Last night I watched an interview Charlie Rose did with Warren Buffett on PBS relating to his editorial in the Wall Street Journal relating to the economy and how rich people should be taxed more. The article can be found here.

Watching Mr Buffett is always entertaining as he seems more like your crazy uncle than a billionaire. He’s very engaging, well spoken, and fairly light hearted when he speaks. Before watching this, I’ll admit that I thought raising taxes on the rich was a waste of time, but by the time it was over I could see the logic behind Mr Buffett’s argument. That being said, I don’t think he really goes far enough and here’s why.

½ of the people in the US don’t pay any taxes at all. That’s a lot of people. There are some good reasons for that, but I’d bet there are a good number people out there who could contribute without it being a horrible burden. Mr Buffett talked a little about shared sacrifice and how it’s easier for a guy like him to absorb it, which is true, but in the end I think it weakens our country. Here’s why:

Getting a free ride sounds great, but for too many people it is demoralizing and leads to a wrong mentality. Humans are amazing beings capable of great things when pressed. There is a huge difference between starving to death or collecting welfare. Knowing you are going to starve to death can be a powerful motivator. When I lost my job several years ago I collected unemployment for a couple months (at that time you could collect unemployment for up to 6 months) but quickly realized that I had to do something quickly or my family would starve and we might lose our house. I suppose welfare was an option, but not in my mind. I developed a quiet desperation that I doubt would have been there if I believed someone would take care of me and I could just find a job in my own sweet time.

While well intended, welfare seems to breed generations on welfare. Something about knowing the government will take care of you seems to short-circuit the human will to excel. When faced with no alternative, would people find a job or start a business? Or would they simply lay down and die somewhere? Hard to tell.

I certainly don’t advocate doing away with programs to help those who need it, but I don’t think that rich people paying more will make things better. Too many people seem to feel entitled to other people’s money and that’s not good for America. We need to find ways to encourage people to stand tall and take responsibility for their own lives. As I mentioned earlier humans are amazing and capable of great things under the most difficult situations.

Having rich people pay more isn’t a bad idea, but I don’t think it’s the answer to our bigger problems, most importantly how to get people empowered to be responsible for their own fate.