Ben Stein (yes, that one) recently sat down with one of the richest men in the world and discussed wealth, the rich and the war on the working class in this country.
Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.
It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesnÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢t use any tax planning at all. He just pays as the Internal Revenue Code requires. ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œHow can this be fair?ÃƒÂ¢Ã¢â€šÂ¬Ã‚? he asked of how little he pays relative to his employees. ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œHow can this be right?ÃƒÂ¢Ã¢â€šÂ¬Ã‚?
Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œThereÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s class warfare, all right,ÃƒÂ¢Ã¢â€šÂ¬Ã‚? Mr. Buffett said, ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œbut itÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s my class, the rich class, thatÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s making war, and weÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢re winning.ÃƒÂ¢Ã¢â€šÂ¬Ã‚?
So why are they winning? As if you even have to ask…
Another argument was that raising taxes actually lowers total revenue, and that only cutting taxes stimulates federal revenue. This is supposedly proved by the history of tax receipts since my friend George W. Bush became president.
In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill ClintonÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s merry rule. It fell to a low of $794 billion in 2003 after Mr. BushÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again.
By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible.
A great article and some needed reality in these fiscally irresponsible times.