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Day to Day Politics: It’s class warfare, my class is winning, but they shouldn’t be.

Tuesday 4 April 2017

What follows are edited pieces from an interview between CNN’s Lou Dobbs and Warren Buffet in 2005. Please note the year.

BUFFETT: I personally would increase the taxable base above the present $90,000. I pay very little in the way of Social Security taxes because I make a lot more than $90,000. And the people in my office pay the full tax. We’re already edging up the retirement age a bit. And I would means test … I get a check for $1,700 or $1,900 or something every month. I’m 74. And I cash it. But I’ll eat without it.

DOBBS: You will eat without it. So will literally more than a million other Americans, as well. Means testing, the idea of raising taxes, the payroll tax. In 1983, Alan Greenspan, the Fed chairman, he had a very simple idea: raise taxes. That’s what you’re saying here.

BUFFETT: Sure. But I wouldn’t raise the 12-point and a fraction payroll tax, I would raise the taxable base to above $90,000.

DOBBS: That’s a progressive idea. In other words, the rich people would pay more?

BUFFETT: Yeah. The rich people are doing so well in this country. I mean, we never had it so good.

DOBBS: What a radical idea.

BUFFETT: its class warfare, my class is winning, but they shouldn’t be.

DOBBS: Exactly. Your class, as you put it, is winning on estate taxes, which I know you are opposed to. I don’t know how your son Howard feels about that. I know you are opposed to it …

At the same week the House passed the estate tax, Congress passed the bankruptcy legislation, which they had the temerity to call bankruptcy reform, Democrats and Republicans passing this legislation, which is onerous to the middle class. Half of the bankruptcies in this country take place, because people fall ill, serious illnesses result in bankruptcy. Nearly half of the people involved. How do you, — you have watched a lot of politics. What is going on in this country?

BUFFETT: The rich are winning. Just take the estate tax, less than 2 percent of all estates pay any tax. A couple million people die every year, 40,000 or so estates get taxed.

We raise, what, $30 billion from the estate tax. And, you know, I would like to hear the congressman say where they are going to get the $30 billion from if they don’t get it from the estate tax. It’s nice to say, you know, wipe out this tax, but we’re running a huge deficit, so who does the $30 billion come from?

DOBBS: And it is, its $300 billion in lost tax revenue over the course of the next decade if the estate tax goes through.

You say the rich are winning. The rich are winning in some cases, because they are cheating. The corporate corruption scandals, which burst full upon the country at the end of 2001, Sarbanes-Oxley, new regulations, new efforts to achieve transparency. Has enough been done? Or does more need to be done?

BUFFETT: Well, right now corporate profits as a percentage of GDP in this country are right at the high. Corporate taxes as a percentage of total taxes raised are very close to the low.

DOBBS: Historically we’re talking about.

BUFFETT: Historically. So, you know, corporate America is not suffering, I’ll put it that way.

DOBBS: Corporate America is not suffering. In point of fact, those same organizations that I just mentioned, the U.S. Chamber of Commerce and the Business Roundtable representing some of the largest companies are saying “You tax us, you are taxing our consumers, our customers.” Do you think corporations in this country should be paying more? Taking some of that burden?

BUFFETT: I think that … you have seen companies be able to repatriate earnings with a very small tax that were taxed at very low rates abroad. Corporations are doing better in the total tax picture than the people I’m going to walk by on the street when I leave here.

DOBBS: And some of the people you are going to meet are going to say, perhaps this evening and otherwise in business circles, are going to say, Warren, what are you talking about, raise our taxes.

BUFFETT: They are still friends of mine, Lou.

DOBBS: You are going to get along. I know you are going to get along.

BUFFETT: Is there anyone I have forgotten to offend?

Since that interview In 2005 Buffets assertion that ”it’s class warfare, my class is winning, but they shouldn’t be” the rich have become even more powerful with more wealth than the lower classes could ever imagine.

After the 2016 Australian budget people dared to speak about the subject of ‘’class war”. Usually a taboo one at the best of times. Bill Shorten noted that the budget offered tax breaks for the wealthy, but nothing for those on less than $80,000 a year. The well-known columnist Andrew Bolt described Tanya Plibersek as a ”merchant of envy” for daring to point out that millionaires and big business would benefit from budget measures in a way that middle-income families won’t. Right wing journalist Miranda Divine even accused Scott Morrison of caving in to the new normal” of “soak-the-rich class warfare” by targeting the ”Coalition’s base of hardworking ‘lifters’ — the top 4 per cent of income earners”.

There is of course, in case you haven’t noticed, a class war going on. Warren Buffet re asserted his observation in 2011:

”There’s been class warfare going on for the last 20 years, and my class has won.”

