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Politics

Barack Obama and Warren Buffett: Hypocrisy on Parade

April 10, 2012 - 6:00pm

Who's the bigger hypocrite?

  • Barack Obama, who schmoozes the wealthy for campaign contributions while waging a phony class war against "millionaires and billionaires."
  • Warren Buffett, who publicly complains that his secretary pays a higher tax rate than he does while his company privately battles the IRS over $1 billion in unpaid taxes.

The disingenuousness of both men was on display Tuesday as the president pitched the "Buffett Rule" at Florida Atlantic University. Whipping up a crowd of students -- few of whom could tell the difference between earned and passive income -- Obama touted the populist mythology that the "rich" aren't paying their "fair share."

The president's remarks were billed as a "policy" speech, enabling him to bill taxpayers for his fundraising trip to South Florida. Wink, wink. This was raw politics for the masses and the media.

Before and after the FAU event, Obama was busy glad-handing behind closed doors, scooping up checks from Democratic Party donors. Odds are these fat cats were either feeling guilty about their financial position, or simply gullible, like the cheering college throng. Or both.

For public consumption, Obama preaches the Buffett Rule, which argues thatnohouseholdmakingmore than $1 million annually should pay a smaller share of theirincomeintaxesthanmiddle?classfamiliespay.

This blurs the crucial distinction between earned income and passive income, which has already been taxed. Buffett knows the difference, as he receives copious income from dividends and other investments. And he's free to write a check to the IRS if he wants to pay more. Of course, he doesn't.

The Buffett Rule's prescription for a 30 percent tax is political pablum. The top 1 percent of taxpayers -- with incomes exceeding $344,000 -- already pay an average of 30 percent in federal taxes, according to the Congressional Budget Office.

The White House argues that the wealthiest 1?in?1,000 taxpayers pay barely a quarter of their income in federal income and payroll taxes -- half of what they would have contributed in 1960.

Yet the top 5 percent of earners pay more than 70 percent of the taxes today, while 47 percent of Americans pay no income tax at all. Where's the "fairness" in that?

While Obama's fixation on the wealthy appears to play well with college crowds and the chattering class, it's risky business with the rest of the country.

A poll by the moderate Democratic group Third Way reported Monday that 80 percent of independent voters prefer a candidate who focuses on creating economic opportunity rather than reducing "income inequality."

Another survey published by The Hill found just 4 percent of respondents agreed with Obama that it would be fair to take 40 percent of income from the better off.

Indeed, how can a redistributionist crusade that raises taxes on small-business owners (i.e., job creators) lower unemployment and kick-start the economy? Answer: It can't, and never has.

As the Democratic-controlled Senate prepares for a vote on the Buffett Rule next week, it's worth noting that Buffett's company, Berkshire Hathaway, remains locked in a dispute with the IRS.

The eighth-largest public company in the world, according to Forbes, admits to still owing $1 billion in taxes dating back to 2002. The firm says it expects to "resolve all adjustments proposed by the Internal Revenue Service" sometime this year. Maybe even by Election Day.

Meantime, maybe Buffett could give his poor secretary a raise while he's at it.

Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.

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