would take 17 Donald Trumps to match the $43 billion net worth of investor
guru Warren Buffett, the world’s second richest man. When it comes to
federal taxes, though, Buffett pays about the same rate as his office
“I pay a somewhat higher [federal tax] rate for my combination of salary, investment and capital gain income than our receptionist does,” Buffett wrote last year, “But she pays a far higher portion of her income in payroll taxes than I do.”
If President Bush’s tax cuts for the wealthy keep moving forward, the receptionist will pay a higher overall tax rate than her boss. She already pays a higher rate in state and local taxes. In Nebraska, home of Buffett’s firm, Berkshire Hathaway, the richest 1 percent of families effectively paid 6.4 percent of their income in state and local taxes in 2002, the middle 20 percent of families paid 9.8 percent and the bottom 20 percent paid 10.2 percent, reports the Institute on Taxation and Economic Policy.
In Bush’s home state Texas, taxes are even more regressive: the richest 1 percent paid just 3.2 percent of their income in state and local taxes, the middle fifth paid 8.2 percent and the poorest fifth paid 11.4 percent--more than three times the rate of the rich.
Criticizing tax breaks for large investors and corporations, Buffett recently told Berkshire Hathaway shareholders, “If class warfare is being waged in America, my class is clearly winning.”
Bush’s tax policies are slashing taxes on dividends, capital gains and estates, with most of the benefits going to the richest 1 percent.
Do you want an America where soldiers and teachers pay a larger share of their incomes in taxes than the laziest heirs of the wealthy living off inherited investments?
Bush surrounded himself with middle-class families to launch his tax cut campaign in 2001. When a reporter asked why no one was representing the top bracket, Bush laughingly replied, "I beg your pardon. I'm representing...the top tax bracket.”
George and Laura Bush reported income of $822,126 on their 2003 tax return, putting them in the top 1 percent. Dick and Lynne Cheney topped the Bushes with $1,900,339, including $627,005 in tax-exempt interest on municipal bonds and $178,437 in deferred compensation from Halliburton.
Administration tax policies have been good for them, but not for the country.
While Warren Buffett has a golden track record, Bush has a reverse Midas touch, transforming surplus into debt. Under Buffett, Berkshire Hathaway’s per-share book value grew from $19 in 1965 to $50,498 in 2003, a rate of over 22% compounded annually--about twice the rate of the S&P 500 stock index. Under Bush, the federal budget reversed course from a projected 2002-2011 surplus of $5 trillion to a projected deficit of more than $4 trillion, the Center on Budget and Policy Priorities reports.
Federal tax revenues have fallen to their lowest level as a share of the economy since 1950. We can’t have a 21st century country with 1950 tax revenues.
The average 2004 tax cut for the richest 1 percent--$59,292--is more than the typical firefighter, registered nurse, environmental scientist, social worker or police officer makes in a year.
The average top 1 percent tax cut can pay for a gold watch and a Hummer H2, at a time U.S. soldiers are dying in Humvees in Iraq.
If extended, already enacted tax cuts for the richest 1 percent will cost the treasury more than $1 trillion between 2001 and 2010. Those lost revenues won’t go to schools, homeland security, health care, research, small business development or renovating the aging infrastructure built with the tax dollars of prior generations. Bush wants even more tax cuts.
Next time you drink safe water from your faucet, send your kids to school, cross a bridge, use a park or library, or call 911, remember this--if we want public services and infrastructure, we have to pay for them. The rich already pay a smaller share of income than everyone else in state and local taxes. Do you want that at the federal level?
If you want taxation with representation, now's the time to make yourself heard.
Holly Sklar is coauthor of Raise the Floor: Wages and Policies That Work for All Of Us (www.raisethefloor.org). For reprint permission and other correspondence, contact: email@example.com. Distributed by Knight Ridder/Tribune News Service © Copyright 2004 Holly Sklar.
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