I’ve been thinking about Warren Buffett lately. He’s on record saying that he should be paying a larger percentage of his income as taxes. Aside from the fact that for people who really believe they aren’t paying enough there’s already a place to send that check to, the reaction to his comments is very interesting. Political expediency rules the day, or, as an economist might look at it, naivety.
Let’s step back a moment for a glance at some facts. Fact 1, Warren Buffett clearly has business genius to a very rare degree. Fact 2, he endorsed Barack Obama and made campaign contributions to him for the 2008 election. Fact 3, he knows that his words carry great financial value—just ask for a free copy of his report. It’s unlikely that this tax is going to go through, so essentially Warren Buffett is gambling. If the tax passes, well, he loses, although it’s not that big of a deal to him. He already has more money than he can spend, and has already announced he’s not passing on his massive fortune to his children. If the tax does not pass, he gave politically valuable support to Obama at essentially no cost to himself—a non-monetary campaign contribution.
What nobody seems to have said so far (unless I missed it) is that there’s no way he doesn’t think Obama will remember this later.