Ben Stein on Class Warfare - XDTalk Forums - Your HS2000/SA-XD Information Source!

Mark S. · 11-27-2006, 02:06 PM

Ben Stein is a pretty well-known conservative economist and commentator.

November 26, 2006
Everybody's Business
In Class Warfare, Guess Which Class Is Winning

By BEN STEIN
NOT long ago, I had the pleasure of a lengthy meeting with one of the smartest men on the planet, Warren E. Buffett, the chief executive of Berkshire Hathaway, in his unpretentious offices in Omaha. We talked of many things that, I hope, will inspire me for years to come. But one of the main subjects was taxes. Mr. Buffett, who probably does not feel sick when he sees his MasterCard bill in his mailbox the way I do, is at least as exercised about the tax system as I am.

Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.
Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.
“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

This conversation keeps coming back to mind because, in the last couple of weeks, I have been on one television panel after another, talking about how questionable it is that the country is enjoying what economists call full employment while we are still running a federal budget deficit of roughly $434 billion for fiscal 2006 (not counting off-budget items like Social Security) and economists forecast that it will grow to $567 billion in fiscal 2010.

When I mentioned on these panels that we should consider all options for closing this gap — including raising taxes, particularly for the wealthiest people — I was met with several arguments by people who call themselves conservatives and free marketers.

One argument was that the mere suggestion constituted class warfare. I think Mr. Buffett answered that one.

Another argument was that raising taxes actually lowers total revenue, and that only cutting taxes stimulates federal revenue. This is supposedly proved by the history of tax receipts since my friend George W. Bush became president.

In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill Clinton’s merry rule. It fell to a low of $794 billion in 2003 after Mr. Bush’s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again.

By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible.

The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.”

The sad fact is that spending rises every year, no matter what people want or say they want. Every president and every member of Congress promises to cut “needless” spending. But spending has risen every year since 1940 except for a few years after World War II and a brief period after the Korean War.

The imperatives for spending are built into the system, and now, with entitlements expanding rapidly, increased spending is locked in. Medicare, Social Security, interest on the debt — all are growing like mad, and how they will ever be stopped or slowed is beyond imagining. Gross interest on Treasury debt is approaching $350 billion a year. And none of this counts major deferred maintenance for the military.

The fourth argument in response to my suggestion was that “deficits don’t matter.”

There is something to this. One would think that big deficits would be highly inflationary, according to Keynesian economics. But we have modest inflation (except in New York City, where a martini at a good bar is now $22). On the other hand, we have all that interest to pay, soon roughly $7 billion a week, a lot of it to overseas owners of our debt. This, to me, seems to matter.

Besides, if it doesn’t matter, why bother to even discuss balancing the budget? Why have taxes at all? Why not just print money the way Weimar Germany did? Why not abolish taxes and add trillions to the deficit each year? Why don’t we all just drop acid, turn on, tune in and drop out of responsibility in the fiscal area? If deficits don’t matter, why not spend as much as we want, on anything we want?
The final argument is the one I really love. People ask how I can be a conservative and still want higher taxes. It makes my head spin, and I guess it shows how old I am. But I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change?

Oh, now, now, now I recall. It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong?

THIS brings me back to Mr. Buffett. If, in fact, it’s all just a giveaway to the rich masquerading as a new way of stimulating the economy and balancing the budget, please, Mr. Bush, let’s rethink it. I don’t like paying $7 billion a week in interest on the debt. I don’t like the idea that Mr. Buffett pays a lot less in tax as a percentage of his income than my housekeeper does or than I do.

Can we really say that we’re showing fiscal prudence? Are we doing our best? If not, why not? I don’t want class warfare from any direction, through the tax system or any other way.
Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.

xd4life · 11-27-2006, 04:08 PM

I hate to say it but it's the truth. You can't balance the budget if you don't have the cash comeing in. Anyone that keeps up with their household finances can tell you that. You don't spend more than you can take in, And don't rely on credit. That's what we were (at least I was) taught as a youngster and will teach my children. So what happens to that thought process when you get elected to public office?

**beardman2** · 11-27-2006, 04:22 PM

interesting article.

I'm all for the fair tax system (fairtax.org I think).

I'd also love to cut a ton of the programs out of the government.

11-27-2006, 06:19 PM

That was an interesting article. It made my eyes dry and irritated, though.

jdavionic · 11-27-2006, 06:37 PM

Quote:

Originally Posted by beardman2

interesting article.

I'm all for the fair tax system (fairtax.org I think).

I'd also love to cut a ton of the programs out of the government.

