Барак Обама - The Audacity of Hope

But even as we make these difficult choices, we should ponder the lesson of the past six years and ask ourselves whether our budgets and our tax policy really reflect the values that we profess to hold.

“IF THERE’S CLASS warfare going on in America, then my class is winning.”

I was sitting in the office of Warren Buffett, chairman of Berkshire Hathaway and the second richest man in the world. I had heard about the famous simplicity of Buffett’s tastes — how he still lived in the same modest home that he’d bought in 1967, and how he had sent all his children to the Omaha public schools.

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 all cuts in spending are equivalent, or that all tax increases are the same. Ending corporate subsidies that serve no discernible economic purpose is one thing; reducing health-care benefits to poor children is something else entirely. At a time when ordinary families are feeling hit from all sides, the impulse to keep their taxes as low as possible is honorable and right. What’s less honorable has been the willingness of the rich and the powerful to ride this antitax sentiment for their own purposes, or the way the President, Congress, lobbyists, and conservative commentators have been able to successfully conflate in the mind of voters the very real tax burdens of the middle class and the very manageable tax burdens of the wealthy.

Nowhere has this confusion been more evident than in the debate surrounding the proposed repeal of the estate tax. As currently structured, a husband and wife can pass on $4 million without paying any estate tax; in 2009, under current law, that figure goes up to $7 million. For this reason, the tax currently affects only the wealthiest one-half of 1 percent of the population, and will affect only one-third of 1 percent in 2009. And since completely repealing the estate tax would cost the U.S. Treasury around $1 trillion, it would be hard to find a tax cut that was less responsive to the needs of ordinary Americans or the long-term interests of the country.

Nevertheless, after some shrewd marketing by the President and his allies, 70 percent of the country now opposes the “death tax.” Farm groups come to visit my office, insisting that the estate tax will mean the end of the family farm, despite the Farm Bureau’s inability to point to a single farm in the country lost as a result of the “death tax.” Meanwhile, I’ve had corporate CEOs explain to me that it’s easy for Warren Buffett to favor an estate tax — even if his estate is taxed at 90 percent, he could still have a few billion to pass on to his kids — but that the tax is grossly unfair to those with estates worth “only” $10 or $15 million.

So let’s be clear. The rich in America have little to complain about. Between 1971 and 2001, while the median wage and salary income of the average worker showed literally no gain, the income of the top hundredth of a percent went up almost 500 percent. The distribution of wealth is even more skewed, and levels of inequality are now higher than at any time since the Gilded Age. These trends were already at work throughout the nineties. Clinton’s tax policies simply slowed them down a bit. Bush’s tax cuts made them worse.

I point out these facts not — as Republican talking points would have it — to stir up class envy. I admire many Americans of great wealth and don’t begrudge their success in the least. I know that many if not most have earned it through hard work, building businesses and creating jobs and providing value to their customers. I simply believe that those of us who have benefited most from this new economy can best afford to shoulder the obligation of ensuring every American child has a chance for that same success. And perhaps I possess a certain Midwestern sensibility that I inherited from my mother and her parents, a sensibility that Warren Buffett seems to share: that at a certain point one has enough, that you can derive as much pleasure from a Picasso hanging in a museum as from one that’s hanging in your den, that you can get an awfully good meal in a restaurant for less than twenty dollars, and that once your drapes cost more than the average American’s yearly salary, then you can afford to pay a bit more in taxes.