”I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”— Warren Buffett
Debbie Bosanek is her name. She debuted on the world stage during President Obama’s third State of the Union address in 2012 as Warren Buffet’s secretary.
“Right now,” Obama scolded Congress, “because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households.” He noted Debbie as a scapegoat.
At the time Bosanek paid a tax rate of 35.8 percent of income, while Buffett paid 17.4 percent. Obama, conveniently, left out his own tax rate.
Buffett’s rate became a hot topic in the early 2000s—or “the aughts” as we like to say looking over the top of our glasses. Nearly a decade has passed and the fact has maintained its rhetorical quality, becoming a meme and facet of popular culture. It has only been exacerbated by the perennial debt ceiling debate.
“The question is what is fair when you have to raise multi-trillions to fund the United States of America,” said Buffett in an interview with the American Broadcasting Company in 2011.
That’s what taxes are for, in theory. Instead, they get grifted out – tools for war and decimation are sent to the Donbas region, Saudi sheiks are entertained with belly-dancers in Dubai’s palm islands, French social politics gets discussed over three martini lunches on Place de la Concorde. Is there an ethical way to prop up the American way of life, of richesse and whim, of the long arm of the global gendarme… without royally screwing the pooch for the middle class?
The tax code has changed since Obama’s last State of the Union. Regardless, one thing remains the same: The American tax code favors the wealthy.
According to the Motley Fool, there are 5.3 million millionaires and 770 billionaires living in the United States. Millionaires make up about 2% of the U.S. adult population.
There’s a staggering amount of wealth among high-net-worth individuals: it’s home to $65.4 trillion in private wealth—by far the largest wealth market in the world.
Everyday Americans are taking the brunt: the left jab of inflation, the right hook of rising interest rates and the upper cut of higher tax rates. It’s not as simple as how much debt you have, as hikes take even regional banks by surprise. The real champ throwing his weight around the ring is how much debt you have to service.
Quality over quantity, maybe.
The national government, too, is getting pummeled. When rates go up, debt service becomes a larger and larger chunk of the overall budget. Hence the headlong careen towards the debt ceiling… the threat of default… a rabid news cycle.
For most people, fretting over higher taxes and a ceasefire on the Hill is a waste of time since there is little they can do about it.
The wealthiest have the most to gain. “Raising taxes will not change my behavior,” Buffett states in his typical sober simplicity. “I have paid all different kinds of rates and I’ve always been interested in making money. I believe this should be a defining issue. Debbie works just as hard as I do and she pays twice the rate I do.”
“I don’t make the tax laws,” we paraphrase a conversation we had with Warren when filming an interview for our documentary I.O.U.S.A. “Congress does that. If you want me to pay more taxes, Congress has to change the tax law. Don’t give me so many loopholes.”
“I just feel like an average citizen. I represent the average citizen who needs a voice,” adds Bosanek, sitting beside her boss. “Everybody in our office is paying a higher tax rate than Warren.”
Thata meme has flitted past our laptop screen more than once. “I’m Warren Buffet’s secretary”—someone steps forward. “No, I’m Warren Buffet’s secretary.”
Maybe we’re all Warren Buffet’s secretary.
So it goes,
The Wiggin Sessions
P.S. The former head of the Government Accountability Office (GAO), David Walker was our protagonist for I.O.U.S.A. We followed him around the country, to two political conventions, with a film crew, as he headlined what was then known as the Fiscal Wake Up Tour – sponsored by the above-mentioned Peter G. Peterson.
The film was accepted into the Sundance Film Festival, shortlisted for an Academy Award and received an honorable mention at the Critics Choice Movie Awards. We received a glowing endorsement from the famed movie critic Roger Ebert.
All the popular attention prompted David Walker to resign the Government Accountability Office – yes, I’m aware it’s an oxymoron – to become the founding president of the newly minted Peter G. Peterson foundation. The one condition Mr. Peterson had: he wanted to buy the film from me. I was in over my head financially on making the film so I took the offer.
It ended up being a bad move. After they bought the film they hired the producer of the “Rock the Vote” campaigns for MTV. Who then proceeded to turn my “warning” of a debt crisis at the end of the film into a Rock the Vote montage.
Rock the Vote!
As if voting has ever done anything to get spending under control. Oy.
“A democracy cannot exist as a permanent form of government,” quoth the Scottish historian Alexander Fraser Tytler, Lord Woodhouselee in the early 1800s, ”it can only exist until the majority discovers it can vote itself largesse out of the public treasury.”
Here’s the kicker. Peter G. Peterson punted a billion dollars of his own money into the new “non-profit” foundation. From the 57th floor boardroom of a glass and steel behemoth overlooking Central Park in New York, I witnessed first-hand how billionaires hide their money and pay fewer taxes than I do.
P.P.S. My book is still working its way through the New→Old news pipeline at Barnes n Noble and on Amazon. Maybe I should set up my own “non-profit” with the proceeds. Oh, wait… they ain’t gonna amount to no billion dollahs.
Addison Wiggin is an American writer, publisher, and filmmaker. He was the founder of Agora Financial and publisher for 18 years. An acclaimed New York Times best-selling author, his books include: Financial Reckoning Day, Empire of Debt, The Demise of the Dollar, and The Little Book of the Shrinking Dollar. Addison is also the writer and executive producer of the documentary I.O.U.S.A., an exposé on the national debt, shortlisted for an Academy Award in 2008. He lives in Baltimore, Maryland with his family. Addison started his latest project, The Wiggin Sessions, powered by Consilience Financial, in March 2020. He films from a homegrown studio in his basement.