+1 I still need to get the book; but I watched the Fair Tax Rally in my county that was shown on Comcast On Demand. But I still don't see how it will ever get passed.

xd4life · 11-27-2006, 07:02 PM

Yes we need to pass the fairtax, I was at a rally there in Duluth earlier this year before I moved to Yuma. I have met Neil Boortz a few times around Atl. Smart guy, You should give his radio show a chance for a few days.

cucamelsmd15 · 11-28-2006, 04:18 AM

Ben Stein seems to be pretty spot-on with economic stuff like this.

NewXD40fun · 11-28-2006, 07:11 AM

Quote:

Originally Posted by xd4life

I hate to say it but it's the truth. You can't balance the budget if you don't have the cash comeing in. Anyone that keeps up with their household finances can tell you that. You don't spend more than you can take in, And don't rely on credit. That's what we were (at least I was) taught as a youngster and will teach my children. So what happens to that thought process when you get elected to public office?

Oh yes you can balance the budget when you don't have the cash coming in. By cutting spending.

The Democrats will soon show us how its done...

Tom

Brickboy240 · 11-28-2006, 08:21 AM

I am a huge fan of Ben Stein as a writer and commentator. His atricles often appear on Jewish World Review's website and are always worth reading.

I am also a huge fan of Boortz's Fair Tax idea and have read his book. I reccommend that book to everyone. The chapter on how the income tax came about ought to get everyone steamed!

The Fair Tax makes good sense...this alone guarantees it will never see the light of day. The Fair Tax takes power away from the central govt. and puts many out of work, who are making tons of money off our confusing income tax system. Since lawyers we elect to Congress look out for their own and not for the electorate as a whole or what is best for everyone, there will not likely be a move towards enacting the Fair Tax. Sad, but true.

Antoher reason the Fair Tax will never see the light of day is basically the same reason why there will never be any meaningful action on the illegal/border mess - the politicians LOVE using these issues as a bludgeon in their struggle to stay in office. They use the tax system in their class warfare speeches and posturing and the people suck it up as the gospel truth. Why do you think "tax cuts for the wealthy" gets so many people riled up as it does? The truth about our income tax system is RARELY spoken by elected officials or those seeking office.

The truth about our income tax system, withholding and all the other facets, would make anybody that pays taxes angry. The lopsidedness of who pays what percentages, should leave no wonder as to why the wealthy hide their earnings in Swiss accouts, the Cayman Islands or other places! If one is responsible with their earnings, saves and works harder than the guy next to them, they MIGHT get ticked off at someone taking by force, their earnings and pissing it away on things they did not approve of or giving it to those that don't appreciate it or refuse to work hard. Why the class warriors cannot figure this one out stymies me.

A balanced budget? Another thing that will never happen by the Rs or the Ds. Why? Most of the elected officials have NEVER ran their own buisinesses or had to balance a company ledger. Hell, most cannot manage their own damn checkbooks and you're expecting them to be responsible with a much larger and more complicated budget? It is not going to happen, folks! It is not in their DNA to be economically responsible - Rs or Ds. Theres no rules in place to force them and an army of lobbyists stnading outside their doors with golf trips to Scotland and other goodies, all wanting more of your collected tax monies for their own plans. Somehow, I doubt this is what our founders envisioned for us in the future, but it is what we have today. The system protects and preserves THE SYSTEM, period and the working people's wishes and whats best for them are a distant concearn.

The people we elect know only one thing: how to spend and figure out new ways to take more of what working people earn. And don't think they're going to enact legislation that will force them as a group, to BE more economically responsible - they're not about to slit their own throats!

This is the pickle we've gotten ourselves into. It goes beyond Republican or Democrat or gay marraige, stem cell research or any of the other wedge issue/BS distractions they throw up to distract us all from the very real fact that they don't know what they're doing with our money. We need to, as a whole, elect those that HAVE expereince balancing budgets, watching bottom lines, cutting fat and not re-elect those that are lawyers and distract us while blowing our tax dollars like theres no tomorrow.

Unfortunately, I don't see this happening anytime soon. 2008 looks dimmer than ever right now. Its either Hillary or some squishy Republican career politician that knows less than Bush how to be economically responsible. Sad...but very true.

- Brickboy240

**beardman2** · 11-28-2006, 01:17 PM

so what the heck can we all do as group to help push the fair tax then?

