The Apparently Contradictory Buffett

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As Warren Buffett has become more public with his political views, he has been the target of an increasing number of attacks. Some of the arguments against Buffett's proposals are intelligent, but these don't appear to be the ones that get the most airtime. Instead, the most common response from those who oppose Buffett's minimum tax on the wealthy argues that Buffett is a hypocrite for saying one thing, but behaving in an apparently contradictory matter. The argument goes something like this:

"If Buffett thinks taxes should be higher, why doesn't he just pay more and leave the rest of us alone?"

But are Buffett's actions really contradictory/hypocritical? Absolutely not. We are all entitled, both legally and morally, to enjoy the benefits of the rules that govern us. The onus is not on the generous to pay for society's needs, it's on all of us.

Let me illustrate with an example. If the government started considering yet another subsidy for certain industries, I would almost undoubtedly be against it. But if one of these "favoured industries" was financial blogging, I would have no qualms about claiming the benefit for myself. (Stay calm, readers; since blogging requires no physical manufacturing or the production of goods for export, such a measure is unlikely to pass in the current political climate.)

Or, to borrow examples from the comments section on the great site csinvesting, an American League team may not agree with the DH rule, but to harm only itself by not taking advantage of it would be foolish. Or, you may think a tax on gas prices is a good way to combat some of the negative externalities of burning oil and funding dictatorial governments, but does that mean you are a hypocrite if you don't pay extra every time you fill up?

You may not agree with Buffett's philosophy on taxes or even on this particular tax (a minimum rate payable by those making $1 million+), but surely readers of this blog don't buy into this particular counter-argument...or do you? What are your thoughts on this matter?

Disclosure: Author has taken advantage of a social program in the past, even though he supports changes to that program that would have reduced or eliminated his benefit.

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About the Author

Saj Karsan founded an investment and research firm that is based on the principles of value investing. He has an MBA from the Richard Ivey School of Business, has completed all three CFA exams, and has an engineering degree from McGill University.

Visit http://barelkarsan.com.

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