Friday, August 19, 2011

Lord Black on buffet

warren Buffet is aching to pay more tax. I doubt many of his rich friends are so inclined. Higher tax rates in the United Kingdom, Sweden and other high tax areas has led to the flight of capital and of rich people. My suggestion to my American friends is to revamp their tax code. It is 9 million words long. Lower and flatten tax rates and eliminate loopholes and corporate welfare. On the week end, 60 minutes had a piece on the disastrous effects of the 35% corporate tax in the US. It is one of the highest rates on earth.

He might stand still while the tax-swatter approached, but most of his income peers, in so far as he has any, would not. They would fly away in tax-planning terms, and what we would get is an escalation of the cat-and-mouse game of legislators and tax experts on licit avoidance. And a wealth tax, though it would be more collectible than taxes on large and unconventional incomes, would offend the American ethos of not confiscating, at least until death, the proceeds of the legitimate successes of individual American enterprise. And it would open the gates to terrible abuse, as legislators who are afraid to cut spending, pare entitlements to those who don’t need them, raise the actuarial presumptions about Social Security 67 years after its adoption and after the average life expectancy of participants has risen by over ten years, and other steps that will have to be taken, would resort to tokenistic fiscal persecution of the most affluent. Few living things, animal or vegetable, are more tenacious than a politician clinging to an envisioned panacea to justify the deferral of hard decisions. The country waited for the bust of the stimulus monstrosity, and then for the Simpson-Bowles report to be shelved, and for various futile and demeaning bipartisan jawbonings; if anyone took this Buffettism seriously, it would push things out into the next presidential term.

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