11-27-2006, 02:06 PM	#1
Mark S. XDTalk 500 Member Join Date: Oct 2003 Location: Fullerton, CA Posts: 733	Ben Stein on Class Warfare Ben Stein is a pretty well-known conservative economist and commentator. November 26, 2006 Everybody's Business In Class Warfare, Guess Which Class Is Winning By BEN STEIN NOT long ago, I had the pleasure of a lengthy meeting with one of the smartest men on the planet, Warren E. Buffett, the chief executive of Berkshire Hathaway, in his unpretentious offices in Omaha. We talked of many things that, I hope, will inspire me for years to come. But one of the main subjects was taxes. Mr. Buffett, who probably does not feel sick when he sees his MasterCard bill in his mailbox the way I do, is at least as exercised about the tax system as I am. Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap. Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all. It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?” Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare. “There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” This conversation keeps coming back to mind because, in the last couple of weeks, I have been on one television panel after another, talking about how questionable it is that the country is enjoying what economists call full employment while we are still running a federal budget deficit of roughly $434 billion for fiscal 2006 (not counting off-budget items like Social Security) and economists forecast that it will grow to $567 billion in fiscal 2010. When I mentioned on these panels that we should consider all options for closing this gap — including raising taxes, particularly for the wealthiest people — I was met with several arguments by people who call themselves conservatives and free marketers. One argument was that the mere suggestion constituted class warfare. I think Mr. Buffett answered that one. Another argument was that raising taxes actually lowers total revenue, and that only cutting taxes stimulates federal revenue. This is supposedly proved by the history of tax receipts since my friend George W. Bush became president. In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill Clinton’s merry rule. It fell to a low of $794 billion in 2003 after Mr. Bush’s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again. By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible. The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.” The sad fact is that spending rises every year, no matter what people want or say they want. Every president and every member of Congress promises to cut “needless” spending. But spending has risen every year since 1940 except for a few years after World War II and a brief period after the Korean War. The imperatives for spending are built into the system, and now, with entitlements expanding rapidly, increased spending is locked in. Medicare, Social Security, interest on the debt — all are growing like mad, and how they will ever be stopped or slowed is beyond imagining. Gross interest on Treasury debt is approaching $350 billion a year. And none of this counts major deferred maintenance for the military. The fourth argument in response to my suggestion was that “deficits don’t matter.” There is something to this. One would think that big deficits would be highly inflationary, according to Keynesian economics. But we have modest inflation (except in New York City, where a martini at a good bar is now $22). On the other hand, we have all that interest to pay, soon roughly $7 billion a week, a lot of it to overseas owners of our debt. This, to me, seems to matter. Besides, if it doesn’t matter, why bother to even discuss balancing the budget? Why have taxes at all? Why not just print money the way Weimar Germany did? Why not abolish taxes and add trillions to the deficit each year? Why don’t we all just drop acid, turn on, tune in and drop out of responsibility in the fiscal area? If deficits don’t matter, why not spend as much as we want, on anything we want? The final argument is the one I really love. People ask how I can be a conservative and still want higher taxes. It makes my head spin, and I guess it shows how old I am. But I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change? Oh, now, now, now I recall. It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong? THIS brings me back to Mr. Buffett. If, in fact, it’s all just a giveaway to the rich masquerading as a new way of stimulating the economy and balancing the budget, please, Mr. Bush, let’s rethink it. I don’t like paying $7 billion a week in interest on the debt. I don’t like the idea that Mr. Buffett pays a lot less in tax as a percentage of his income than my housekeeper does or than I do. Can we really say that we’re showing fiscal prudence? Are we doing our best? If not, why not? I don’t want class warfare from any direction, through the tax system or any other way. Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com. Last edited by Mark S. : 11-27-2006 at 02:09 PM.

11-27-2006, 04:08 PM	#2
xd4life XDTalk 2K Member Join Date: Sep 2005 Location: AZ. Posts: 2,242	I hate to say it but it's the truth. You can't balance the budget if you don't have the cash comeing in. Anyone that keeps up with their household finances can tell you that. You don't spend more than you can take in, And don't rely on credit. That's what we were (at least I was) taught as a youngster and will teach my children. So what happens to that thought process when you get elected to public office? __________________ "A fine is a tax for doing wrong. A tax is a fine for doing well." Rick Hebert "The best victory is when the opponent surrenders of its own accord before there are any actual hostilities.... It is best to win without fighting." Sun-tzu 300 B.C RON PAUL FOR PRESIDENT

11-27-2006, 04:22 PM	#3
beardman2 XDTalk 4K Member Join Date: May 2005 Posts: 4,947	interesting article. I'm all for the fair tax system (fairtax.org I think). I'd also love to cut a ton of the programs out of the government. __________________ - He that would make his own liberty secure, must guard even his enemy from opposition; for if he violates this duty he establishes a precedent that will reach himself. ~Thomas Paine I will not be involved with the dreams of angry men. Founding Documents Freedom isn't free: http://www.anysoldier.com

11-27-2006, 07:02 PM	#6
xd4life XDTalk 2K Member Join Date: Sep 2005 Location: AZ. Posts: 2,242	Yes we need to pass the fairtax, I was at a rally there in Duluth earlier this year before I moved to Yuma. I have met Neil Boortz a few times around Atl. Smart guy, You should give his radio show a chance for a few days. __________________ "A fine is a tax for doing wrong. A tax is a fine for doing well." Rick Hebert "The best victory is when the opponent surrenders of its own accord before there are any actual hostilities.... It is best to win without fighting." Sun-tzu 300 B.C RON PAUL FOR PRESIDENT

11-28-2006, 04:18 AM	#7
cucamelsmd15 XDTalk 3K Member Join Date: Dec 2005 Location: Wake Forest, NC Posts: 3,347	Ben Stein seems to be pretty spot-on with economic stuff like this. __________________ Creo que debo empezar a aprender español Juan McAmnesty si va a ser Presidente. I have cast my vote and my political allegiance: No Confidence '08. Long live America!

