Warren Buffett, Spin-master Extraordinaire

There has been a lot said recently about Warren Buffett's pro-environmental investments and pronouncements; he's being hailed as an altogether admirable figure, a green-friendly philanthropist.  In this article on Bloomberg in 2012, (http://www.bloomberg.com/news/2012-04-02/buffett-says-shortcuts-on-environment-can-risk-profits.html)  he said, “A company must invest in the key ingredients of profitability: its people, communities and the environment."

Sounds great, doesn't it?  But I've just been reading in Sierra magazine about Buffett's ANTI-environmental choices, the ones he doesn't say much about:  http://www.sierraclub.org/sierra/201305/warren-buffett-coal.aspx.  He is heavily invested in coal:  his MidAmerican Energy Holdings "relies on coal for roughly half of its 18,000-megawatt generating capacity".  In addition, Buffett's Burlington Northern Sante Fe (BNSF) Railway Company earns $5 billion in annual revenues from transporting coal, and it lobbies aggressively on the industry's behalf.

Buffett's BNSF Railway Company is also a 1/3 owner in the proposed Tongue River Railroad, which is currently slated to be built in Southeastern Montana.  Needless to say, the ranchers and Native Americans and Amish farmers who currently live in the area are not happy about it.  But there aren't many of them, and they are easy to miss.  What is also easy to miss, is that the 42-mile railroad will ultimately enable Buffett's company to ship coal to China via the West Coast.  This is significant, because US demand for coal is dropping, and Buffett sees China as his new market. 

The new railroad will also make it possible for  Arch Coal, one of America's largest coal companies, to stripmine the nearby Otter Creek coal tracts, thereby creating one of the largest coal stripmines in the country.

Railroads may be a great form of "green" transportation, as Buffett also pointed out in the article... but NOT when they're shipping coal. That's about as environmentally-UNconscious, and as cynical, as anything I've ever heard of.

Buffett is NOT, ultimately, a green-investment hero. He's a personable ultra-capitalist, who has a way with words.  And ultimately, he is just one more amoral self-promoter, a large and extremely successful corporate shark, out to make all the money he can, and never mind the lives and homes and lands that are devastated in his wake  He may be better than some... but only because that bar is set so very, very low.

Why Bill Gates Laughs at the IRS

The tax situation today resembles that in France before the French revolution. Commoners had little enough to call their own, but what little they had was taken in taxes. The nobility had nearly all the wealth but were exempt from taxes. So today, the top 20% who own 80% of the wealth in this country pay almost no taxes on it. They pay income taxes, but this only exposes their income, not the wealth itself.

Take a single example. Warren Buffet is worth about $58 billion, yet his salary is only $100,000 per year. The federal income tax on his salary is about $38,000. In 1956, Buffett was worth less than $1 million. So his average increase in wealth over his lifetime has been $58 billion divided by 52 (2008 - 1956), or approximately $1 billion per year. If the increase of wealth were counted as income, his income tax rate is $38,000 divided by $ 1 billion, or about .0001%. Why should a man of great wealth, like Mr. Buffett be paying only .0001% of his annual increase in wealth when the average person in the lowest quintile, the poorest 20% of the population, pays 11% of income in taxes (state, local, sales, property, etc.)?

It is fun to fantasize about the wealth these people possess, but why should they pay no taxes at all when the rest of us pay so much? The reason is that the wealthy are able to control both tax policy and public opinion much more effectively than the French nobility of the ancien regime. The idea of taxing wealth itself is seldom heard in the public forum. People are convinced, not only that capitalism is a great good, but that concentration of capital in a few hands is also beneficial. The two ideas are not inseparable.

Conservatives protest that they shouldn't have to give up what they have attained and have it given to someone else. This is the basis of all taxation, so the argument could also be used to abolish all taxes. But modern states have become larger for a reason. They are like fish swimming in a tank with other fish. Bigger fish thrive. Smaller fish get eaten. So the government supported by taxes provides protection to the wealthy, by monetary policy, military defense, treaties on trade, the list goes on and on. In fact, the wealthy receive services from the government in proportion to the size of their fortunes. The more they have, the more they have to lose. They should be taxed accordingly.