Warren Buffett’s Hidden Agenda on Taxes
Nobody has pointed out the obvious fact about Warren Buffett’s op-ed in the NY Times yesterday. His glaring conflict of interest.
First off, kudos to Buffett for writing an op-ed piece about something that he has repeated every year for the past 10 or so years. It took a profile in courage. As most people probably know (but I will remind them) Buffett is crying because he paid too little taxes (a paltry 17%) compared to his secretary who pays 28% plus state, city, whatever.
Buffett then defends against the typical argument against raising taxes: that people will no longer invest. He thinks this is BS and I agree with him. He said that even when taxes were 39% he did not know anyone who was avoiding investing just because taxes were so high.
I have a couple of problems with Buffett’s argument:
A) Relative to Buffett, I am a very poor man. I don’t like the idea of the richest man in the world telling me I need to pay more taxes. But that’s just personal and neither here nor there.
B) If Buffett really wanted to pay the same tax rate as his secretary he could simply write a check to the government making up the difference. I don’t see him doing that. At least he hasn’t announced he’s doing that. He absolutely should do that, given the style by which he is constantly making this argument.
C) This is the most important: you always have to look at the real agendas of people. Whenever someone takes a stance I always ask: “what is the good reason and what is the real reason”. When my daughter wanted to take French classes instead of classes in a more useful language (Spanish, Chinese, etc) she gave some very good reasons. But the real reason is that her friends were taking the French class.
So what are Buffett’s real reasons here.
It’s not that investors are less likely to buy when there are higher taxes, its thats they are less likely to SELL. Warren Buffett has $50 billion in the stock market. It’s very very hard for him to sell even when he wants to. When he sells he not only moves the stock but people get afraid (“Warren Buffett is selling!!”) and they start selling also, making it harder for Buffett to sell. Also, when there is bad news on a stock Buffett owns, the retail investor has a much easier time getting out of a bad position than Buffett does. In other words, the one advantage the retail investor has over Buffett is that they are more nimble.
And Buffett hates that.
He hates when someone has an advantage over him.
So let’s penalize them. Let’s raise the capital gains to 40%. Let’s raise it as high as possible. “The rich should pay more taxes!” That’s what Buffett is saying on the surface. But underneath, what he’s really saying is: “lets penalize people for having one single advantage over me in my investing.”
I wrote a book on Buffett a few years ago. “Trade Like Warren Buffett’. In my post Why I write books even though I’ve lost money On Every Book I’ve Written I describe the advance and the sales on that book. I am totally open. I have no hidden agenda. Or try very hard not to. (If i have one ever , please feel free to point it out).
I’ve spent a lot of time studying Buffett’s hidden agendas. I wish he would be more open about what he’s really feeling on a topic. I don’t look into his pocket. I wish he would stop looking into mine. p looking into mine.
- How to Self-Publish a Bestseller: Publishing 3.0
- 7 Things Happen to You When You Are Completely Honest
- How to Deal With Crappy People
- 10 More Reasons You Need to Quit Your Job Right Now!
- The 100 Rules for Being an Entrepreneur
- 33 Unusual Tips to Being a Better Writer
- How to be THE LUCKIEST GUY ON THE PLANET in 4 Easy Steps
- 10 Unusual Things I Didn’t Know About Steve Jobs
- 8 Alternatives to College
- I’m Completely Humiliated by Yoga
- How I Screwed Yasser Arafat out of $ 2mm (and lost $ 100mm in the process)
- Who Is In Your Scene?
- Ep. 65: Dan Ariely: Dishonesty, Irrationality, and Money
- Ep 64 – Tucker Max: Surprise Announcement! Part 1
- 10 Things I Learned While Interviewing Tony Robbins About His New Book “Money”
- Ep. 62 – Tony Robbins: Money Is Just A Game
- Ep. 61 – Trip Adler: Overnight Success 7 Years in the Making
- Nothing Is Wrong With You
- Ep. 59 – Brian Koppelman Ruined My Life
- 21 or 22 Yet Even More Amazing Tips to Be a Better Writer
- Ep. 54 – Gabriel Weinberg: The Man Who is Fighting Google
- The Idea Matrix – What Changed Everyone’s Life After “Choose Yourself”
- Life is Like a Game. Here’s How You Master ANY Game
- Step By Step Guide to Make $10 Million And Then Totally Blow It
- Can You Do One Page a Day?
- The Secrets of Personal Finance
- 10 Things You Need to Know To Become a Great Leader