Buffet Speaks in Tongues

Like E.F. Hutton, when Warren Buffett speaks, people listen. He has offered his sage advice on market reform, larger economic trends and a host of other issues. Now Buffett has come out of the closet arguing that the super-rich should pay more taxes: Slate Article. “My friends and I have been coddled long enough by a billionaire-friendly Congress,” Buffett wrote in a New York Times op-ed Monday. “It’s time for our government to get serious about shared sacrifice.”

So will Congress listen? Will the super-rich add their voice to Buffett's clarion call for tax reform, which could solve our budget woes and allow us to move onto the more important business of allowing the federal government to try to simulate the economy? One hopes so, but the previous record on these matters has been suspect at best. Back in 2001 when was Bush was suspending the estate tax, many famous wealthy Americans came forward to tell us they were willing to pay these taxes upon their death. But Bush and Congress went forth anyway, and together with the other tax cuts, helped facilitate the current debt crisis we face.

Is there a chance to restore sanity to DC debates? Will corporations ever pay their fair share? One thought I had was a corporate tax structure that rewarded companies for reinvestment in infrastructure and particularly hiring new workers. Rather than allowing the Fortune 500 to continue garnering huge profits without increasing their payrolls, penalize them for their greed and short-sidedness. Rather than continuing to support the absurdly retrograde argument that raising taxes on the wealthiest Americans will hurt the economy, let's laugh off the Laffer Curve once and for all. Rather than demanding that the middle class and poor suffer for the insatiable greed of our most fortunate fathers and mothers, let's allow progressive taxation to create more equity in social, economic and political terms. The reality is that the poor and middle class spend a larger proportion of their disposable income, meaning aggregate demand (aka consumption) will increase and the economy will start to grow again. This can only occur if increase employment (and disposable income).

After the Great Depression, as I've written before, there appeared to be a consensus that corporate leaders needed to sacrifice to ensure the long-term stability and prosperity of America. For the past 30 years, that consensus has been chipped away at, replaced by the idea that greed and self-interest should be the raison d'etre of all Americans. Taxes have become the bete noire of not only the right, but the center disabling the power of the government to intervene when greed overwhelms the law and reason and corporate frugality undermines economic growth. Today we need to restore order, restore the notion that there is not only freedom but responsibility in a democratic society. Without responsibility and obligation, we move closer and closer to fascistic anarchy every day ...