This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Buffett's Op-Ed on Taxes Too Little, Too Late

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.

Stock quotes in this article: MCO, MHP, SBUX, BRK-A, BRK-B, LZ 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs