Dear Mr. Buffett,
Let me begin by thanking you for your awesome, courageous, public admission that you were taxed at a lower rate than your secretary. The entire world, including me – as if I matter in a world of seven billion humans – has but the greatest admiration for your frankness. Who would have thought, the poster boy – er, gentleman – for the super duper rich pleading to pay more in taxes. Well, and please forgive me for being a tad forthright, but, so far, I haven’t heard any more about this truly generous and fair offer.
Perhaps you don’t know how to go about it, new territory, after all, this unprecedented offer to equally share the burden of maintaining a relatively safe – let’s leave the tricky gun issue alone for now – prosperous and, maybe not as equal is it might be with a little tweaking, society. So, I hope I’m not stepping out of line here by offering the smartest investor in this quadrant of the galaxy a free roadmap as to how you can go about bearing your fair share of the tax burden and serving as a guiding light to all the other incredibly hyper rich humans on this planet – I’m, of course, here excluding some of the more dodgy characters who are also bazillionaires, like dictators, drug barons, slave traders and others who will never understand how to actually pay their fair share, perhaps never ever even understand the word fair.
I’m kind of comfortable with my thoughts in point form, and I know how tacky it all looks, particularly when it’s not really complicated stuff which has to be hidden in nice English prose. It’s, I want to say, not rocket science. So, here goes.
First, figure out how much you have actually earned in the tax year, which usually runs for 12 months. You can of course exclude all those options and stuff only you guys at the top get that have not yet matured and so cannot be cashed in.
Second, look at the tax tables and find the column and row that corresponds to the income you have calculated in “First” above and you’ll also find there a rate which you should apply to that income in “First” above.
Third, multiply the percentage from “Second” above by the amount from “First” just above that and, voila (sorry about the French, but I live in Quebec and they take a dim view of their citizens trying to avoid using French, almost as much as they hate it when you try and avoid taxes, unless, you guessed it, you are unbelievably rich) you have just come up with your fair share of the tax burden needed to protect that safe society we mentioned earlier.
Fourth, write a check in the name of ‘government of whatever country you happen to be a citizen of at the time of writing’ in the amount calculated in “Third” above. And, don’t forget to affix proper postage. Wouldn’t want to defraud the mail service or, perish the thought, have it returned to you.
I know, I know, the sticklers and finance Taliban types will say there’s a lot more to calculating taxable income than the simple steps I’ve outlined above. And they would be right because the tax code has been written so as to make paying your fair share when you’re indescribably rich almost impossible. What’s a money bags big shot to do, what with offshore accounts on lusciously warm tropical islands, fancy flow through instruments, differential rates for capital gains and dividends – stuff earned mainly by the rather well off – lollapalooza political donation write-offs, deductions for giving that Rembrandt, which after so many years has in any event become boring, to the nice little local museum? But, as somebody’s grandparent must surely have admonished, simpler is better, a sort of pastoral version of Occam’s razor, with which you may be more familiar.
I know this will sound really audacious, but please bear with me a moment longer. To solve this dilemma of the top .01% (that’s like being number one among 10,000 people or, in America, like being in the top 33,000 out of 330 million people), have you tried telling the people who take care of this stuff for you to just put that little bit extra you earn, above and beyond the basic necessities like food and other stuff, into some simple investments so that you could save a little on that army of talented accountants stressing over how you can get around all the loopholes just to pay your fair share of the tax burden? After all, this is presumably your goal. And, a final word. While your generosity in giving away all your gazillions is most appreciated, it’s probably better to just pay the taxes and let the government do the generosity bit, corrupt and inefficient it may be.