March 24, 2004

A Billion Reasons to Raise Your Taxes

Thomas E. Nugent on the reasons why some very wealthy people favor raising taxes:

Did you ever wonder why George Soros (the billionaire who is doing all he can to defeat George Bush), Warren Buffett (the billionaire from Omaha who continues to argue for the repeal of tax cuts), John Kerry (the candidate for president who married into the billion-dollar Heinz fortune), and innumerable wealthy Hollywood celebrities all support the Democratic party - hook, line, and sinker? It doesn't seem to make sense. Why would these patricians favor the party that wants to increase tax rates (as Kerry would do by repealing the Bush tax cuts)? Here's one explanation.

They may act like philanthropists, but in actuality these Democrats are fat cats who can either avoid taxes entirely or pay just a minimal amount. They surely don't pay their fair share relative to their wealth. These megabuck corporate elites take minimal salaries and then benefit from tax-sheltered windfalls when their company stock prices go up. In addition they create huge foundations that provide tax deductions which can offset much of their taxable income. Ongoing contributions to these foundations can materially reduce income taxes for an indefinite period of time. So the guys at the top - whether they are billionaires by inheritance, luck, or hard work - have amassed enormous fortunes that grow, and at the same time they use their assets to keep their income taxes low. Legions of tax accountants and lawyers make sure they take advantage of every tax loophole.