Steve Stanek of the Heartland Institute:

There he goes again, Warren Buffett bleating about the supposed need for government to more heavily tax high-income earners while he owns life insurance companies that sell high earners “estate planning” products that help them avoid those taxes.

Of course, the higher taxes go, the more tax-sheltered products Buffett’s companies sell, and the more money he makes.

Buffett’s hypocrisy is matched only by the size of his multibillion-dollar investment portfolio. He displayed this in a recent column he wrote for the New York Times.

He pointed out the Forbes 400 list of the wealthiest individuals has about $1.7 trillion in wealth, then called for “a minimum tax on high incomes. I would suggest 30% of taxable income between $1 million and $10 million, and 35% on amounts above that.”

But wealth and income are different things. Wealth is the stocks, bonds, real estate, paintings, wine collections, businesses, and other things a person has acquired. Buffett has lots of wealth. Income is what a person gets paid for working or investments, through capital gains, dividends, and the like. Most of Buffett’s “income” is in dividends and capital gains, which are taxed less heavily than wages, and which he can choose to take or not take.

Few wage earners have the luxury of enough wealth to be able to defer income to lower their tax bite. Buffett has that luxury. Few wage earners can take capital gains or not take them at their convenience in order to control nearly their entire tax bite. Buffett can. …

Buffett says taxes were never mentioned as a reason to forgo an investment. I wonder, then, about the government’s many credits for alternative energy, the many states that offer film production tax credits, the many companies that go begging for tax incentives before deciding where to put their corporate headquarters, stores or factories, and the many state and local economic development entities that dangle tax incentives to lure and retain businesses.

The people in these industries, businesses and agencies seem to be telling us taxes are a big investment factor.

I wonder about Buffett himself, who pays a stable full of accountants and attorneys to provide advice on how to minimize taxes. Nothing in the tax code requires Buffett-owned businesses to take tax deductions or credits, yet they do, thus putting more wealth in Buffett’s portfolio.

Consider this Bloomberg News report from earlier this year: “NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. was countersued by the U.S. over $366 million in taxes and penalties.

“NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.” That $642.7 million tax bill would have been small change to Buffett, yet he fought it, as he’s fighting nearly $1 billion of claims the IRS has against his companies.

I quibble with only one Stanek point. While “nothing in the tax code requires Buffett-owned businesses to take tax deductions or credits,” the fiduciary responsibility of a company’s management is to maximize profits, because those profits belong to the company’s owners. “Maximizing profits” means maximizing revenues and minimizing expenses, and taxes are definitely an expense, money that cannot be put to a better use by that company.

This also makes you wonder how smart Buffett really is. Every $1 of taxes is $1 that can’t be spent on anything else, whether by a company or by a consumer. So when Buffett calls for higher taxes, one must assume he’s OK with his businesses having less business and making less money. What kind of business manager is that?

State postscript: You may be interested to know that, like the Koch brothers (employers of 4,000 Wisconsinites, most at Georgia–Pacific), Warren Buffett owns companies with Wisconsin operations. One is Lee Enterprises, owner of the Wisconsin State Journal in Madison, the La Crosse Tribune, the Chippewa (Falls) Herald, The Journal Times in Racine, the Baraboo News Republic, the Portage Daily Register, and the Beaver Dam Daily Citizen. (I worked briefly at the last, and read the first since age 2, but the State Journal has resolutely refused to hire me over the years.)

Buffett’s Berkshire Hathaway also owns International Dairy Queen, which franchises the Dairy Queen variants, Orange Julius and Karmelkorn.