As Jason Wilson pointed out in the Guardian after last year’s budget:

In Australia, as in other economies, since the 1990s, labour’s share of national income has declined dramatically, and in the last decade wage growth has fallen away too. Unions have declined in membership as their power in the workplace has been curtailed, and the screws have been put on the poorest with endless iterations of ”welfare reform”, even as corporate taxes have been cut.

In the past week we have seen huge tax reductions for the rich and privileged against a backdrop of taking away penalty rates for the poorest paid in our community and a lack of support on an increase of the minimum wage while around 700 companies pay no tax at all.

Inequality is rife and the rich have open to them any amount of tax concessions and ways of limiting their tax liability, yet those who feel disenfranchised turn to the likes Trump and Hanson who have no interest in them.

We live in a society where poverty is the fault of the victim but wealth comes from virtue and both are the natural order of things.

There’s a class war going on where one side has all the weapons and the other is just subservient. The why of it escapes my understanding?

Perhaps the answer can be found in materialism. Or in an entitlement society. Maybe it’s those elements of Christianity who believe in a gospel of wealth.

Do people believe it’s their individual right to take an ownership of prosperity and cultural worth? Perhaps the deliberate assassination, by the political and religious right, of science, has something to do with it. Maybe it’s the death of truth as we know it.

In my lifetime the left, as society has become more affluent, has certainly moved to the right and the right have gone further so.

Maybe it’s the preponderance of right-wing propaganda in our media. Whatever it is why are they so feral about it?

With the media I believe it is the threat of annihilation and in turn profit. Social media and the advent of bloggers is now threatening their power and influence.

In the case of Australian politicians, well they have inherited the worst traits of American Republicanism, Trumpism and the Tea Party. It’s loud, powerful and crass. It’s determined to have its way.

 But the mystery to me is why the middle and the deprived classes of society think their lot will be improved by electing those the least interested in doing so.

An observation.

”The word ”Frugality” is one of the most beautiful and joyful words in the English language, yet one that we are culturally cut off from understanding and enjoying and a consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things.”

Another observation.

”The purpose of propaganda is to make you feel good about the wrongs being perpetrated on you.”

Every time the left in Australia shouts fairness equality and equity the right come back with envy, class warfare and jealousy.

But what the hell is this class warfare everyone talks about? I would have thought that there was less class distinction in Australia than in most countries. At least on the surface. We do however have an attitude known as ”them and us” syndrome. This phrase speaks of the wealthy who are privileged beyond conscience and then, well there’s us. The battlers with aspirations to also be wealthy but, unlike Americans, with the common sense to know that not everyone can be. Although if you are one of them of course (the wealthy) it does afford you a better class of education, of medical treatment and access to the law.

In fact it gives you distinct societal advantages. Like tax havens, tax avoidance, and superannuation discounts not available to us. Oh and I forgot negative gearing and a myriad of other concessions.

The term ”Class Warfare” originates from the USA and has been a favourite form of attack by Fox News and the Republicans against the left. Like most things that have a basis in the worship of wealth and privilege the right in Australia adopt the same negative position. Fox News also uses the term ”War on wealth” in their efforts to support wealth as a national goal. Everyone should aspire to be rich even if everyone cannot.

Who is waging this so-called war? I don’t see the middle and lower classes up in arms over their treatment. But I do see the wealthy and the super-rich getting cranky every time there is a threat to their privilege.

Or at the suggestion that they should contribute more to the public coffers. In fact never in the history of this nation have the rich and the privileged been so openly brazen about their economic self-righteousness.

They are ably supported by the Murdoch press who invariably perpetuate and use the phrase “Class Warfare” in a manner that suggests the lower and middle classes and particularly the Labor Party are at war with the rich. But ask yourself who is doing all the complaining. It’s the wealthiest it’  ”them” not ”us”.

When for the first time Australian mining companies campaigned against the Rudd government effectively telling them how much tax they were prepared to pay, they were playing the class warfare card. Such was the power of wealth that Gina Rinehart, Twiggy Forrest and Clive Palmer got away with it. The fact that the minerals belong to all of us seemed unimportant to them. Not to mention the enormous taxpayer-funded subsidies they receive. They don’t seem to understand the concept of fairness. There is ”them” and ”us”

When Wayne Swan made a speech some years ago encouraging an equitable share of the country’s wealth he was accused of engaging in class warfare. Isn’t tax meant to be redistributed?

Even newspapers like the Herald Sun who pitch to a common man/woman demographic, pander to the class of rich without hesitation. Perhaps it’s because they are owned by one of the world’s wealthiest men. Ironic, isn’t it?

