In a New York Times op-ed piece last month, Billionaire Investor Warren Buffett voiced the complaint that rich people like him pay a smaller share of their income in federal taxes than middle-class taxpayers.

According to Buffett, he and his rich friends “have been coddled long enough by a billionaire-friendly Congress.”

This, as you now know, led President Barack Hussein Obama, to name his latest “Soak-the-Rich-to-Improve-the-Economy” scheme, which he unveiled yesterday, the Buffett Plan.

Apropos, since both the plan and its namesake, positively reek of hypocrisy.

So, how does Buffett get away with not paying a whole lot of taxes?.  As Peter J. O’Reilly, writing for Forbes.com, explains it,  the answer is very simple:

…Berkshire Hathaway does not in fact pay dividends. Mr. Buffett’s secret which you can find blasted all over the Internet is one of his famous quotations:

Our favorite holding period is forever.

You only pay income taxes at any rate on realized appreciation. An investment with a holding period of forever incurs a capital gains tax of 0%, while all along the holder can be getting wealthy from appreciation. That’s the real reason Mr. Buffett does not pay a lot of income taxes.

He protects his wealth by reinvesting it.  His money in the bank (taxable income) represents only a small percentage of his real income.  Therefore, he will be able to handle a tax increase with ease.

For example, an article posted on 9/13/11, on wsj.com, reports that:

Warren Buffett is likely to make at least $1.2 billion from an investment in General Electric struck during the heart of the financial crisis in October 2008.

GE confirmed today it plans to repay Buffett’s $3 billion investment, which helped prop up confidence in the conglomerate as the financial world was being torn apart. Under the terms of the deal, GE owes Buffett a 10% repayment premium, or $300 million, on top of his $3 billion returned investment.

In addition, GE agreed to pay Buffett a 10% annual dividend, or $300 million a year, to rent his seal of approval. That means Buffett will have accumulated $900 million in cumulative dividends, assuming GE repays the preferred-stock investment in October. The $900 million would buy nearly 42 million 20-ounce T-bones at Buffett hangout Piccolo’s in Omaha.

And, more importantly, he cheats.  From Americans for Limited Government’s netrightdaily.com:

According to Berkshire Hathaway’s own annual report — see Note 15 on pp. 54-56 — the company has been in a years-long dispute over its federal tax bills.

According to the report, “We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (‘IRS’) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “The company has been short-changing the tax collection agency for much of the past decade. Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years.”

Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch. Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.

A great deal was made in the MSM about Buffett’s pledge to give away 85% of his considerable fortune in Berkshire Hathaway stock to the Bill and Melanie Gates Foundation.  In July of this year alone, he gave a gift of $1.5 billion to the charity, of which he is a Trustee.

However, Shira Ovide told us the rest of the story in an article found on wsj.com on 7/7/11:

At the beginning of July each year, Buffett hands over chunks of Berkshire Hathaway stock to the Bill and Melinda Gates Foundation. It is all part of plans Buffett kicked off in 2006 to give away the bulk of his vast fortune to charity.

The Gates’ foundation, helmed in part by the former Microsoft CEO and longtime Buffett buddy, has the enviable task of spending Buffett’s gift. In 2006, the donation had a value of $30 billion, making it the biggest philanthropic largess in history.

Under the system Buffett put in place when he announced his massive donation, the number of shares he hands over declines by 5% a year. Still, Buffett predicted that the value of the donations would “trend higher” along with the price of Berkshire stock. This year, that didn’t happen.

The latest donation of 19.3 million Class B Berkshire stock is valued at more than $1.5 billion, based on today’s closing share price. The value is less than last year’s stock handover of 20.4 million shares, because of a slight dip in the value of Berkshire stock since last July.

And this is the man whom the president is holding up as a shining example?

Obama has named a bill after a guy who does everything that this punitive proposal is supposed to “fix”.

Hypocrisy,  thy name is…well…take your pick.