LA Times: Taxing Warren Buffett

"Republican critics are seemingly oblivious that, in many ways, his tax ideas mirror those of Ronald Reagan."

It seems that the latest strategy for the left can be boiled down to two points

1. Call their opponents bullies
2. Latch onto Ronald Reagan

With respect to those two points, a few quotes from the piece

•  "a GOP lawmaker is teasing liberals by introducing a bill to add a line item on state tax forms allowing people to voluntarily pay extra taxes" and "like most bullies confronted with a powerful argument, they'd rather mock it than try to refute it"
• "Congress has steadily drilled loopholes back into the code while lowering the tax burden for wealthy people who make money through investments rather than labor" with respect to the Reagan tax reform of 1986, in which   .. "capital gains were taxed at the same rate as ordinary income".

What's wrong with pointing out the weakness of Buffett's argument?  If he wants to pay more for anything, including his employees, he is entirely free to do so.  He is entirely free to pay for whatever charity he wishes, he can also pay more in taxes, if he feels that he is undertaxed.  What is bullying about that?

What powerful argument?  It is nothing more than class envy.  Now, here is a matter of equity- do not allow for losses to be attributed to capital gains to offset gains at the ordinary income rate.  In other words, if someone loses a lot of money, this cannot reduce their income at a higher rate than what is gained.  For example, a million dollar gain is taxed at the lower rate, a million dollar loss should offset more than a million in income.  If that is already in the code, then it is fair.

What these people fail to understand is that capital gains is not like putting money in a bank.  It is subject to risk.  The lower rates do not discourage more risk taking, but higher rates would.  After all, it is a matter of common sense.  If your capital gains are taxed at ordinary income rates, and the top rate is close to 40%, then why would you take greater risks?  To get only a little more than half of what you earned by an activity that is more risky?

Some tax codes don't tax capital gains at all.  There is no risk in being a laborer.  You work and you get paid. On the other hand, if you risk capital, you risk that money before you make a dime.  In some cases, you will lose.  When you lose, you can't go cry to mommy and daddy about the owie you took.

Update:

Lots of good rebuttal at the Free Republic site.

Update:

It is also useful to point out that AIG got bailed out and Berkshire Hathaway had a exposure to that.  So, the taxpayer bailed Buffett out, but he wants everybody else to pay for it.  That makes all his concern seem a bit false.