Saturday, March 10, 2012

Buffett and Bono turn bozo

Just as rock stars ought to stick to music and eschew politics so investors – no matter how great – should stay away from public policy analysis and prescription.

Warren Buffett’s venture into tax policy has been an unmitigated disaster as well as an embarrassment because he broke his own rules  - he erred and strayed into areas he knows nothing about.

I guess it helps to know your favourite investment analyst is human, but…..

The lawsuit against the IRS by Warren Buffett's Berkshire Hathaway subsidiary NetJets to avoid paying $643 million in taxes that the IRS said it owed was the subject of a post here back in November. Now, the Huffington Post reports, NetJets paid $2.5 million to lobbyists who got Congress to change the law so the company doesn't owe the tax. From the bio of Jeff Munk, who the Huffington Post says led the lobbying effort:

Prior to joining the firm, Jeff served as Legislative Counsel to U.S. Senator Kay Bailey Hutchison (R-TX). Today, Sen. Hutchison is Ranking Republican of the Senate Commerce, Science & Transportation Committee. While with Sen. Hutchison, Jeff developed and executed the senator's major legislative initiatives and counseled the senator on policy issues and floor procedures. He was the Senator's key counsel on taxes, trade, appropriations, environment, and regulatory issues.

The revolving door strikes again.

Let it be said, too, that a $643 million return on a $2.5 million lobbying investment is a pretty good return on investment even by Warren Buffett standards.

Never mind the hypocrisy of the fact that the tax savings Mr. Buffett realizes here far outweighs whatever additional he would pay under the proposed "Buffett Tax."

From Future of Capitalism


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