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.
”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.”
”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.