Let’s look at the GST for example. It burdens the poor and those with the least capacity to pay. It discriminates against the poor and the pensioners who are living a hand-to-mouth existence and spending the bulk of their income on the necessities of life – clothing, rent, heating, power etc. The middle and lower classes pay more GST than the rich but I don’t see them in open warfare because of it. Goodness, once the rich had to pay a luxury tax of 33% on their BMWs. Now it’s 10%.

Media commentary research shows that the Murdoch press is the major contributor to this supposed idea of a class warfare. The Australian Financial Review at the time ran 10 articles on this theme. The Daily Telegraph 21 and The Australian 77. Add to that a few disgruntled Labor hacks who couldn’t get their own way and you can identify who is leading the chorus. But us, until now, well we seem to be leaderless.

When the wealthiest in the land have for years virtually been practicing tax avoidance literally paying no tax and large corporations following suit, who is playing class warfare?

When such behaviour is questioned the right-wing media portray it as an attack on the wealthy. “It’s class warfare” they shout.

However, at the time of Swan’s essay, the Coalition planned to cut the rebate for low-income earners (mainly women) and take away the school bonus subsidies the war becomes a one-sided impasse. And when Abbott’s 2014 Budget was universally condemned as the most unfair ever because it placed the burden of budget repair on the poor and middle class, the right had the audacity to call it class warfare on the rich.

Yes, the rich are in a class of their own. And their success is judged on the size and value of their assets. A poor measure by any standard.

Even when it’s suggested that equality of opportunity in education is a noble pursuit and the right of every child, people like Christopher Pyne say it as class warfare and he ludicrously described the Gonski reforms as such. Mind you he confessed to never having read the report.

When a person like Pyne suggests that the implementation of Gonski is practicing class warfare, it’s easy to see who is actually practicing it. Those elitist bastards, not us.

The war it seems is only being waged against those who are wealthy and can afford it. Poor buggers. I’m tempted to donate 10% of my pension if they are doing it that bad.

So the ”Class War” would appear to be a Clayton’s one at best. Only one side is fighting it. It’s ”them” not ”us.”  And it’s very hard to get through to a class who believes that what’s theirs is theirs and what’s yours is negotiable.

They want all the excesses that come with wealth and then they want some more. As for us, we don’t confuse what we want with what we need.

When you consider that currently taxpayer subsidies given to mining companies, the taxpayer assisted negative gearing, the tax loopholes and the wealthy who just don’t pay tax at all, is it any wonder the rich feel threatened? And with a growing awareness that banks and big business are ripping us off, it is the rich who are practicing a class warfare that is breeding a growing inequality.

Neoliberalism argued that if government taxed the rich less and kept wages down and taxed the poor more than the more equitable society, through efficiencies would eventually become.

It hasn’t worked that way. All that has happened by releasing the super-rich from the constraints of democracy is to make them wealthier than morality should consent to.

You can be assured of one thing: When a conservative Government and right-wing MSM refer to class warfare they are simply saying ”they are trying to take something from us that we deserve and it’s not fair”. And remember that Maggie assured us that the poor would be looked after by the drip down effect of the rich.

My arse it will! It never has and it never will be.

My thought for the day.

”Meritocracy is a term used to imply that those at the top of the social scale have merit and a slur against those at the bottom.”

PS: And there we had the Prime Minister on Saturday imploring the Liberal Party not to go any further to the right. It’s too late, you already have.

 


20 comments

  1. Terry2

    At a time when the deficit and government debt have doubled the government are going to keep their word and remove the Deficit Tax Levy of 2% on high income earners.

    This promise is about the only promise that this government have kept at a time when, like corporate tax cuts, the economy is in no position to be giving money away.

    Go figure !

  2. Stephen Brailey

    👍

  3. kristapet

    It is high time for a reversal of this state of affairs, which this excellent article describes.
    It is time, this 21st Century “feudalism”, perpetuated by the rich was shattered.
    To quote Wayne Swan:
    “The current Liberal government is a government of the one percent, by the one percent, for the one percent. … ”
    This stranglehold must be broken.
    We need to vote wisely and triple check where preferences go …..no votes to the LNP, and, NONE to Liberal Sheep in Wolves clothing e.g One Nation or NX-Team or any others hovering about

  4. Wayne Turner

    Sadly and predictably Labor are too GUTLESS to take on the big end of town.The only thing they got out of buckling on the mining tax (A weak watered down version they went to),was that they will never take on the big end of town again.TOO GUTLESS LABOR.

