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Friday, January 13, 2012

Burning Money with Warren Buffett

"When you see me reach for the check, you'll know I'm posing." — Warren Buffett
Warren Buffett wants to get into a money burning contest with the Republicans in Congress. You would think that the 2nd richest man in the United States, with a net worth of $39 billion would know something about taxes. He probably does, but he also apparently wants to do some posing while he dares Republicans to donate taxes or burn money with him.

Taxes as we have learned from Modern Monetary Theory (or MMT) are not needed to fund the government. In fact, if you walked into the IRS office and paid you income tax bill in cash they would shred your money in the back room soon after giving you a receipt and crediting your account for the payment.

At first, this is a hard idea to get your brain around. Who for God's sake destroys money? But, the the IRS does not need to send money to the government. The government merely prints new money or more likely just credits accounts when it needs money. The US government does not need the IRS to fund its operations. These are two mutually exclusive operations: creating money and destroying money via taxes.

But, what about the $15 billion dollar federal deficient you ask? Go read up about MMT if you want the answer to that one.

Anyway, the point here is that donating money to the government is a fool's errand. Get it through your head that Uncle Sam does not need your money. The U.S. government taxes mainly to control demand for goods and services and manage the money supply.

So all the people who donate their hard earned money to pay down the Federal deficit are just making work for someone, who has to destroy that money. Of course, if you donate gold Uncle Sam will find a way to keep that.

Rana Foroohar / Swampland:
Warren Buffett Ready to Take Republicans' Tax Challenge  — Warren Buffett is ready to call Republicans' tax bluff. Last fall, Senator Mitch McConnell said that if Buffett were feeling “guilty” about paying too little in taxes, he should “send in a check.” The jab was in response to Buffett’s August 2011 New York Times op-ed, which made hay of the fact that our tax system is so unbalanced, Buffett (worth about $45 billion) pays a lower tax rate than his secretary. Senator John Thune promptly introduced the “Buffett Rule Act,” an option on tax forms that would allow the rich to donate more in taxes to help pay down the national debt. It was, as Buffett told me for this week’s TIME cover story, “a tax policy only a Republican could come up with.” ...

Kid Dynamite:
Warren Buffett’s Bizarre Non-Sequitur Challenge to Republicans -- I thought about it for 5 seconds and realized that Buffett is off on a total non-sequitur here...

See, the Republicans’ point is that they don’t think that the rich should have to bear the brunt of the tax burden more than they already do (look: you can agree or disagree with this philosophy, but I think it’s clear that this IS the Republican philosophy. I have no interest in arguing here whether or not it is the correct policy). In other words, the entire Republican point is “WE don’t want to pay any more in taxes, if you think you aren’t taxed enough, then YOU are free to pay more in taxes.“ Thus, calling out Mitch McConnell like this, while sure to grab headlines, and result in high fives and “OH NO YOU DI’INTS” amongst liberals, makes no sense...

Bruce McQuain / Questions and Observations:
Buffett: bluffs and buffoonery  — What “bluff”? I don’t recall any of the Republicans in question complaining they paid too little in taxes, do you?

Instead it was about Buffet claiming he paid to little in taxes and his further claim that he was willing to pay more. What Republicans then promptly suggested is that he do so and even provided him an address to where he could send his voluntary contribution. They also insisted that taxes were high enough for all and that Buffett should speak for himself.

Now, at least as I see it, he’s trying to wiggle out of it by citing some sort of non-existent bluff which requires payment by Republicans before he is willing to pay.

Man up Warren Buffet … You made the claim and were provided with a solution. This has nothing to do with others paying as well, this is your baby.

Put up or shut up about paying more in taxes. You’ve become more than tiresome.
Daniel Strauss / The Hill:
Warren Buffett: I'll match any Republican donation to pay down the federal debt  — Business mogul Warren Buffet is promising to match any donation Republican members make toward cutting the national deficit.

And he upped the ante when it came to Senate Minority Leader Mitch McConnell (R-Ky.), saying he would match the leader's donations three-to-one.

His pledge comes after McConnell said that if Buffett is feeling guilty about not paying more in taxes, he should just send in a check...
Dear Mr. Buffett,...

You know what the Good Book has to say about charity, right? We can turn to Matthew 6:1

“Beware of practicing your righteousness before other people in order to be seen by them, for then you will have no reward from your Father who is in heaven. Thus, when you give to the needy, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by others. Truly, I say to you, they have received their reward. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. And your Father who sees in secret will reward you.”
Ryan Mac / Forbes: Warren Buffett Throws Down Gauntlet To McConnell, GOP; Challenges Them To Donate

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