Buffett isn't leading by example, at least in this instance. In October 2008, at the height of the financial crisis, he was telling investors to buy U.S. stocks, saying he was using his personal account to do the same. This time around, Buffett isn't putting his money where his mouth is, at least not yet. Paying higher taxes and announcing a willingness to pay higher taxes are not the same.
Take Howard Schultz, CEO of Starbucks (SBUX), on the other hand. He privately emailed other company executives in the U.S. to urge them to join him in boycotting political contributions "until the Congress and the President return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people."
Second, why has Buffett decided to address the tax-break situation now, rather than during either the debt-ceiling debate weeks ago or in late 2010 when the Bush-era tax cuts were debated and ultimately extended? There are a few possible explanations for this, not all of which are flattering for Buffett.
It could be that, out of the goodness of his heart, Buffett is offering himself and other mega-rich taxpayers up to the 12 members of Congress tasked with sorting out the country's finances. Buffett says it's imperative to cut spending but also increase revenue in order to find a compromise that truly deals with the fiscal problems in the U.S. If anything, this bails out Congress by giving them ammunition to raise taxes on the super-rich.This could also be a very well-orchestrated PR campaign by Buffett, who has endured a rocky stretch recently. Buffett may be known as the savviest of value investors, eating cheeseburgers and drinking Cherry Coke in the local diner in Omaha. But the billionaire investor has seen his credibility called into question several times over the past few years. For example, Buffett famously called derivatives "financial weapons of mass destruction," comparing them to venereal disease. "It's not just whom you sleep with, but also whom they are sleeping with," Buffett warned. And yet, Buffett's Berkshire Hathaway (BRK-A) has made hundreds of millions on derivatives bets.
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