Let's Just Tax The Liberals

Warren Buffett gets it wrong...

Warren E. Buffett was his usual folksy self Tuesday night at a fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a system that allows the very rich to pay taxes at a lower rate than the middle class.

Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

Buffett said that was despite the fact that he was not trying to avoid paying higher taxes. "I don't have a tax shelter," he said. And he challenged Congress and his audience to see what the people who "clean our offices" are taxed, to loud applause.

A populist tone permeated the 70-minute talk with the billionaire investor and philanthropist in Manhattan on Tuesday night. The talk, given to about 600 Wall Street bankers and money managers, raised at least $1 million for Clinton's presidential campaign, the Associated Press reported.

The event comes as public frustration has grown over executive compensation and disparity in pay. It also comes as Congress debates changes to the tax code that would decrease take-home pay for managers of private-equity firms and hedge funds, pools of money for wealthy families and institutional investors. The rich can take advantage of tax loopholes, including one that allows those managers to pay the capital gains tax rate of 15 percent instead of the ordinary top income tax rate of 35 percent.

Only in America do we describe something that is intended to be in the law a loophole. Carried interest charges are not taxed at the capital gains rate because of a loophole -- the law specifically treats such charges as capital gains, and there are legitimate policy reasons for doing so. That isn't to say the policy is right or wrong, but it's not a "loophole." Good balanced reporting by the Post.

Meanwhile, Buffet doesn't get the real problem. The issue shouldn't be that Buffet pays a lower tax rate than his secretary -- it's that anyone, including his secretary pays 30% of their income over to the federal government. Or as Instapundit noted, most of us would rather have Buffet's tax rate than he have ours.