ProPublica, which describes
itself as “an independent, nonprofit newsroom that produces investigative
journalism with moral force”, recently published findings—gleaned from
confidential IRS data it obtained—showing that some billionaires have paid
(relatively) little to no income tax in recent years. The names include Jeff Bezos, the CEO of
Amazon; Tesla CEO Elon Musk; Democrat presidential candidate Michael Bloomberg;
investor and liberal champion George Soros; and the “Oracle of Omaha”, Warren Buffett.
Naturally, this caused an uproar
and the usual call to tax the rich more.
Senator Elizabeth Warren urged Congress to take up her idea of charging
billionaires a tax of 2% annually of their net worth. Indeed, a “millionaires surtax” was proposed
in legislation introduced by a couple of other Democrats shortly thereafter.
Let’s be plain though. None of these men is accused of doing
anything illegal. Yes, their net worth
grew by billions of dollars during the years for which ProPublica reviewed their
tax data. But actual income? That was relatively little; it was mostly
appreciation of the value of their stock holdings that accounted for the
increase, and that is not immediately taxable.
And by using write-offs, deductions, and other legitimate means, actual
income was reduced or offset to the point that taxation was minimal.
Allow me a few thoughts on this….
I was taken aback by the
apparent hypocrisy of some of these
uber-rich folks. Warren Buffett was not
the only one of the group to have said previously that the rich should pay more
taxes. We might rightly question their
sincerity now. But ignoring that, should
we expect them to NOT take advantage of the tax laws to minimize their payouts
to the government? As the famous jurist
Learned Hand wrote in a case back in the 1930’s:
Any one may
so arrange his affairs that his taxes shall be as low as possible; he is not
bound to choose that pattern which will best pay the Treasury; there is not
even a patriotic duty to increase one’s taxes.
So if people are offended by the
avoidance (not the evasion) of taxes by the wealthy, then change the tax laws. And that is what some are aiming to do. But be careful what you ask for. Some of the tax minimization schemes the rich
use are also available to those in the lower income brackets. “Oh, but we’ll make the changes apply only to
those with a net worth over a certain amount.”
Fine, but now you’ve singled out a group of people for worse treatment
than others. That breeds class warfare,
and we have too much of that already.
And the taxation on net worth
(not income) that Senator Warren proposes for the rich? Is that even constitutional? And would you want such a law to apply to you
someday? What if you were taxed on your
net worth: your retirement accounts, your house, your vacation property, your business,
your car, your furniture? Would you have
to liquidate some of your retirement savings or sell property in order to pay
the taxes on it?
I don’t think it’s fair to (and I
know this is a strong word) persecute the rich by making laws specifically to
get more money from them. One
journalist, expressing his outrage over the ProPublica findings, said “there
are not billions of billionaires. Let’s
come up with something for this small group.”
As if the small size of the group (a minority) justifies different
treatment. What about the charitable
giving by this “small group”? It’s in
the billions of dollars. Warren Buffett
has given away more than half his wealth.
Have you done as much, Elizabeth Warren?
And you, indignant journalist…have you created as many jobs for
Americans as Jeff Bezos? While
businesses were closing down and people losing their jobs during the pandemic,
Amazon was hiring tens of thousands of people.
No, I’m not a fan of our national
taxation system. It’s too complex and
probably unfair in some respects. But
will you pick on one group because you don’t like them, think they need to
“give more”, or pay their fair share?
And I haven’t even addressed the fact that ProPublica came by the
information illegally. If the tax
returns of someone who is not part of the wealthy class were scrutinized in the
press, the cries about invasion of privacy would be deafening. But it’s okay to do it to the rich? Who’s the next group to fall out of favor and
lose their rights? Pray it’s not you.
Until next time,
Roger
“Do not pervert justice; do not show partiality to the
poor or favoritism to the great, but judge your neighbor fairly.” Leviticus 19:15 NIV*
“And don’t favor the poor, simply because they are poor.”
Exodus 23:3 CEV
*Scripture quotations taken from the Holy Bible, New
International Version® NIV®
Copyright © 1973, 1978, 1984, 2011 by Biblica, Inc.™
Used by permission.
All rights reserved worldwide.
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