People obsessing over Warren Buffett’s comments on CNBC today are focusing on the wrong Warren Buffett interview. These remarks from Buffett, on CNN this morning, are far more significant:
QUESTIONER: Are you happy seeing your suggestion, this new Buffett Rule, becoming more of a basis of a political battle that really has turned into class warfare?
BUFFETT: Actually, there’s been class warfare going on for the last 20 years, and my class has won. We’re the ones that have gotten our tax rates reduced dramatically.
If you look at the 400 highest taxpayers in the United States in 1992, the first year for figures, they averaged about $40 million of [income] per person. In the most recent year, they were $227 million per person — five for one. During that period, their taxes went down from 29 percent to 21 percent of income. So, if there’s class warfare, the rich class has won.
E.J. Dionne wrote the other day that conservatives despise Buffett because he’s telling the truth about the lower tax rates the rich pay on their investments — and worse, he’s insisting that this is fundamentally unfair. As Buffett did above yet again, he’s giving away the game.
Indeed, what the cries of “class warfare” really show is that Buffett has succeeded in forcing a national conversation about the regressive aspects of our tax system. This latest claim — that the real class warfare has actually been waged downwards, to great success — is another welcome addition to this debate.
By the way, in the CNN interview, Buffett also said something else that should put a serious dent in claims that Buffett broke with the “Buffett Rule” today: Speaking about his desired program, he said:
It’s not a tax on all millionaires or ten-millionaires or anything like that. It’ll only be a minimum tax on people who make lots of money and pay very low tax rates at the same time. Anybody who is paying normal tax rates, it wouldn’t touch; in aggregate, there’s probably 50,000 people in the whole United States out of 310 million that it would affect.
In other words, Buffett’s proposal would apply to some millionaires.
Some on the right are pointing to Buffett’s claim in his earlier CNBC interview that he would only raise taxes on the “ultra rich.” They say this shows he’s breaking with Obama, who wants to raise them on some who maks $1 million or more. But as the CNN interview suggests, he does seem to see the threshold as being $1 million.
I think it’s fair to press Buffett’s office for further clarification on this point. After all, the White House has estimated that the Buffett Rule would impact fewer than 450,000 taxpayers, while Buffett puts the number at 50,000. That disparity could use some clarification. But still, there’s simply no grounds to say that Buffett has disavowed Obama’s version of the Buffett principle.
More broadly, Buffett agrees with Obama — if there’s been any class warfare in this country, it has been waged from the top down for decades, and the rich have won. And the Buffett Rule would be a step towards putting things right: