The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [439]
Paul Newman, Bill Gates Sr., George Soros, a smattering of Rockefellers, and nearly two hundred other rich and influential people agreed and signed a petition published in the New York Times that opposed Bush’s plan to eliminate the estate tax.29 Buffett didn’t join the petition because he thought it did not go far enough. He thought that rich people were lucky and blessed, and they should pay taxes. “I don’t believe in dynasties,” he said. Repealing the estate tax would be like choosing the nation’s Olympic teams from the children of past Olympic champions, he added.30
“Wealth is just a bunch of claim checks on the activities of others in the future. You can use that wealth in any way you want to. You can cash it in or give it away. But the idea of passing wealth from generation to generation so that hundreds of your descendants can command the resources of other people simply because they came from the right womb flies in the face of a meritocratic society.
“I’d have a higher tax at the higher levels of wealth. I wouldn’t mind having no tax up to a point and then a hundred percent tax for an estate over a hundred and fifty million dollars.
“The most important thing is to ask, ‘And then what?’ If you eliminate the twenty billion dollars or so raised by the estate tax, you’ve got to make the money up by taxing everybody else somehow. It’s amazing how hard the American population will fight for the families of those few thousand people who pay large estate taxes and for the whole rest of the country to pay for it out of their own pockets.
“I don’t like anything that, in effect, creates a residue of humanity. I don’t like a tax system that goes in that direction; I don’t like an educational system that goes in that direction. I don’t like anything where the bottom twenty percent keep getting a poorer and poorer deal.”
But the debate over estate taxes turned shrill and bitter. Buffett was portrayed as a silver-spooned populist, a rich old crocodile who was trying to keep the next generation from bootstrapping its way to success in the classic American entrepreneurial manner.31
“Dynastic wealth turns a meritocracy upside down,” he wrote to Senator Ken Salazar. “In effect it says that the people who should allocate the resources of this country should be the descendants of those who excelled in amassing resources long ago.”32
Subtly or not, the estate tax feud was informed by the issue of Buffett’s own money. Some people called rich guys like Buffett tax-dodgers, because they had amassed their money through lightly taxed investments. But to say that Buffett invested to dodge taxes was like saying that a baby drank its bottle to fill its diapers. Indeed, Buffett was the first to say that the tax on investments was unfairly low. In fact, this was another of his causes. He liked to compare his tax rate to his secretary’s, pointing out how unjust it was that she paid a higher tax rate on her income than he did, just because most of his income came from investing.
Having already angered all the plutocrats and would-be plutocrats, but with his credibility at a peak in other quarters, Buffett vowed to carry on the fight against repeal of the estate tax, and would spin on this subject for years. He spoke again on another subject to the Democratic Policy Committee just days before the first shots were fired in the Iraq War in 2003. He said that President Bush’s plan to cut taxes on dividends was more “class welfare for the rich.” In the Washington Post, he wrote about “Dividend Voodoo,” noting again that his tax rate was lower than Debbie Bosanek’s. The reaction from conservatives against yet another of Buffett’s populist manifestos was swift and savage. “Millionaires are seething at Warren Buffett’s betrayal of their class,” said one.33
That, of course, was his point. He felt that the United