Warren Buffett Wants to Pay More for Coney Dogs

When I was a kid, I worked at a the A&W Restaurant on 12 Mile road in Berkley, Michigan. The owner of that particular A&W, like many men of his generation, is a "car" man. He loves classic automobiles the way other people love wine or fishing. Once a week, all summer long, Larry would open up his drive-in restaurant to classic cars from across the state. As long as the weather and calendar cooperated, come Saturday night, the lot would turn into a collection of shiny nostalgia. It was the sexiest thing I've ever seen. As part of the event, Larry would offer a special menu for those who arrived in classic cars. Prices on the special menu were something out of the era Larry was recreating. I don't recall the specifics all these years later, but I know they put any dollar menu to shame. I remember wondering how Larry was making money on the venture, if that gives any idea of just how low the prices were. In all the years I worked there, through all the summers and all the long, hot Saturday nights spent preparing this wonderful food for the community, not once did someone in a cruise car ask to pay more for his coney dog. Not one driver in a classic Mustang asked to pay full price, like the family in the Sable parked next to him did. And that, my friends, is what Warren Buffett just did. He asked for the full-price menu. In a column for the New York Times, billionaire investor Warren Buffett laid out the case — morally and economically — for raising taxes on the super-rich, including himself. The piece, titled "Stop Coddling the Super-Rich", explains the absurd reality that billionaires pay a lower tax rate than lower and middle class Americans do. "Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent," explained Buffett. Warren Buffett, by far the wealthiest man in the room, pays half (or less) in tax rates than everyone else. That's a pretty cheap coney dog, right? Of course it is. It's also exceedingly unfair to the other taxpayers, as well as the system as a whole. After all, SOMEONE has to pay for all these coney dogs, or no one's going to eat. I suppose this is where supply-siders would step in and suggest that removing the special menu and asking classic car drivers to pay full price for their food would actually cause a decrease in revenues, as the classic car drivers would no longer utilize the restaurant. As far as Buffett is concerned, that argument is bunk. "I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation," Buffett said. Back to the A&W example. The folks who drive their classic cars into the lot every Saturday night do so because that's who they are: people with disposable income who love automobiles and love gathering to show what they have, see what other people have, and take in the camaraderie. These events are who they are. The wealthy are the same way. They invest because investing is what they do. Tax rates, by and large, are irrelevant, because you're talking about taxes on GAINS. Is an investor really going to walk away from a solid project because he might only make 65% instead of 75% profit? No! Profit is profit. "I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering," Buffett wrote. Like Warren Buffett, I understand that the rich enjoy their fifty cent coney dogs. They have been, as Buffett said, coddled for so long that they feel entitled to fifty cent coney dogs. But they — we America — cannot afford it any longer. It's time Congress stepped up and stopped handing out special menus to the super wealthy. It's time we all chipped in our share for coney dogs. You can reach the author by email john@benzinga.com or on twitter @johndthorpe.