When I’m not working on my own deals or thinking about how awesome a Google takeover of Motorola could be (made even cooler by what Kyncl would have access to for YouTube), I have been trying to follow the latest in the financial crisis.

I, like most of you read Warren Buffett’s piece in the New York Times this weekend (BTW, he chose the NYT to publish this, which used to be a clear choice and that it still is for him feels important), and immediately agreed with him.  The logic was sound, he has said similar things in the past and so it felt like the result of deep understanding (as Buffett is known for) and hard to argue with.  Tax those who can REALLY afford it at a higher rate to fix this problem that they were in a position to have been influential in to begin with makes sense.  Right?  If you haven’t read it yet, head on over to the Times and think about it for a while.  Then come back.

After a day of ruminating on the idea, doubts crept in.  Why penalize people who spend time creating wealth?  Is it right for taxes to pay for all of the projects the government sponsors these days?  Shouldn’t the burden be on government to pay for only what is really in its wheelhouse and then only what it can afford?

And then Michael Arrington* chimed in.  In his piece titled “Screw the Rich,” Arrington argues that Buffett’s plan would disproportionately impact the building of new wealth by those who aren’t mega-rich and serves more to protect the current imbalance of wealth than to fix the underlying problems. As those who know me have likely heard, I’m no Arrington fan-boy, but he provokes thought in areas I like to think about.  I can’t help it.  This is no exception.

I started to think about it.  It felt like he was onto something: the minority of the wealth is new income for the top tier… we want to promote spending in the people who can afford it rather than hoarding, BUT wait… Buffett and his brethren don’t keep their wealth in cash that is sitting idle for their own purposes; they invest it.  They help others create wealth.  They make it possible for new business to launch, for investors to extract returns, and for the system to keep moving.   If we change those behaviors (and changes in taxation has the result of changing behavior), do we end up better or worse off?

Arrington’s view in many respects equates to telling a donor that they should be giving more rather than thanking them for what they are providing, but in other respects… is he right?

I’m still not sure where I come out.  Let me know what you think.

*Full disclosure is overkill given my followers, but for propriety, I’ll remind you that my employer (AOL) also owns TechCrunch and employs Arrington.  I’ll further disclose that I do deals that impact TechCrunch and work with the team on a semi-regular basis, though I have not spoken with Arrington himself since long before the AOL acquisition.