    Of course Labor are better than the current mob.But,that is starting from really low standards. Talk/rumour is,after this mob is going to cut taxes for some businesses.They might raise taxes for the non-businesses ie: More CLASS WARFARE LNP STYLE cause it would be the big end of town they will going after.

  5. Wayne Turner

    i mean they won’t be going after the big end of town…

  6. Keitha Granville

    Is there a remote chance the Labor party will see that their electoral chances would be massively improved if they adopted a raft of measures that see the wealthy – individuals and corporations – actually paying their SHARE. No-one is asking them to pay more than their share and yet they currently pay little or nothing.
    Negative gearing – one house only, more than that and it’s a tax rort.
    Raise the tax free threshhold to $30,000
    Limit deductions so that those on $200,00 plusincomes can’t reduce their liability
    MAKE big business actually pay
    Where can we start with politicians ? Here’s a thought – increase their salaries and remove the extras: travel, accomodation, phones, stamps and the plethora of other “entitlements ”

    *sigh* and there we have the answer – no-one on any side wants to give up the goodies

  7. Zathras

    To quote another prominent American about the rich paying (or not paying) taxes – Democrat Senator Elizabeth Warren –

    “There is nobody in this country who got rich on his own.
    Nobody.
    You built a factory out there, good for you. But I want to be clear.
    You moved your goods to market on the roads that the rest of us paid for.
    You hired workers that the rest of us paid to educate.
    You were safe in your factory because of police forces and fire forces that the rest of us paid for

    You built a factory and it turned into something terrific or a great idea – God bless!
    Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along”.

    Fair enough, I say.

  8. wam

    not even a smile this morning Lord, just abject resignation
    ‘has failed to teach us the happiness of not having things.”? It seems certain that labor has been unable to convince the ‘not-haves’ who were seduced by the rabbott’s debt threat and voted for the libs that they should return to labor nor explained why ‘drip down’ wont work. It seems crazy but my facebook is full of tax cuts to business will stimulate the economy by increasing spending and never taking money from the poor end will decrease spending?

    Whatever and however the libs have taken advantage of our resignation to not having things on earth but we will get happiness in heaven.
    They began with ‘life wasn’t meant to be easy’ and now ‘it was labor’s fault’ is unchallenged.

    ps thatcher’s rule is well summated by malcolm dean:
    ‘But from the very beginning of the 18 years of Conservative rule the poor were under the cosh. No developed state, with the exception of New Zealand, suffered such a brutal widening of inequality’
    Trumbles and the son of a small car are rapidly travelling that road. Is billy on the bus?

  9. helvityni

    Countries that are doing well make sure people and businesses pay taxes, all their fair share according to their earnings…

    The ex-PM of Denmark mentioned this on Q&A last night. We do things differently here, tax avoidance is one of our national sports…

  10. Terry2

    During the last parliamentary session, Labor consistently asked the Prime Minister to intervene with the Fairwork Commission to ensure that the removal of penalty rates would not adversely affect the take-home pay of those affected.

    Initially Turnbull said :

    “The Prime Minister indicated the Government would push the commission to phase in the penalty rate cuts over two to five years in bid to ensure workers were not worse off.

    Mr Turnbull said an element of modern awards was that any changes would not reduce the take-home pay of workers.

    One option was to have the commission make a take-home pay order that whittles back penalty rates at the same time as annual minimum wage increases are awarded.

    “The employee’s overall pay packet increases and offsets the phased-in reduction in penalty rates,” Mr Turnbull said. ”

    So, that sounded quite reasonable but then something changed when, a few days later, the government made their submission to the Fairwork Commission and made it clear it did not consider it had any responsibility to suggest how low-paid workers’ pay packets could best be protected and rejected the option of legislating to allow take-home pay orders that would compensate those affected. Obviously, somebody got to Turnbull to change his approach so fundamentally.

    Labor the sought to legislate, via the Senate to block the implementation of the penalty rates decision until adequate compensation could be introduced to avoid those affected employees having their take-home pay reduced : the Seante supported the Labor move but it will undoubtedly be blocked in the lower House.

  11. Harquebus

    It’s the criminal classes versus the suckers.

    “Transparency International has released a new report, entitled Doors Wide Open: Corruption and Real Estate in Four Key Markets, which has identified Australia, Canada, the UK and the USA as the top four spots targeted by corrupt officials or criminals for real estate crime. Australia is the worst, failing to address 10-out-of-10 loopholes.”
    https://www.macrobusiness.com.au/2017/03/report-australia-worlds-worst-money-laundering-property-market/

    “Bankers own the Earth. Take it away from them, but leave them the power to create money, and with a flick of the pen they will create enough money to buy it back again.
    However, take away from them the power to create money, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in.
    But, if you wish to remain the slaves of bankers, and pay the cost of your own slavery, let them continue to create money.” — Sir Josiah Stamp – Former Director of the Bank of England.

