The Sage of Omaha has invested his own money in an ailing US bank, but all our mega-rich do is complain about income tax
Warren Buffett, much admired in the US both for his genius at making money and for his willingness to give it away, has put the cat among the pigeons by demanding that the mega-rich be asked to pay more in taxes. "Our leaders have asked for 'shared sacrifice'," he wrote in the New York Times last week. "But when they did the asking, they spared me." "While the poor and middle-class fight for us in Afghanistan, and while most Americans struggle to make ends meet," he went on, "we mega-rich continue to get our extraordinary tax breaks ... 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." Saying that most employees in his investment company paid income tax at more than twice the rate that he did, Buffett said that he had been "coddled long enough by a billionaire-friendly Congress" and that the tax rates for the rich should be increased.
This caused a rumpus, with strident arguments between left and right about the likely economic effects of Buffett's proposal. He had already rejected the charge that it would deter the rich from investing and thus put economic recovery at risk; but others continued to say it would, while at the same time having minimal impact on the budget deficit. Some, like Conrad Black, preparing to resume his prison sentence in America for fraud, accused Buffet of engaging in a dishonest PR exercise. "He knows what he is saying is bunk," he wrote in New York's rightwing National Review. For Black, Buffett is a hypocrite: "His years of padding around university campuses with Bill Gates in their corduroy trousers and Viyella shirts explaining that they weren't really interested in money were hard enough to take, but this next act, solo, as a slimmed-down Santa without beard, sleigh, or red uniform is wearing thin."
It seems a bit hard on Buffett to accuse him of cheap PR tactics. On Wednesday he was lauded for helping to stabilise a struggling US institution after he announced a $5bn investment in Bank of America. He has also committed most of his vast fortune towards doubling the wealth of the Bill and Melinda Gates Foundation, ensuring that it will have some $60bn set aside "to reduce inequities and improve lives". That Buffett and Gates believe in the American ideal of a meritocratic society is also shown by their opposition to Republican proposals to abolish death duties, for neither believes that his children should start out too rich. I feel for them as they struggle to reconcile this ideal with their own unimaginable wealth.
Buffett's lead was followed this week in France, where 16 billionaires also demanded to pay more tax to help the country out of its economic difficulties. "When the government is asking everyone to make an effort of solidarity, we feel we must contribute," they said. Of course, their motives were doubted. "They understand that if they do nothing, they will be criticised, so they are taking preventative measures," said one French trade union leader. But however motivated, such a gesture on the part of the mega-rich suggests that they are at least aware of their good fortune. For some reason, this is not an awareness that seems to have spread to the British plutocracy. Far from offering to pay more taxes, all we hear from them is grumblings that we will all be doomed unless the present 50% top marginal rate of income tax is reduced.
A recent study contained interesting insights into the psychology of the rich. It found that they were generally less empathetic, less altruistic and more selfish than the poor. "We have done 12 separate studies measuring empathy in every way imaginable, social behaviour in every way, and some work on compassion, and it's the same story," said psychologist Dacher Keltner. "Lower-class people just show more empathy, more pro-social behaviour, more compassion, no matter how you look at it." In videos of conversations, he found that rich people were more likely to appear distracted, doodle, avoid eye contact and so on; while poor people made eye contact and nodded their heads frequently to show they were listening.
Electrodes on their chests also showed that they had a much more intense emotional response to pictures of starving children than rich people did. Keltner put this down to an "ideology of self-interest" in the American upper class. They tended to take personal credit for their financial success, believing they had achieved it all on their own without help from the government or anyone else. Poor people, on the other hand, knew that they depended on others for survival, which was why they showed more concern for other people and gave more to those in need.
These judgments seem to me to apply even more strongly to the rich in Britain than to those in America, many of whom feel, like Andrew Carnegie, "that huge fortunes that flow in large part from society should in large part be returned to society". British billionaires tend to be too disconnected from the rest of society and generally out of sympathy with it. They are also loth to admit that luck has played any part in their achievement, whereas Buffett has said that he got rich not "because of any special virtues of mine or even because of hard work, but simply because I was born with the right skills in the right place at the right time".
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Source: http://www.guardian.co.uk/commentisfree/2011/aug/25/warren-buffett-british-billionaires
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