Policy

Stop Coddling Warren Buffett

The billionaire investor should put his money where his mouth is.

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The CEO of Berkshire Hathaway, Warren Buffett, who is one of the richest men in America, does so many interviews as part of his campaign to raise taxes on his competitors that it's hard to keep track of them all.

Just last week, for example, he talked to the Fox Business Network, The New York Times, Bloomberg News, and Charlie Rose. All, basically, to push a tax increase that Mr. Buffett has been flogging since at least 2007, and which he has been advancing this year since his August 15 New York Times op-ed piece that appeared under the headline "Stop Coddling the Super-Rich."

Even old stories, though, sometimes have new developments. The one here comes thanks to Bloomberg Television's Betty Liu, who pressed Mr. Buffett not once but twice on a question that has occurred to a lot of people: If Mr. Buffett thinks he should be paying more in taxes, why doesn't he just write a check to the federal government?

First she phrased her question as a repetition of a challenge to Mr. Buffett by CNN founder Ted Turner. She asked, "If you want to do that, why not just write a check to the government?"

He replied, "If something is good policy, it should be enacted as policy."

Then Ms. Liu followed up: "But Warren, have you ever thought, being that you are a large proponent of this, why not, why not I write a check to the government, for you know, several billion dollars, just to prove that I can, or to underscore a point?"

Mr. Buffett replied, "I would say this, if there would be a group of ultra-rich people, you know, your boss Mike Bloomberg, Dow Jones's boss Rupert Murdoch, if they want to take that on as a program, I'll join with them."

Great. So Mr. Buffett, put on the spot, has volunteered as a follower to write a check to the government for "several billion dollars" — but only if at least some of his peers do the same thing.

The comparison to Mr. Buffett's behavior when it comes to charitable giving is instructive. There, too, Mr. Buffett did not make the first leap. First Bill and Melinda Gates pledged their fortune to their foundation; only later did Mr. Buffett add his.  And then Mr. Buffett promptly set out on a "giving pledge" campaign to make sure that his peers promised to give away their money, too.

When it comes to writing an extra check to the government, though, Mr. Buffett is, like the president whose campaign he has been fundraising for, leading from behind. Why doesn't Mr. Buffett go around soliciting donations for the government the way he does for his "giving pledge"? The reason may be that he doesn't want the contributions to be voluntary. Only the government, not some optional or choice-based campaign, has the power to force his competitors in business and in wealth accumulation to contribute alongside him, so that his position relative to them won't be worsened.

In invoking Mr. Bloomberg and Mr. Murdoch, Mr. Buffett also broadened his list of potential targets. In the same Bloomberg interview, he had said that his proposed tax would not apply to CEOs or professional athletes, but that it would hit, "People who make money with money only…. People who shuffle money around all day." Neither Mr. Murdoch nor Mr. Bloomberg fits that description, one with an ugly history in keeping with what has been called "The Long Shadow of Usury."

Ms. Liu deserves some credit for being a rare interviewer of Mr. Buffett who, rather than simply fawning, challenges him. Other journalists sought out by Mr. Buffett would do their profession and the country a favor by following suit. Some possible follow-ups for next time: "What's your justification for making your tax apply only to "people who shuffle money around all day" but not to athletes or CEOs? Would it apply to CEOs of banks, insurance companies, or other publicly traded financial firms? Are there any other precedents for taxing income differentially by occupation rather than by source? Is that something we want to encourage in the tax code? Wouldn't it just make things more complex?

And, Mr. Buffett, if you feel undertaxed, why don't you lead the effort to get a group of "ultra-rich" to write voluntary multi-billion-dollar checks to the government, rather than waiting for others to do it first? And if you feel undertaxed, why focus your tax increase on your taxable income, which is relatively small, as opposed to on your unrealized capital gains or the assets of your (and the Gates's) charitable foundation, which are relatively large?

Stop coddling the super-rich, sure. But the place for the "coddling" of Mr. Buffett to stop isn't the tax code, but the press corps. Ms. Liu's questions were a good start, but there's plenty of room for more.

Ira Stoll is editor of FutureOfCapitalism.com and author of Samuel Adams: A Life.