Vail Daily letter: The larger problem
Vail, CO, Colorado
As a fan of facts, I feel the need to respond to Kay Caspersen’s April 19 letter on the “Buffett rule” (“Well, pay that tax then”). In her brief statement, Ms. Caspersen appears to have the pertinent facts simply wrong.
Mr. Buffett does not, in fact, owe “over a billion dollars in back taxes.” His company, Berkshire Hathaway, is the entity that owes the taxes and they are working to settle the issue with the government.
It may seem like an unimportant distinction or that I’m splitting hairs, but the whole point of the proposed Buffett rule is to ensure that wealthy individuals aren’t paying a lower rate than folks who make considerably less – the famous example of this being that Mr. Buffett paid a lower income tax rate than his secretary.
The fact that his company is playing fast and loose with the tax code speaks to the much larger issue of our desperate need for corporate tax reform. Corporate tax reform is likely an issue that both liberal elitists and the tea partiers can agree on.
Our going rate for corporate taxes is around 35 percent, among the highest in the industrialized world. The catch is that we have so many loopholes in the code, no company who can afford to hire a good tax specialist will ever actually pay that rate.
Trying to finesse its way through one of these loopholes is likely the reason Berkshire Hathaway is caught up with tax problems. If we eliminate loopholes, we could drastically lower the rate to be globally competitive and increase tax revenues.
Contrary to what Ms. Caspersen seems to think, the rules do apply to everyone. Unfortunately, we have some lousy rules and our corporate tax structure certainly falls into that category.
To imply, however, that because the company’s boss feels he ought to pay more taxes is a reason for the company to pay more taxes is misguided. It would be akin to managing an American League baseball team and making your pitcher hit because you happen to disagree with the designated hitter rule. In other words, foolish.
The broader point is that if we want a change we’re going to have to change the rules. The Buffett rule is an attempt to do just that and not the liberal elitists trying to make rules that everyone should live by except themselves.
Jeff P. Miller