I love this account of this contest of wills between Warren Buffett and Mitch McConnell. The Senator from Kentucky has been urging the Sage of Omaha to make voluntary contributions to the Treasury if he felt he was under-taxed. Buffett has now responded that he’ll match any such contributions made by Republican Senators.
This dialogue makes, in a different form, an argument offered by the raving lefty Milton Friedman. Voluntary contributions to reduce poverty (or do any of the other things we rely on the government to do) are insufficient, because everyone would be willing to pay his or her share only if s/he could be sure that everyone else would be willing to pay his or her share. Otherwise, no dice.
Doubtless McConnell will ignore Buffett’s challenge and continue his nonsensical bluster about Buffett’s freedom to pay extra if he feels “guilty” about his low tax rate. But the point isn’t, of course, how Buffett feels, or even what he does—it’s what everyone else does. And if McConnell and his buddies don’t donate to the Treasury, then they are poster children for the free-rider problem—thereby proving Buffett right: philanthropy is not sufficient and taxation is necessary.
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Read more stories by Kelly Kleiman.