Fair taxation and the true tax cheats

Recently, Warren Buffet, one of the world’s wealthiest men, shared his opinions about the dangers inherent in the disproportionate hoarding of wealth taking place in America. Buffet, certainly speaking against his own self-interest, said flattening our tax structure is a bad idea.

In Fortune, not a publication given to wealth redistribution, Buffet spoke against the idea of a flat tax on wealth:

“ We have, in my view, a taxation system that’s much too flat already. If you look at the payroll tax—which is over 12% now, and that applies on the first $80,000 or $90,000 of income—Bill [Gates] and I pay practically none of that in relation to our income. For the people that work for us, their tax rate in many cases is the same or even higher than my own, since the rate on capital gains and dividends was cut to 15%. What has gone on in this country in recent years is a huge benefit to the very rich and not that much relief to people down below. Frankly, I think that Bill and I should have a higher tax rate on the income we get. We pay less than half the rate that I was paying 25 years ago when I was making a lot less money. They have really taken care of the rich.”

While Buffet shows an attitude much more common among the wealthy, even in the days of the robber barons, it is becoming extinct amongst the ruling elite. For most, they'd rather skate on paying their share and upholding their responsibilities. To use religious terminology, if one is blessed, they should be willling to accept more of a burden to maintain a semblance of civic health.

We live in an age where anti-tax rhetoric and bluster permeates our culture. To the way of thinking of many on the right (and some calling themselves liberals), government, regardless of the program, is the enemy to many of those shirking their responsibilities to a civil society. In the world of regressive taxation, the argument takes the following tack—government is bad; if it provides support for the poor and marginalized; if welfare is directed towards the poor (since we know the poor are lazy and shiftless), then welfare encourages sloth, which of course, we know that God frowns upon.

Interestingly, in focusing our sights on the issue of welfare, we frequently find most of the greatest abuses are at the corporate level, rather than poor people getting over on the system. Let’s start by looking at corporate welfare versus caring for the needs of the poor. Currently corporate welfare represents a $170 billion payout, compared to the $51 billion that goes to those “cheats” who won’t work. Breaking it down, corporate welfare costs you and I about $1400 per year, while helping the needy costs approximately $400.. Since the 1940s, corporations have paid less and less each year, to where they now pay half percentage wise of what they did 60 years ago. Common sense (which seems to be in short supply) indicates we could pay for the neediest Americans by just having corporations pay what they are supposed to pay.

In a country where so many bask in the glow of our nation’s religious heritage, it's interesting that the Christian religion looks unfavorable on greed and avarice. This contradiction of what religion teaches and America’s economic disparity is telling. One might think a few of our religious leaders and Bible-toting politicians might give us some direction on the matter, rather than rely on Mr. Buffet to talk some sense about the issue. Obviously, in a nation that assigns prestige to the accumulation of wealth, the words of a man of Buffet’s stature carries weight on the subject matter of which he speaks.

Without taking a radical approach at all to wealth redistribution—hell, let’s just start with the rich and corporations paying their fair share—common sense and anecdotal evidence lends credence to the need for government to address the growing income chasm, between the richest Americans and the others across the abyss. A return to a more progressive system of taxation would be one area where government could begin, if they had the will. Instead, the current assortment of scoundrels in Washington continue their reverse Robinhood approach, as they dismantle our nation's social safety net.