I’m sure most everyone has seen Warren Buffett’s New York Times piece by now. He presents a number of very good arguments about the fairness of our current tax system, and the absurdity of the Norquistian “no new revenues ever” policy. His argument is, essentially, that the political demand for “shared sacrifice” has hit the middle class, but not the mega-rich. He supports this by explaining why people who make the majority of their money through investment end up paying a smaller percent of their income as taxes than upper middle class people who gain income through payroll. (this is true) He asks that Congress make good on the calls for shared sacrifice by asking something more of him and those like him, who make money through investment and have more than 99.7% of Americans.
David Frum wrote a response on his site. He brings up some valid points, but I don’t think he’s right to direct it at Buffett.
Frum first claims that unemployment is a more pressing, and much larger, concern than our deficit or tax problems. I agree with him on this. He also argues that the vicious objections to monetary expansion, like the one Gov. Rick Perry recently voiced, are both incorrect and born out of self-interest. I agree with this as well. But he doesn’t simply make those points. He uses them as a counterpoint to Buffett, suggesting that what Buffett said is somehow devalued because he should have been talking about monetary policy instead.
Buffett’s piece is clearly addressing the incredible political and public anti-tax sentiment, which is a real problem that played a huge part in the recent debt ceiling crisis. Frum, on the other hand, is talking about objections to the Fed and quantitative easing. While the two share a common topic, they don’t actually have any direct cross over. I agree with the point Frum is making, he’s just not really engaging what Buffett said at all.
For those of you who disagree with everything I’ve said I agree with here, I do intent to write about taxes, the Fed and tight money specifically in the near future. Unfortunately, those are larger topics that will probably take more time and care to properly cover.