By now, most people have heard that Warren Buffett wants to pay more taxes.
He’s hardly the first rich person to express that opinion, but for some reason, his New York Times op-ed last month made everybody real excited.
Buffett and many other super-rich individuals in the United States and Europe feel like they are taxed less than they can afford. Obviously, that’s true.
But that doesn’t mean they should be taxed more, shout the critics. Some of Buffett’s super-rich friends want all their money.
Which leads inevitably into an argument over rights. This country was founded on a right to representation. We all believe in the “pursuit of happiness,” whatever that means. And today, some people seem to think that there’s a right to riches.
Which means a right to stop the government from taxing. In politics, some people talk unhelpfully as though we shouldn’t have taxes at all, ignoring the fact that we live in a world that is largely provided by government. We’re protected by policemen, treated in hospitals, and transported on roads. We owe money for these things.
The tricky part comes in deciding how to split the bill.
There are basically two ways to look at taxation. The first way asks how much a person can afford to pay. The second way asks how much that person deserves to keep. In the minds of most people, these two questions rarely lead to the same tax rate.
The question of “afford” was resolved by statisticians long ago. We have the cost-of-living index, various money-to-happiness scales, and decades of figures on wages and health.
But the question of “deserve” is much trickier, being almost exclusively ideological.
Warren Buffett and Bill Gates make great examples. Buffett doesn’t build things, doesn’t service things, and he’s never had a grand invention. He makes money with money, in a complicated game he’s very good at. Without our modern government and financial system, he simply could not do it.
Gates, on the other hand, had an idea that changed the world. In all honesty, that contribution was probably worth billions. Maybe even more billions than he’s made. But without government protection, the idea would not have been his for long.
The world’s other “mega-rich,” as Buffett calls them, come from a variety of backgrounds. Media empires, natural resource monopolies, huge inheritances. Some even run companies. But if there’s one secret along every path to riches, it’s opportunity.
The world’s richest people are those that, at some point, caught a break in regulation, technology or economic condition, and ran with it. Many of those opportunities were created, or at least protected, by government.
Billionaires, as they exist today, are a relatively new phenomenon. When the Constitution was drafted, people with that kind of money were called “kings.”
But today, there are over 1,000 individuals with a billion dollars or more — 400 in the U.S. alone. Meanwhile, the number of American families living below the poverty line has reached an all-time high.
Times are tough most places, but not all over.
Buffett raises a good question: Should they be?
Reach John at john.a.gaylord@asu.edu Click here to subscribe to the daily State Press newsletter.
