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Greed vs. Tragic Ignorance: Warren Buffett Agrees

An Inhumane Tax Code & an Unethical Congress

The tax code is very inefficient. Both the personal tax code and the corporate tax code. By closing

loopholes and lowering rates, you could increase the efficiency of the tax code

and create more incentives for people to invest.

BEN BERNANKE

(U.S. Federal Reserve Chairman)

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This blog is designed to speak to the conscience, pragmatic proclivities of the highly responsible voter; truly open-minded, intellectually curious, economically disadvantaged and/or destitute (like the writer), or for the rich and privileged alike: anyone in search of like-minded Americans and/or global citizens who understand the self-destructive fallacy that is US vs. THEM thinking and/but are ethical enough to see past the spin (and obscure websites from which no intelligent person should ever get their "news"), so as to appreciate the inhumane Tax Code & an unethical Congress that indeed has contributed to America's current economic insecurity.

 

 

Ideas abound on fixing America's big problems but so does lawyers, lawmakers and obstructionism obsessed with seeing President Obama wind up as a "one-term president", whatever its strategic benefit to an economically diminished superpower. And therein lies the tragedy and lack of foresight. In U.S. presidential candidate Rick Perry's Texas, Paul Krugman is worried that the poorest 40 percent of Texans pay disproportionately more than the national average.

 

 

That right there, is America's future and national security.

What is ethical about that? How many Financial Crises do we need before we confront greed?

 

 

Academic debates don't pay bills. That's why I have no interest in them unless I'm being paid. Nor am I interested in the "anger" of privileged people oblivious both of their status and the plight of the poor (in America). What I am interested in is moral pragmatism, by which I mean bringing a matter-of-fact, humble, but solutions-oriented approach guided by principles of fairness (not dogma) in resolving problems such that decisions and outcomes are as ethical as possible.

 

 

The reader will therefore be well-advised to bear in mind at the outset, that this blog concerns a certain 99.7% of Americans who albeit patriotic, often remain or practice political apathy or detrimental ignorance that continue to debilitate the nation as more and more either incompetent and/or out of touch lawmakers that sleep unethically with special interest and the super-rich (nothing wrong with being legally super-rich), are voted into or kept in office. Consequently, that keeps the bottom 99% mired in hopeless destitution. Meanwhile, many have the audacity to cry foul when so-called LDCs (less developed countries) or Third World countries as well as economically better off totalitarian regimes do the same.


 

Reform of America's Tax code (which punishes the poor as shown in the case of Texas right below) has been long overdue for years. Blocked by what Warren Buffett (infra) rightly calls a "a billionaire-friendly Congress" time and again, America has driven herself into political imbecility with apathetic voters (comprising mosly the 99%) unaware.

Particularly, in the last decade.

 

 

Even the religious and rich have benefited from this manufactured, legislature-sanctioned fraud. And although the way the U.S. Constitution works is easy to study and understand, I have found that fringe elements committed to ignorance who don't understand what the Legislature is supposed to do within a democracy, however dysfunctional, often succumb to a syndrome I alluded to in my last blog, informally termed Six Degrees to I-hate-Obama. By which I mean, bigots' newfound internet pastime of finding a million ways to trace totally unrelated and related issues (including America's recent economic woes) back to a so-called "black", "different", "elitist", "Muslim" (an issue not worth revisiting) U.S. president, for blame. And so do, opponents set on ensuring he fails as a "bad" and "one-term president". This, at a time when pragmatists would argue it is foolish and even anti-American to believe one can love and want to see America succeed while supporting initiatives aimed at sabotaging the country economically.

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Americans generally get a few things though. See below, Slide #6-8, and resoundingly: #17, which billionaire investor and chairman/chief executive of Berkshire Hathaway Warren Buffett, echoes below. But other than that, the political brinkmanship that led S&P (Standard & Poors, see Slides #11-14) to downgrade America's long-held 'AAA' Credit Rating — while frustrating for most Americans (14million of whom are unemployed) paying attention — is unlikely to shake the dangerous ignorance and apathy off the electorate's faces. Until then, even Warren Buffett's words below (excepted and rearranged from his New York Times August 14, 2011 OP-ED piece), may fall on deaf ears.

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Friends who recently solicited my thoughts on what is happening in America, were unsurprised. The politics I practice (local and geo) is painstaking, detail-oriented, shamelessly boring, but uncompromisingly pragmatic. And like water and oil, it does not mix well with ignorant, rancorous impudence.

