Saturday, June 18, 2005
WARREN BUFFETT, LOU DOBBS: It's class warfare, the wealthy are winning. They shouldn't be.
Originally uploaded by greatwhitebear70.
After Microsoft founders Bill Gates and Paul Allen, Warren Buffet is the wealthiest man in the country. Lou Dobbs is Financial Analyst for CNN. In this excerpt from a conversation between the two, they make clear their disdain for the economic and tax policies of the Bush Administration. Both go as far as accusing the powers that be of waging class warfare against working people.
DOBBS: Are you surprised when you focus on the two deficits we just talked about, the trade deficit, and the budget deficit? The budget deficit is 3.6 percent of our GDP. The trade deficit is reaching just almost 6 percent of GDP. And the president is talking about reforming Social Security. Does that surprise you?
BUFFETT: Well, it's an interesting idea that a deficit of $100 billion a year, something, 20 years out, seems to terrify the administration. But the $400-plus billion dollars deficit currently does nothing but draw yawns. I mean the idea that this terrible specter room looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me.
DOBBS: In point of fact, the Congressional Budget Office, which is considered to be the bipartisan objective standard of such things, has research that suggests that the deficit in Social Security would be only 0.4 percent of our GDP over 75 years as compared to the other large deficits percentages that associated with trade in the budget deficit. Do you have, we're talking about fixing the fixes we're in, a quick answer for Social Security?
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: It's 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, it's $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: I think the climate has been changed on that for the better, Lou. Mae West said, "I was Snow White but I drifted." Well, I think corporate America drifted some. But I literally think what has happened has changed the culture somewhat, and for the better. I think that's probably more important than the laws.
DOBBS: Yet we hear the Business Roundtable, the U.S. Chamber of Commerce, whining that it's so onerous, so difficult to obey the law and to meet these regulations. What's your reaction?
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?
See the entire conversation HERE
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