Politics & Policy

The Real Fat Cats

Rapper Jay-Z and President Obama at a 2012 campaign rally
Do Warren Buffett and Jay-Z pay their “fair share”?

Who exactly were the rich who, as the president said, were not “paying their fair share”? The rapper Jay-Z (net worth: nearly $500 million)? The actor Johnny Depp (2011 income: $50 million)? Neither seems to have heard the president’s earlier warning that “at a certain point you’ve made enough money.”

Could both zillionaires simply have quit making money at $10 million — and thereby given their poorer audiences a break on ticket prices?

With all the talk of raising taxes on the supposedly conservative rich who make more than $250,000 per year, why not levy a $3 surcharge on tickets for movies, concerts, and sporting events to “spread the wealth” from multimillionaires? That way, LeBron James (approximate annual earnings: $53 million) or Oliver Stone (net worth: approximately $50 million) might at last begin to “level the playing field.”

Is Michael Moore (net worth: approximately $50 million) a one-tenth-of-one-percenter? If so, why do mansion-living-grandee movie directors like Moore and Stone need state subsidies and tax breaks to produce their films, when most states are nearly as insolvent as the federal government? 

#ad#Warren Buffett likewise did not heed the president’s advice that after 2008 it was not the time to profit. Did he pay any attention to Obama’s additional warning that, “if you own a business, you didn’t build that”? Apparently not.

Otherwise, Buffett would not think that his own expertise and hard work had built Berkshire Hathaway, or that he has the right to leave his $50 billion fortune to nonprofit institutions of his choice — thereby shorting the Internal Revenue Service billions of dollars in lost estate taxes. With a trillion-dollar-plus annual federal deficit, either the Department of Housing and Urban Development or the Department of Health and Human Services surely could use Buffett’s loot far more than the already well-endowed Gates Foundation.

If the country is going to turn redistributionist, then we might as well do so whole-hog — given that eight of the wealthiest ten counties in America voted for Obama. Why not limit mortgage-interest deductions to just one loan under $100,000 — while ending tax breaks altogether for second and third vacation houses?

Under the present system, the beleaguered 99 percent are subsidizing the abodes of Hollywood and Silicon Valley “millionaires and billionaires” — many of whom themselves have been railing against the 1 percent. Should the government provide tens of thousands of dollars in tax breaks for a blue-state 1-percenter to live in tony Palo Alto or Newport Beach when there are plenty of fine homes far cheaper and sitting empty not far away in Stockton and Bakersfield?

Blue states usually have far higher state income taxes that are used as deductions to reduce what is owed on federal income tax. Why should working folks in Nevada or Texas have to pay their fair share, while Wall Streeters get huge federal write-offs from their New York or Connecticut state income taxes?

With the new obsessions over income and net worth, we might as well also means-test all federal programs. Should anyone — do we remember Solyndra? — be eligible for federal cash loans if he makes over $250,000 per year? Why would affirmative action apply to the children of millionaires like the offspring of Eric Holder, Susan Rice, or, for that matter, Barack Obama, while excluding the destitute children of Appalachian coal miners and the poor clingers of Pennsylvania?

Remember the revolving door that Barack Obama once promised to end? The former head of his Office of Management and Budget, Peter Orszag, used his title and insider contacts to walk right into a Citigroup fat-cat banker’s job that pays him an estimated $2 million to $3 million a year. 

Clinton administration apparatchiks such as Jamie Gorelick, James Johnson, and Franklin Raines — without much banking experience — reaped millions of dollars working at Fannie Mae as it went nearly bankrupt. If you leave government and immediately make more than $1 million, why not pay a 50 percent tax on your income for five years — given that “somebody else made that happen”? Why does Google have tax havens in the Caribbean, and why do six-figure-income college presidents have their taxes paid by their universities?

For much of 2012, Obama waged a veritable class war against conservatives, as if they were all right-wing clones of Donald Trump and the Koch brothers. But modern Democrats — Nancy Pelosi, George Soros, Steven Spielberg, Brian Williams, or Oprah Winfrey — are as likely to be very wealthy as are Republicans, who increasingly better represent small-business owners desperately struggling to become affluent.

Next time around, Republicans might remind us of that paradox by nominating a small-business scrapper, who — unlike millionaires such as Al Gore, John Kerry, or Barack Obama — did not go to prep school and the Ivy League. And they might find better ways for those in academia, entertainment, sports, big law, and the media to pay their fair share.

— Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author, most recently, of The End of Sparta. You can reach him by e-mailing author@victorhanson.com. © 2012 Tribune Media Services

NRO contributor Victor Davis Hanson is the Martin and Illie Anderson Senior Fellow at the Hoover Institution and the author, most recently, of The Case for Trump.

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