San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Monday, May 2, 2016

Bill And Warren Are Economic Idiots

According to this website:  "Bill Gates said investment gains should be taxed at the same level as ordinary income — a bold call for one of the world's largest investors.  Speaking Monday on CNBC's 'Squawk box,'  Gates said that he's 'pleased' that there is more discussion around changing the tax code. When asked what he would alter, Gates sided with his pal Warren Buffet and said he supports raising the earned income tax credit.  But Gates also said he would raise the tax rate for capital gains — the largest source of income for the richest Americans. The current top tax rate on capital gains is 20 percent (with the highest earners paying an additional 3.8 percent surtax). The top tax rate on ordinary income is 39.6 percent.  'There's always been the question of whether taxes on capital should be a lot lower than taxes on labor,' Gates said. 'I tend to think they should be pretty much the same, and that that's an opportunity to be a bit more progressive.'  When asked in the interview whether 'the same' translated into lowering ordinary income rates or raising capital gains taxes, Gates said he preferred raising capital gains taxes.  'Well, you have to fund government,' he said. 'And particularly given the promises that the government's made about medical costs and retirement costs, unfortunately the one that makes the numbers add up is to move the lower tax up higher, although people don't like that. Eventually, the math really matters — otherwise you get into a Puerto Rico-type situation.'"
Bill's buddy Warren has gone on record numerous times in support of a confiscatory death tax that would essentially wipe out every rich man's estate and not allow parents to pass anything on to their heirs.  According to this website, "Warren Buffett isn't limiting his call for higher taxes to a minimum rate for very rich Americans who get a large chunk of their income from investments. He's also one of several dozen wealthy people who have signed a statement calling for a 'strong tax on the largest estates.' It's been released by a group called 'United For a Fair Economy.  Among the other signatories: Buffett's friend Bill Gates, former president Jimmy Carter, investor George Soros, and former Treasury Secretary Robert Rubin.  Noting that they have 'benefited significantly' by government investments in schools, infrastructure. and public safety, among other things, the signer say it is 'right morally and economically' to have a 'significant' tax on large estates because it 'promotes democracy by slowing the concentration of wealth and power.'"  With all due respect to two men who have accomplished great things, served millions of satisfied customers and generally made the world a better place to live, it is nevertheless the case that Bill and Warren are economic idiots.   Allow me to explain.
Let us establish one principle at the outset of this discussion.  According to the God of the Bible, any tax on an increase in wealth or income that is in excess of 10% is immoral.  That makes the tax systems of every country in the world immoral.  I realize that nobody gives a hoot about God's opinion on this matter, although they will definitely rue the day of judgment when God upholds His previously revealed standard, but it must still be pointed out that if the combined taxation in any country exceeds 10% of the annual income of the citizens of that land the tax is, by definition, immoral.  Those who promote tax schedules in excess of 10% will be held morally accountable for that sin.
I cannot disagree with Bill when he says that the rate of taxation on capital gains and ordinary income should be the same.  Both are examples of an annual increase in income and should therefore be taxed in the year that they are earned or realized.  Playing around with the capital gains tax rate is always a political game and has little to do with economic reality.  The problem is not that the capital gains tax rate and the ordinary income tax rate differ, the problem is that they are both way too high.
Ultimately Bill advocates for a higher rate of taxation in order to fund the government.  This is where he betrays his statist attitude, despite the fact he continually battled the onerous and regulatory state while he was CEO of Microsoft.  How ironic that the man who once relished defeating career politicians and bureaucrats in the civil courts would now, after he is retired, proclaim his allegiance to the ever growing beast of  civil government.  Oddly, Bill recognizes that the problem of insufficient government revenues stems from the overreaching promises made by the state in regards to health care and cradle to grave transfer payments but when it comes time to deal with that problem he sees raising revenues as the only solution.  Apparently cutting spending is not on the table.  How blind this man has become.
Warren's claim that it is immoral for rich people to pass their wealth on to their heirs is absurd and also clearly illustrates a love for the state that goes far beyond the duty to pay one's taxes.  Warren long ago announced that his kids were going to be cut off from the great majority of his multi-billion dollar estate.  Now, like many tyrants before him, he wishes to use the coercive power of the state to force his fellow billionaires to do the same thing, whether they want to or not.  Warren is free to give his entire estate to the Treasury of the Socialist Democracy of Amerika if he wishes to do so but the moment he calls for laws forcing others to do so he becomes a tyrant, a socialist and a downright evil person.  Warren, despite making millions of dollars for millions of people, now wants the government to steal significant amounts of that money from the people he has personally made rich.  What a bizarre situation it all is.  I wonder how many shareholders in Berkshire Hathaway agree with his position on taxes?
Warren's justification for raising taxes is his belief that all citizens of the SDA have benefited from government schools, public highways and the police departments that tyrannize this land. It has been a long time since Warren went to government school, if he ever did.  Government schools are not a benefit for the citizens of this immoral land.  They are little more than places where parents pay, via taxation, for socialists to babysit and brainwash their children most of the day.  Graduates of the government school system come out committed to socialism and the principle of state worship.  We have to go no further than the fact that so many recent graduates of government schools love Bernie to prove this point.  As far as the provision of highways and "public safety" are concerned, I bet you every last dollar that I have that if Warren was able to quantify the value of government provided highways and police departments and then roll those entities into a public stock offering there is no way in the universe he would ever buy a share of that company.  Government inefficiencies are so endemic in everything government touches, as Warren routinely states, that no person in his right mind would ever invest in a government operated enterprise.  To claim that the citizens of this land need to pay even more in taxes as an act of appreciation to the state for all it has provide for us is disingenuous at best.  Indeed, the claims made by both Bill and Warren indicate a significant disconnect from the real world that borders on economic and political schizophrenia.  I guess when you are worth hundreds of billions of dollars the thought of giving up a couple hundred billion to the government is not nearly so bothersome as when you are worth $100k and the government comes calling for half of that. 

No comments:

Post a Comment