My spirits soared the day billionaire Warren Buffett made a statement destined to rock the world of the super rich and just-plain-rich. He said he and others like him should be taxed to pay their share of running this country. It rocketed me to a new high because Buffett is one of the richest humans on the planet. He's at the top of the pyramid.
“OUR leaders have asked for ‘shared sacrifice.’ But when they did the asking, they spared me,” he said. Did I read that right or am I hallucinating? Buffett continued, “I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched. While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. These blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species.” Pure Buffett.“If you make money with money,” he continued, “as some of my super-rich friends do, your [tax] percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.”
Last year about 80 percent of tax revenues came from personal income taxes and payroll taxes. Buffett noted, “The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot. “People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”
“I know well many of the mega-rich and, by and large, they are very decent people, said Buffett. “They love America and appreciate the opportunity this country has given them. Most wouldn’t mind being told to pay more in taxes, particularly when so many of their fellow citizens are truly suffering.” Then he commented on the twelve members of Congress who soon take on the crucial job of rearranging our country’s finances. “They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.
“This poor and the middle class…need every break they can get,” Buffett pointed out. Can you believe that, from a multi billionaire? Was ever there a more socially and emotionally balanced human being? Buffett gets it.
The universe doesn’t play games. Everything in it must balance or is doomed to extinction. Volcanoes erupt to re-acquire equilibrium. They must. Earthquakes shake themselves to equilibrium. They must. Tidal waves crash to regain balance. They must. Our entire universe is a system of balanced energies. Humans are part of that.
“My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice, Buffett announced. WOW.
Here’s the bottom line. There is no economically sensible (balanced) or politically honest way to address the deficit without also increasing revenues and reforming the tax code.
The Bush tax cuts are the major reason the country is in the financial shape it’s in. In a the recent debt fight Republicans held unemployment benefits and other measures hostage. Letting the cuts expire at the end of 2012 would save $3.8 trillion over the next decade. That would make a real dent in the $2.4 trillion in total deficit reduction in the debt limit deal.
A sensible and fair approach would be to let the high-end tax cuts expire as scheduled, but keep the other tax cuts for another year. That would keep more cash in the hands of people most likely to spend it and prop up consumer demand while the economy is weak. It would give Congress and the administration time to undertake real tax reform. Any reform must streamline the code, make it fairer and — most important — raise more revenue. The challenge is how does Congress, comprised of 231 millionaires and billionaires, undertake tax reform? Is the fox really the one to decide how the chickens fare in the coop? There’s only one logical answer: public referendum.
Right now, wealthier taxpayers get the greatest benefit. They put forward the proposition that without them everyone else would live in poverty because they create jobs. That has to be the most out-of-balance mathematical equation ever hypothesized in the history of mankind. By definition every equation has to balance, so it follows that without workers the business entity would evaporate, no matter how world-changing one’s entrepreneurial idea is. Let’s get real, get rid of the euphemisms, and call this what it is: a modern day caste system.
The process needs to be reformed so that help flows to those who most need it: low- and middle-income taxpayers, the people who, in the final analysis, pay for everything. To work properly America’s debt-driven financial system demands that. But any economic system has to work for everyone or it dies of top-heaviness. The equation needs rebalancing so it doesn’t implode from its own inequality. The rebalancing needs to begin with health care for all Americans that’s the equivalent of what Congress gives itself. That is the most basic of requirements in any society of humans. Imagine a super wealthy person suddenly losing it all and finding himself on the street? Can you guess what his politics might change to at that point? Controlling the outrageous perks Congress has given to corporations moving their employment and their profits overseas is a must.
Tax breaks that have outlived their purpose must be ended, starting with subsidies for the oil industry, which is making billions in profits. And financial firms, insurance, pharmaceuticals, and communications, and energy suppliers. The revenue from such reforms could pay down the deficit and allow all tax rates to be lowered, improving incentives to work. Reasonable profits are fine. Reasonable executive compensation is fine. Both are not fine once they pass from fine into creation of serfdom for the rest.
One more thing. Listening to the babble in Washington forces one to the realization that the opposite of a profound truth may well be another profound truth. Two opposing truths can exist simultaneously in the same space. Neither negates the other but complements the other to create synergistic, heartier abundance for all. We know this to be true: some will hear, but not listen; some will listen, but not understand; and, some will understand, but not act. Washington needs consensus, not divergence and conflict.
Many of us tend to suffer from ‘agenda anxiety’ and ego-itis, the feeling that what we want to say to others is more important than what we think they want to say to us. Acknowledging that is the first step in repairing the damages the conflict has brought upon you. Everyone can see you anyway, why not admit what everyone is seeing? Self-truth and truth with others about where one has fallen short almost ensures that you will go a long way. Admit your ‘weaknesses’ and watch them morph into your greatest strengths.
Life is simple. If someone is going down the wrong road, he doesn’t need condemnation to slow him down or motivation to speed him up. What he needs is education to turn him around. We all have that responsibility, especially those who have benefited from superb breaks in life for whatever reason.
Warren Buffett has set the bar for himself and for the fortunate others who are super rich.
Dick Rozek
Portsmouth, NH
October 30, 2011
No comments:
Post a Comment