett’s 2003 letter
to shareholders. In this letter, Buffett takes umbrage
to the allegation that he and his company are tax avoiders.
Hence, Mr. Buffett brags about the fact that Berkshire Hathaway’s
2002 tax return was 8,905 pages long and that Berkshire is
amongst the top-ten taxpaying entities in the United States.
He goes on to state that Berkshire Hathaway "…was surely
pulling its share of our country’s fiscal load" and that
if outsiders see otherwise then "…that means Charlie
and I need to try harder" and "…we are ready to
do so."
The following excerpt was penned by Mr. Buffett, in the aforementioned
letter to shareholders; and will surely warm the heart of
his fellow redistributionist Barack Obama:
On May 20, 2003, the Washington Post ran an op-ed
piece by me that was critical of the Bush tax proposals.
Thirteen days later, Pamela Olson, Assistant Secretary for
Tax Policy at the U.S. Treasury, delivered a speech about
the new tax legislation saying, "That means a certain
Midwestern oracle, who, it must be noted, has played the
tax code like a fiddle, is still safe retaining all his
earnings." I think she was talking about me.
Alas, my "fiddle playing" will not get me to
Carnegie Hall – or even to a high school recital. Berkshire,
on your behalf and mine, will send the Treasury $3.3 billion
for tax on its 2003 income, a sum equaling 2½% of the total
income tax paid by all U.S. corporations in fiscal 2003.
(In contrast, Berkshire’s market valuation is about 1% of
the value of all American corporations.) Our payment will
almost certainly place us among our country’s top ten taxpayers.
Indeed, if only 540 taxpayers paid the amount Berkshire
will pay, no other individual or corporation would have
to pay anything to Uncle Sam. That’s right: 290 million
Americans and all other businesses would not have to pay
a dime in income, social security, excise or estate taxes
to the federal government. (Here’s the math: Federal tax
receipts, including social security receipts, in fiscal
2003 totaled $1.782 trillion and 540 "Berkshires,"
each paying $3.3 billion, would deliver the same $1.782
trillion.)
Our federal tax return for 2002 (2003 is not finalized),
when we paid $1.75 billion, covered a mere 8,905 pages.
As is required, we dutifully filed two copies of this return,
creating a pile of paper seven feet tall. At World Headquarters,
our small band of 15.8, though exhausted, momentarily flushed
with pride: Berkshire, we felt, was surely pulling its share
of our country’s fiscal load.
But Ms. Olson sees things otherwise. And if that means
Charlie and I need to try harder, we are ready to do so.
I do wish, however, that Ms. Olson would give me some credit
for the progress I’ve already made. In 1944, I filed my
first 1040, reporting my income as a thirteen-year-old newspaper
carrier. The return covered three pages. After I claimed
the appropriate business deductions, such as $35 for a bicycle,
my tax bill was $7. I sent my check to the Treasury and
it – without comment – promptly cashed it. We lived in peace.
All of us, indeed, may live in peace as long as we pay our
taxes. If you don’t pay your taxes, well, then an expensive
fight with the IRS and jail time may be in your future.
To be sure, I adhere to what Murray Rothbard stated
in his magnificent book The Ethics of Liberty:
If, then, taxation is compulsory, and is therefore indistinguishable
from theft, it follows that the State, which subsists on
taxation, is a vast criminal organization far more formidable
and successful than any "private" Mafia in history.
Furthermore, it should be considered criminal not only according
to the theory of crime and property rights as set forth
in this book, but even according to the common apprehension
of mankind, which always considers theft to be a crime.
Plain and simple, taxation is theft. Therefore, Barack Obama
and Warren Buffett celebrate theft. But here is the rub, Barack
Obama will soon have the full backing of Uncle Sam’s police
state while Buffett sits atop of Berkshire Hathaway’s $120
billion net worth (as of September 30, 2008). If our 401(k)s
and our IRAs are now fair
targets for the redistributionists, in addition to our
incomes, then why not Berkshire Hathaway’s war-chest of a
balance sheet?
So here is the deal President Obama should offer Warren Buffett:
Merge Berkshire Hathaway with General Motors in order to save
hundreds of thousands of jobs and in order to assure that
tens-of-billions of dollars of GM’s pension and retirement
benefits continue to be honored. (Keep in mind that even after
such a merger, Berkshire Hathaway will still have a net worth
of approximately $60 billion and will remain one of the strongest
companies in America – GM’s net worth is presently close to
negative
$60 billion; so doing the math is pretty easy). Conversely,
if Mr. Buffett doesn’t accept the "offer," then
the Federal government will simply take over Berkshire Hathaway,
merge it with GM, while sending Buffett to prison – without
trial – as a suspected terrorist. Gotta love the Patriot Act.
Buffett, to be sure, will take the deal so that he may continue
to live in peace with his master. After all, it is difficult
to say "no" to a nuclear-armed Commander-in-Thief.
And then the unwashed masses shall celebrate a highly successful
redistribution at the expense of an ultra-wealthy man instead
of at the expense of an abstraction Buffett and Obama call
"the taxpayers." My guess is that Warren Buffett
won’t attend this celebration as he was given a raw deal that
he couldn’t refuse. At this point maybe Buffett’s fetish,
for redistributionist theft, will be cured.
Load the shotgun; I hear wedding bells for Microsoft and
Ford.
November
18, 2008
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