The Audacity of Hope - Barack Obama [90]
Still, I had been a little surprised when I walked into a nondescript office building in Omaha and entered what looked like an insurance agent’s office, with mock wood paneling, a few decorative pictures on the wall, and no one in sight. “Come on back,” a woman’s voice had called out, and I’d turned the corner to find the Oracle of Omaha himself, chuckling about something with his daughter, Susie, and his assistant, Debbie, his suit a bit rumpled, his bushy eyebrows sticking out high over his glasses.
Buffett had invited me to Omaha to discuss tax policy. More specifically, he wanted to know why Washington continued to cut taxes for people in his income bracket when the country was broke.
“I did a calculation the other day,” he said as we sat down in his office. “Though I’ve never used tax shelters or had a tax planner, after including the payroll taxes we each pay, I’ll pay a lower effective tax rate this year than my receptionist. In fact, I’m pretty sure I pay a lower rate than the average American. And if the President has his way, I’ll be paying even less.”
Buffett’s low rates were a consequence of the fact that, like most wealthy Americans, almost all his income came from dividends and capital gains, investment income that since 2003 has been taxed at only 15 percent. The receptionist’s salary, on the other hand, was taxed at almost twice that rate once FICA was included. From Buffett’s perspective, the discrepancy was unconscionable.
“The free market’s the best mechanism ever devised to put resources to their most efficient and productive use,” he told me. “The government isn’t particularly good at that. But the market isn’t so good at making sure that the wealth that’s produced is being distributed fairly or wisely. Some of that wealth has to be plowed back into education, so that the next generation has a fair chance, and to maintain our infrastructure, and provide some sort of safety net for those who lose out in a market economy. And it just makes sense that those of us who’ve benefited most from the market should pay a bigger share.”
We spent the next hour talking about globalization, executive compensation, the worsening trade deficit, and the national debt. He was especially exercised over Bush’s proposed elimination of the estate tax, a step he believed would encourage an aristocracy of wealth rather than merit.
“When you get rid of the estate tax,” he said, “you’re basically handing over command of the country’s resources to people who didn’t earn it. It’s like choosing the 2020 Olympic team by picking the children of all the winners at the 2000 Games.”
Before I left, I asked Buffett how many of his fellow billionaires shared his views. He laughed.
“I’ll tell you, not very many,” he said. “They have this idea that it’s ‘their money’ and they deserve to keep every penny of it. What they don’t factor in is all the public investment that lets us live the way we do. Take me as an example. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless. I can’t run very fast. I’m not particularly strong. I’d probably end up as some wild animal’s dinner.
“But I was lucky enough to be born in a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the financial system to let me do what I love doing—and make a lot of money doing it. The least I can do is help pay for all that.”
It may be surprising to some to hear the world’s foremost capitalist talk in this way, but Buffett’s views aren’t necessarily a sign of a soft heart. Rather, they reflect an understanding that how well we respond to globalization won’t be just a matter of identifying the right policies. It will also have to do with a change in spirit, a willingness to put our common interests and the interests of future generations ahead of short-term expediency.
More particularly, we will have to stop pretending that