Monday, August 15, 2011


Don't get your hopes up about the impact of Warren Buffett's New York Times op-ed "Stop Coddling the Super-Rich." It doesn't matter that his points are made in a compelling fashion:

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn't refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain. 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.

It doesn't matter that what he writes is directly relevant to Topic One in our current domestic debate. It doesn't matter that he know more about how to getting rich in this country than the entire Ayn Rand Fan Club that is the modern GOP.

You know how your e-mail program has a spam filter? Our political discourse has a similar filter -- it's a liberalism filter. And that's "liberalism" broadly defined. Buffett's op-ed will go straight into that filter because (a) he's said this kind of thing before on many occasions and (b) he was an Obama supporter in 2008, so even though he embodies capitalist success, he's not deemed a "real" capitalist.

Oh, I forgot (c): the right has a simple, knee-jerk response to any call by the wealthy to raise taxes on their own class: Well, if you feel that way, rich guy,nobody's stopping you from from writing a big check to the Treasury voluntarily. Doug Bandow dishes out the boilerplate at The American Spectator's blog:

But if this is true, why do Buffett and the other rich people so ready to pay more have to be told to pay more? Why don't they just pay more on their own?

(In answer to that: um, why do you people at the Spec put a price on your magazine? Why don't you just tell your readers that they ought to know how much it's worth and pony up voluntarily? What, are you afraid your most loyal subscribers would stop paying if you told them they didn't have to? Funny how that works.)

Buffett will get a little attention for this, and then what he's saying will disappear into the memory hole, as it's disappeared every other time he's said it. If he wants to have some impact, he needs to bring together (or someone needs to bring together) a much larger group of rich people -- including people who aren't associated with what are regarded as hippy-dippy notions of business virtue (so no Ben & Jerry, and no Howard Schultz of Starbucks, who's getting a similar fleeting bit of attention with a campaign to stop donations to politicians by his fellow rich people). The group needs to include some right-wing hard-asses. Ideally, it would be the whole freaking Chamber of Commerce, or a majority of the Fortune 500 CEOs.

I'm naturally pessimistic, and I hope I'm wrong about this. But I've heard Buffett say this too many times in the past, to no effect. I've heard it from Bill Gates Sr. as well. If it somehow hits a nerve this time, then I guess doing the same thing repeatedly and expecting a different result isn't always insanity.

1 comment:

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