11-27-2006, 06:19 PM	#4
Preacher Posts: n/a	That was an interesting article. It made my eyes dry and irritated, though.

11-28-2006, 08:21 AM	#9
Brickboy240 XDTalk 5K Member Join Date: Dec 2004 Location: Houston, TX, USA Posts: 8,322	I am a huge fan of Ben Stein as a writer and commentator. His atricles often appear on Jewish World Review's website and are always worth reading. I am also a huge fan of Boortz's Fair Tax idea and have read his book. I reccommend that book to everyone. The chapter on how the income tax came about ought to get everyone steamed! The Fair Tax makes good sense...this alone guarantees it will never see the light of day. The Fair Tax takes power away from the central govt. and puts many out of work, who are making tons of money off our confusing income tax system. Since lawyers we elect to Congress look out for their own and not for the electorate as a whole or what is best for everyone, there will not likely be a move towards enacting the Fair Tax. Sad, but true. Antoher reason the Fair Tax will never see the light of day is basically the same reason why there will never be any meaningful action on the illegal/border mess - the politicians LOVE using these issues as a bludgeon in their struggle to stay in office. They use the tax system in their class warfare speeches and posturing and the people suck it up as the gospel truth. Why do you think "tax cuts for the wealthy" gets so many people riled up as it does? The truth about our income tax system is RARELY spoken by elected officials or those seeking office. The truth about our income tax system, withholding and all the other facets, would make anybody that pays taxes angry. The lopsidedness of who pays what percentages, should leave no wonder as to why the wealthy hide their earnings in Swiss accouts, the Cayman Islands or other places! If one is responsible with their earnings, saves and works harder than the guy next to them, they MIGHT get ticked off at someone taking by force, their earnings and pissing it away on things they did not approve of or giving it to those that don't appreciate it or refuse to work hard. Why the class warriors cannot figure this one out stymies me. A balanced budget? Another thing that will never happen by the Rs or the Ds. Why? Most of the elected officials have NEVER ran their own buisinesses or had to balance a company ledger. Hell, most cannot manage their own damn checkbooks and you're expecting them to be responsible with a much larger and more complicated budget? It is not going to happen, folks! It is not in their DNA to be economically responsible - Rs or Ds. Theres no rules in place to force them and an army of lobbyists stnading outside their doors with golf trips to Scotland and other goodies, all wanting more of your collected tax monies for their own plans. Somehow, I doubt this is what our founders envisioned for us in the future, but it is what we have today. The system protects and preserves THE SYSTEM, period and the working people's wishes and whats best for them are a distant concearn. The people we elect know only one thing: how to spend and figure out new ways to take more of what working people earn. And don't think they're going to enact legislation that will force them as a group, to BE more economically responsible - they're not about to slit their own throats! This is the pickle we've gotten ourselves into. It goes beyond Republican or Democrat or gay marraige, stem cell research or any of the other wedge issue/BS distractions they throw up to distract us all from the very real fact that they don't know what they're doing with our money. We need to, as a whole, elect those that HAVE expereince balancing budgets, watching bottom lines, cutting fat and not re-elect those that are lawyers and distract us while blowing our tax dollars like theres no tomorrow. Unfortunately, I don't see this happening anytime soon. 2008 looks dimmer than ever right now. Its either Hillary or some squishy Republican career politician that knows less than Bush how to be economically responsible. Sad...but very true. - Brickboy240 __________________ NOBAMA 2008...neo-Marxism is a very poor substitute for pretend conservatism! Es mejor morir a pie que vivir arrodillado Volvo...the Swedish Brick! Last edited by Brickboy240 : 11-28-2006 at 08:28 AM.

11-28-2006, 01:17 PM	#10
beardman2 XDTalk 4K Member Join Date: May 2005 Posts: 4,947	so what the heck can we all do as group to help push the fair tax then? __________________ - He that would make his own liberty secure, must guard even his enemy from opposition; for if he violates this duty he establishes a precedent that will reach himself. ~Thomas Paine I will not be involved with the dreams of angry men. Founding Documents Freedom isn't free: http://www.anysoldier.com

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