The Future Of The
By Robert Kuttner
York Times" -- -- LAST WEEK, superinvestor Warren
Buffett, America's second richest man, testified before the
Senate Finance Committee on the subject of why people like him
can well afford to pay taxes. In fact, Buffett is ceasing to be
among the very wealthiest because he is giving most of his
fortune away to philanthropies while he is still alive.
"Dynastic wealth, the enemy of a meritocracy, is on the rise,"
Buffett told the senators. "Equality of opportunity has been on
the decline. A progressive and meaningful estate tax is needed
to curb the movement of a democracy toward a plutocracy."
Buffett also proposed higher taxes on the wealthy in order to
give working people a break on their payroll taxes, which now
cost three Americans in four more than they pay in income taxes.
And he supports taxing hedge fund bonuses at the same rate as
ordinary income, so that billionaire hedge fund managers don't
pay taxes at a lower rate than the people who clean their
The conservatives on the committee were somewhat nonplussed,
since Buffett is a poster boy for capitalist entrepreneurship.
He isn't supposed to hold such views. And indeed, few Americans
of great wealth do.
Another one who does is William Gates Sr., who writes in the
current issue of the magazine Politico with coauthor Chuck
Collins that "Without our society's substantial investments in
taxpayer-funded research, technology, education, and
infrastructure, the wealth of the Forbes 400 richest Americans
would not be so robust."
The source of great wealth is not just private entrepreneurs,
but the society they inhabit and the public resources on which
Collins, a Bostonian who gave away an inherited fortune while
still in his 20s, has organized a new group called Business for
One of the leaders of that group is Jim Sinegal, chief executive
of Costco, which offers a business model that radically
contrasts with rival Wal-Mart.
Sinegal not only provides decent wages and health insurance for
his employees, but was part of a small group of business leaders
who actually lobbied for an increase in the minimum wage.
One has to admire citizens like Buffett, Gates, Collins, and
Sinegal, patricians who look beyond their own personal fortunes
to the fortunes of the Republic and who lay constructive civic
roles beyond their business interests.
The problem is that there are not nearly enough of them. And
their attitudes run contrary to the gospel of our era that the
prime duty of a corporate executive is to make as much money as
possible for shareholders, no matter what the cost to employees,
communities, or the environment. I recently attended a
conference called the Summit on the Future of the Corporation,
which brought together enlightened corporate executives and
their critics. Half the people attending were corporate leaders
convinced that socially responsible businesses could solve
everything from environmental degradation to uplift of the poor.
As engaged consumers and informed investors reward benign
corporations with their pocketbooks, they contended, more
corporations will be socially virtuous.
The other half of the room responded that most corporations,
even those that want to do the right thing, are largely
undermined by the cutthroat competitive environment in which
Pay decent wages, try to keep good jobs at home, provide good
health and retirement benefits, swear off dubious products like
junk food for kids - and some competitor who takes the low road
is likely to out-compete or underprice you.
Further, much of what passes for socially responsible behavior
by large corporations is so much marketing and "green-washing."
It's nice that Wal-Mart promotes long-life light bulbs, but when
is Wal-Mart going to pay a good wage?
Some businesses like Costco can perhaps do it all (and God bless
them). But for the most part, standards need to be set and
That project calls not just for discerning consumers and
investors but for engaged citizens crusading for public laws and
Leaders like Warren Buffett should be prized, both as executives
whose civic values shame their peers, and as advocates for
better tax-and-spend policies generally. If society is to get
the resources so that healthcare and secure retirement (not to
mention child care and job training) are not left to the whims
and public relations of corporations, Congress had better follow
Buffett's lead on tax equity, and restore our ability to finance
these benefits as citizens.
Robert Kuttner's new book is "The Squandering of America: How
the Failure of our Politics Undermines our Prosperity."
© Copyright 2007 The New York Times Company
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