Envy: tax the rich?

Warren Buffett stirred the pot at the NYT and some drank the cool-aid. Warren Buffett’s NYT Op Ed on Coddling Super-Rich says

There’s no heavy handed political rhetoric, there aren’t pitchforks, no emotional outbursts – just a level headed argument, backed with a lot of information, for something that makes perfect sense.

It only makes “perfect sense” if you don’t look past the surface. Mark Perry takes a bit more objective view by noting that Average Federal Income Tax Rates By Income Group Are Highly Progressive, Not Regressive.

What gives?

One factor is the social security taxes, which are only assessed for incomes up to $107,000 but intended to ‘earn’ a benefit after retirement. That benefit is tilted in favor of the lower income earners.

Another factor is the Buffett’s income in not just salary. Much of it is via ownership of corporate equities and the dividends they produce. In the U.S., dividends are taxed at both corporate and at individual levels resulting in something like a 50% tax rate overall. A rundown on how this works is at Forbes.

The worst sort of political rhetoric isn’t the heavy handed, emotional stuff. It is the deceitful and dishonest stuff provided under false colors. The false colors in this case is an appeal to authority where Buffett is the authority who is saying ‘trust me’ regardless of how nonsensical I may sound if you apply critical listening skills that include a smidgen of skepticism and know a little bit about the subject.

This topic taps into envy and greed: envy of those who have more and greed to get something for nothing. That emotional basis makes intellectual integrity a tough slog.

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