 

 

I have been doing my Politics homework since I was a kid. And people will tell you this, that and the other is "boring".

 

But from MTP (Meet the Press) to Face the Nation to C-SPAN, to MSNBC, CNBC, to the NYT, the Economist, ABC, CBS to BBC and CNN, I believe responsible citizens closely follow, watch, read, or listen to all well-researched programs with the full focus and attention span of one meditating or intent on not fighting the Distracted-by-everything syndrome I've written about, the object being: to build what I call an essential broad background knowledge base that then informs their judgement.

 

 

Whether one is an Independent, Democrat, Republican (or a well-meaning Tea bagger), it is easy to see who has America's best interest at heart. And it is not a matter of political party affiliation but rather (C-SPAN type) facts-based, verifiable, "boring" but rewarding responsible citizenship and action, voting included. And what elected politicians do once sent to Washington; whether they cower to special interest groups at the expense of the 99%; what associations and deals they strike; who suppresses or attempts to suppress (infra) otherwise ethical, pragmatic and/or cost-effective initiatives, all that is telling.

 

 

As a responsible citizen, I do not *currently* regard Tea baggers or Republicans who do not understand the simple ethics of Warren Buffett's argument and proposed solution below, as interested in America's economic security. I see them and evidence of their greed as a reason for America's decline. And the numbers above and below, which tell both the story of how we got here and how we can get ourselves out (through fairness in politics and lawmaking), don't lie.

 

 

The S&P even sat with Tea baggers and tried to explai n the importance of raising the Debt Ceiling lest America lose its AAA standing. They didn't care, or get it. All they appeared focused on is ensuring a man they strongly dislike is a one-term president. US vs. THEM thinking? Pragmatists who get the The Haves & Have Nots dimension of America's current economic security crisis can judge for themselves. Well thought out "blame", unless efficiently coordinated, channeled, timed, and placed, also is futile. That's why you'll never catch me being ashamed of my country, reluctant to return to America due to the current situation, politically apathetic, or even in awe of Americans (whatever their ancestry or ethnic origin) who look down on "immigrants". I am (proud to say) an American by nationality, a global citizen by culture, a human being by memory and dignity; a humanitarian, flawed moralist, social critic and a disciplinarian by principle; a Christian (Scientist) by religion, uncategorizable by nature, beloved of God, and yet unshielded from the ignorance and stupidity of men. I will never be a hyphenated American. Never accept that intellectually and morally troubling label and its socio-economic consequences rife with newfangled bigotry, racism and suppression, President Obama being one among many victims.

 

 

Anybody who coercively or covertly suppresses your right to develop, improve or be legally happy, free, or self-sufficient is more appropriately deserving of the title, "enemy" or "foe". Not friend. And that's where the tragic ignorance of many Americans begin.

○ ○ ○Without a strong 'body of knowledge' the more time we spend looking at things on screens, the less smarter

we become...Finding information on computers is important only if you have a 'body of knowledge' that

enables you to judge what is true and what is not...Rampant ignorance and a positive contempt for

evidence exists...You can't depend on your judgment [or eyes] when your imagination is

out of focus...The perfect sucker understands that pigs can stare at pearls but

doesn’t realize he can be in an analog situation...

Meaning is the enema of information.

SUSAN JACOBY | MARK TWAIN | CRAIG SILVER

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Warren E. Buffett

(in his own words)

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My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice. While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.

 


Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15% tax rate. Others own stock index futures for 10 minutes and have 60% of their gain taxed at 15%, as if they’d been long-term investors.


 

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.


 

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% in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.

 

 

Our leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.


 

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.


 

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.


 

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4% of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33% to 41% and averaged 36%.


 

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.


 

To understand why, you need to examine the sources of government revenue. Last year about 80% of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15% on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15% and 25% income tax brackets, and then are hit with heavy payroll taxes to boot.


 

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2% on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5%.


 

The taxes I refer to here include only federal income tax...In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest...


 

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into
hopelessness. That feeling can create its own reality.


 

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7% of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.


 

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

 

 

 

This blog is part of the no nonsense series

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PEACE

TT

F I N I S

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Tags: America, Beijing, Ethics, Fairness, Greed, Ignorance, Jobs, Politics, Poor, Rich, More…Special Interest, Super-rich, Tax, Tea Party, USA, Voters

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