There’s a lot of talk about making the Evil Rich pay their “fair share” these days. President Obama wants us to be very angry at the spectacle of billionaires escaping from confiscatory tax rates. For some reason, he never uses the very pertinent example of his good friend, top contributor, and Solyndra crony George Kaiser – who, judging by the amount of money we were all compelled to give him, is unquestionably The Most Important Man In America.
It’s too bad Obama never rails against Kaiser, because the well-connected Oklahoma billionaire reported zero taxable income during five years of his rise to the Forbes 400 list of the wealthiest Americans. In another year, he claimed on $11,699 in taxable income, which works out to $5.62 per hour.
Bill Allison of the Sunlight Foundation reports that Kaiser has not exactly been bursting with enthusiasm to pay his “fair share” over the years:
In addition to Solyndra, the George Kaiser Family Foundation has investments worth hundreds of millions in energy firms, most of them in the oil and gas industry. The Washington Post reported that, in 2005, Senate investigators focused on the tax implications of the foundation, whose assets at the end of 2009 had grown to nearly $4 billion. GKFF has averaged more than $194 million a year in income from those assets over the last five years and issued grants that averaged about $53 million a year–or just 1.7 percent of its net assets.
That wasn’t the first time Kaiser caught the attention of government tax officials. In 1997, the Internal Revenue Service sent Kaiser and his companies tax bills for more than $72 million in back taxes, interest and penalties, covering individual and corporate returns filed from 1986 to 1992. Kaiser filed returns showing his personal income averaging negative $860,000 between 1986 and 1991; his holding company, GBK Corp., and its subsidiaries reported an aggregate loss from 1989 to 1992 of $507,000–some years it made money and paid taxes, others it claimed losses and paid none.
As Allison stresses, none of this was illegal. Kaiser was just doing precisely what Obama’s entire re-election campaign is premised on portraying as a moral horror: taking advantage of perfectly legal deductions and loopholes to shelter his immense fortune from taxation.
The IRS challenged some of these techniques, and hit Kaiser with a bill for $24 million in back taxes. He fought them tooth and nail. The government eventually settled for $3.7 million, or 15 cents on the dollar. Does that sound consistent with Democrat Party rhetoric?
That rhetoric isn’t just coming from the President who received so much campaign support from Kaiser, and rewarded him by pouring $535 million of taxpayer money into Kaiser’s absurd Solyndra boondoggle. Kaiser himself claims to be on board with the whole “Buffett Rule” concept, as quoted in Forbes:
I agree wholeheartedly that our tax system is insufficiently progressive. I also agree that the estate tax at levels above $10 million should be retained. Higher tax rates for higher levels of income [up to at least 50%, maybe higher] not only are socially responsible but also would encourage more charitable giving.
Kaiser must have experienced a massive change of heart since the days he was claiming zero taxable income while amassing his billion-dollar fortune. That’s part of the fraud behind these “raise-my-taxes billionaires”: they’ve already got theirs. They don’t mind throwing their weight behind schemes to soak the income of others, because they’re sitting on treasure vaults filled with assets.
Speaking of Buffett, he talks a lot about raising the taxes of others, but fights like a demon to avoid paying his own, and seems curiously unwilling to voluntarily donate his vast fortune to the wise politicians he claims to admire. After hearing the sad story of how billionaires are paying lower taxes than Buffett’s secretary once too often, Rep. Tim Huelskamp (R-KS) wrote an open letter to the Sage of Omaha, inviting him to put his tax returns where his mouth is:
The “Buffett Rule” – as it is called – uses your anecdote to shape an entire nation’s tax policy. Given the use of your name and your story as the guiding force for the President’s policy prescription, it is my hope that the evidence to justify such a change in policy will soon be available for public review.
Not only is your story contrary to publicly-available data about tax rates, but it seems like you are comparing apples to oranges. If you are paying a lower tax rate than your secretary, it is only logical to assume that the bulk of your income is from capital gains and other investments rather than ordinary income. Regardless of the rate you pay for these sources of income, you are certainly paying a great deal more in taxes than nearly all Americans as a result of this income. Perhaps the assertion about paying a lower rate in taxes than your secretary is true, but it is certainly misleading.
The simplest way to substantiate your claim is to publicly disclose your tax returns as soon as possible so that policymakers, and the American people who elect them, can properly determine their veracity. If you were to come before any Congressional Committee and testify, any Member of Congress would ask for the evidence to back up your claim – under oath.
(Emphases mine.) Huelskamp later sweetened the deal by offering to release his own personal tax returns at the same time. Buffett did not rise to meet this challenge. While he was eventually willing to disclose his adjusted gross income of $62,855,038 and taxable income of $39,814,784 in a letter to Huelskamp, he won’t release his full returns. He said he doesn’t think there’s much to learn from Rep. Huelskamp’s tax returns, but he’d think about making his public domain if media mogul Rupert Murdoch does, too.
“What would be useful would be to get more of the rich to publish their returns,” Buffett wrote to Huelskamp. “After the Wall Street Journal suggested I publish my return, I stated that I would be happy to do so the next morning if their boss – Rupert Murdoch, one of my ultra-rich colleagues – would similarly make his return available. If you could get other ultra-rich Americans to publish their returns along with mine, that would be very useful to the tax dialogue and intelligent reform.”
Of course, Rupert Murdoch isn’t the one calling for other people’s taxes to be raised – or, more to the point, cheerfully lending his name to a desperate liberal politician’s scheme to tax the hell out of small businessmen who only make $250,000 per year.
Warren Buffett’s personal idea of the “Buffett Rule,” as he has quietly explained to the rare interviewer who directly quizzes him about it, would be an alternative minimum tax applying to people who make tens of millions of dollars. He has said he only thinks about fifty thousand people in the entire country would fit into this group, and he explicitly stated that millionaire athletes and TV stars don’t make enough money to qualify.
That’s a far cry from Barack Obama’s hunger to raise taxes on people who earn low six-figure incomes, but Buffett doesn’t mind lending his name to Obama’s tax grab. He has said Obama’s people didn’t even discuss their agenda with him before appropriating his name, but he didn’t seem very upset about it.
Huelskamp said he was “disappointed” by Buffet’s refusal to come clean about his tax avoidance strategies. “By sheltering millions of dollars of income from taxation, probably through charitable giving, Mr. Buffett demonstrates that he doesn’t trust Washington with his own money either,” the Congressman pointed out.
Bingo. The Democrat agenda is based on the notion that refusing to pay high taxes is immoral, because the government is better able to spend money than the people who earned it, and the public good has a greater moral claim on every dollar than individual ambition. Leaving the Buffett Rule aside, even the existing Alternative Minimum Tax is premised on the idea that using too many legal deductions to shelter too much income – in full compliance with our incredibly complex body of tax law – is unethical.
According to that reasoning, George Kaiser, Warren Buffett, and other billionaire Democrat Party stalwarts are to be condemned for refusing to hand over their incomes voluntarily. Kaiser monopolized an awful lot of government resources in the process of beating the IRS down to accepting fifteen cents on the dollar for his back taxes. If these people just handed over their millions, as they expect others to meekly hand over their thousands, the government would be able to dedicate more of its attention to vital tasks, such as cranking out “green” jobs at five million bucks a pop.
Either you believe that everyone has a moral right to earn as much as they can, and pay as little tax on those earnings as possible, or you believe that no one does. Or… you believe the answer to that question depends on which Party identification card the billionaire in question carries in his wallet.