Omaha Oracle Fumbles On Taxes

When you tax something, you get less of it. This simplistic theory is Economics 101, which is why it is so very puzzling that the worlds most successful investor, Warren E. Buffett, CEO of Berkshire Hathaway of Omaha, is so out to lunch on taxation. Is he having lunchtime bananas with the monkeys over at Doorly Zoo?

As a fellow Nebraskan, Cornhusker and stock investor, I have long admired Warren Buffett, often employing many of his techniques in my investment philosophy. Like Mr. Buffett, I am a longtime shareholder of The Coca Cola Company (KO:NYSE) and I do own shares of Buffett's Berkshire Hathaway (BRK.B:NYSE). I have always listened carefully to Buffett on market matters, noting his analysis and transactions on the corner of Wall and Broad.

Buffett, now ranking as third among the most wealthy individuals in the world, and unfortunately a big supporter of President Obama, wrote an opinion piece recently in The Wall Street Journal, championing the need for revenues (raising of taxes) and an increase in the level of taxation among the wealthiest Americans. In other words, taking money from successful individuals to give to those who for whatever reason have failed to achieve high levels of income. That is like Nebraska giving a less fortunate Kansas State three touchdowns. Absurd!

Buffett's unyielding support of President Obama, who has destroyed job creation and investment with his high taxation, expansive regulatory control and wealth redistribution policies, is bewildering. PGA golfer Paul Azinger has created more jobs than Obama. But for Buffett to editorialize support for policies that run against sound free market economic theory suggests the best days of Buffett may be behind him.

Buffett claims his secretary pays higher taxes in relative terms than he does. Since Buffett draws the greater majority of his income through stock dividends, this statement is thankfully accurate. Investors Business Daily explains and properly calls Buffett out.

Berkshire Hathaway's stock price has been diving since about the time Buffett editorialized, or when Obama and his policies handed Uncle Sam his first credit downgrade. Given the thought process behind the piece and the economic policies Obama and Buffett are eager to employ, one can certainly understand why. Furthermore, Buffett and Berkshire actually have tax issues to deal with, an incredible irony considering. Where is Timothy Geithner when you need him?

The bottom line is Buffett is far off the mark. Government has been criminally negligent engaging on a spending spree which is set to bankrupt generations. Given that alone, government has demonstrated their inability to efficiently utilize the tax dollars they do receive. For America to emerge out this economic malaise, regulations must be retracted and tax rates need to be lowered, allowing businesses, entrepreneurs and small business to to create, innovate and flourish. This will increase the tax receipts the government receives all the while putting American citizens back to work, restoring pride and dignity to our first class workforce.

At such time, would it be too much to ask for government to discontinue rewarding bad behavior, cease all redistribution of wealth policies and spend our tax dollars wisely? As you may have heard across the fruited plain recently, we are TEA, or taxed enough already.