Heavily Indebted Rep. Walsh Thinks He Knows Better Than Billionaire Buffett

August 31, 2011 3:52 pm ET — Alan Pyke

Rep. Joe Walsh (R-IL) went on Bloomberg TV yesterday to talk about Warren Buffet's recent op-ed calling for higher taxes on the "mega-rich." After a string of vituperative comments about Buffett's support for President Obama, including the assertion that Buffett's a "disingenuous" partisan ("his support for the president is so desperate"), Walsh went a step further: taxing billionaires per Buffett's suggestion will put us into another recession.

MATT MILLER (HOST): What do you think about the idea that raising taxes on the wealthy, on the millionaires and billionaires, would at least help the people earning less to stomach the cuts to the safety net we're gonna see. It's a compromise, right? Isn't that what politics is all about?

WALSH: Ultimately yes, but again, it makes no sense. If you raise taxes on millionaires and billionaires, you'll do nothing to address the debt and deficit, and the thing you might do is, you might finally put this economy over another cliff. These millionaires and billionaires are the folks that try to create jobs and help grow the economy. The last thing that we wanna do is increase taxes on them right now.


First, increasing taxes at the top would do much to close deficits. The Congressional Progressive Caucus budget would have balanced the federal books a good 10 years sooner than the GOP's "Path to Prosperity," a feat achieved through a wide range of taxes. The top end of the Bush tax cuts on regular income — not the much lower capital gains rate decried by Buffett — costs $700 billion over a decade. That's not nothing. Tack on Buffett's proposed capital gains change, and you've got another half-trillion. (Even the conservative Wall Street Journal ran a blog post this month that acknowledges such a plan would knock $400-500 billion off of deficits over the decade.) That's not nothing.

Second, Walsh offers no evidence for the claim that higher taxes for the superrich would cause a recession, because there is none. Taxes are currently at historic lows. Periods of higher top tax rates have also seen (if not caused) strong economic growth. And the data says higher capital gains rates do not stifle investment. Walsh is making stuff up — which shouldn't be a surprise considering this is the same guy who has no idea what size our economy is, but won't admit it.

Bottom line, wading past all the bogus numbers and swagger: It's hilarious for free-market conservative Joe Walsh to accuse one of the world's most successful capitalists of buffoonery. If your ideology tells you to measure success and competency in economic terms, and you're famous for being in debt and behind on child support payments, maybe you want to pick a softer target than a multibillionaire financier like Buffett. The market has determined that Buffett is successful and competent, and Walsh is not.