    Cheers.

  12. townsvilleblog

    I have always classified myself as ‘working class’ sadly in Australia in the 21st century people like to identify themselves as ‘Dairy Case Managers’ at Woolworths, they are paid as shop assistants but think that they are ‘middle class’ because their title has ‘manager’ in it, which is ridiculous. Why can’t people recognize their station in life as I do. These ‘middle class’ people probably vote LNP because they believe that the LNP is their party because they are two bob tories. It’s about time we got over our inferiority complex and were proud to be ‘working class, and voted accordingly.

    The major parties are currently on the nose because they don’t have enough policies that benefit working people, and the temptation to exclaim “they are both the same” is of course false. The LNP are removing and abolishing every/any benefits to lowly paid workers where the ALP have some good policies to help the same group of people if only they would open their eyes. I believe the ALP should democratize itself to attract more members and become a real people’s party. This would mean a loss of internal power for AWU and SDA members and hand the reigns over to the general public in some areas, but I believe it would lift the ALP primary vote and help to win elections for the ‘working class.’

  13. Max Gross

    Guillotine Day cometh!

  14. Harquebus

    Some might be interested in this. The views expressed in the excerpts are not supported by article but, attributes them instead to the mindset of “The Rich”.

    “African-Americans are poor because they are stupid, European Americans are rich because they are smart. Full stop.”
    “The cream rise to the top, the scum sink to the bottom, and it’s all based on the packet of genes inherited from mom & dad, no matter what social system happens to be operating.”
    “The rich have “superior capitalist genes” that they pass along to their offspring. Clark hypothesized these as intelligence, literacy, a willingness to cooperate with strangers, a tolerance for hard work and long hours, and, most especially, time-preference for delayed rewards (creating a propensity to save instead of spend surpluses).”
    “It follows, then, that Western capitalism is a “superior” system that relies upon the “inferior” poor dying off as fast as possible.”
    “This is the reason they despise the existence of the state and intervention in the “free” market–it allows the weak and feckless to survive at the expense of the strong and capable.”
    “Thus, the “free” market is not the best means to ensure prosperity for all, as the original market liberals claimed. Rather, suffering and death must be built into the system because only that allows it to act as an appropriate Darwinian winnowing mechanism permitting the “survival of the fittest.” And who are the “fittest?” Those who rise to the top and make the most money are the “fittest” in this system.”
    “NeoLiberal ideology has an axiom that “jobs are created by those who have money.””
    “Poor people, by this ideology, do not deserve to have much money, because if they were doing something that other people wanted a lot of they’d have a lot of money.”
    http://hipcrimevocab.com/2017/04/02/what-is-the-alt-right/

    Cheers.

  15. Freethinker

    Simply repugnant!

  16. win jeavons

    It is called the Prosperity Gospel, very convenient for pretend Christians , but diametrically opposed to the founder’s teaching ! It is not so much a heresy as a complete inversion of the teaching. If there is an anti Christ this is his testament, and he has a lot of followers in the Us and now , sadly now here in Oz.

  17. Alan Baird

    If Labor won’t take on the Liberals over these latest dollops of largesse for the wealthy, then expect them to assume power and leave it exactly as it is. If Bill looks as if he’s quailing right now, that’s what you can expect. ALP could equal Liberal Lite. Morrison certainly seems to look as if he’s got them wedged because they are responding in a very sotto voce fashion. “You mean we’ve got to say we’d wind back these tax cut gifts? Oh, couldn’t do that. The wealthy might complain.” Got news for Labor. Seneca said that the wealthy are always quick to temper and take it out on their slaves. I think we could see the Roman era being re-enacted contemporaneously and right now. We all know the economic situation will improve on the back of these tax cuts 0.001 of 1% after a decade. They know it’s bullshit too but they’re better pretenders. Johnnie Howard was hopeless but lucky and there are still those who extoll his fantastic expertise. He had it too. Fantastic means based on fantasy. A great pretender. Chutzpah.

  18. helvityni

    Yes Alan Baird, I did not like the Abbot led loud and bullying opposition, but I find that the Labor opposition is too ‘sotto voce’, acting too softly, softly…

    Civility works, buy only if the other side is civil too, and this mob certainly isn’t.

  19. Freethinker

    helvityni, in many cases the ALP is a edge fence seater and we do not in which way they are going to do.
    Having said that, when in doubt I think that in many cases they are going to live legislation put by this government as they are if the win next election blaming the Coalition for the damage impossible to reverse.

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