Do As I Say Not As I Do
Gary Gerard,
dumbhoosier.com
A couple of things I read this week seemed really, well,
appropriate, I supposed, for these bizarro-world times in
which we live.
First of all, there was Warren Buffett, investor
extraordinaire and one of the richest people in the world.
Last week, President Obama was touting Buffet because the
47x billionaire said rich people should pay more taxes.
In an Aug. 14 op-ed piece for the New York Times, “Stop
Coddling the Super Rich,” Buffett wrote that, “While the
poor and middle class fight for us in Afghanistan, and while
most Americans struggle to make ends meet, we mega-rich
continue to get our extraordinary tax breaks. ...
“Last year my federal tax bill – the income tax I paid, as
well as payroll taxes paid by me and on my behalf – was
$6,938,744. That sounds like a lot of money. But what I paid
was only 17.4 percent of my taxable income – and that’s
actually a lower percentage than was paid by any of the
other 20 people in our office. Their tax burdens ranged from
33 percent to 41 percent and averaged 36 percent.”
He went on to talk about the inequity of U.S. tax laws and
how rich people are not averse to paying more taxes. It was
a well-written, impassioned piece of prose. It was a
convincing case for raising taxes on the rich.
Earlier this week, the White House talked with Buffett to
get his thoughts on taxes and the economy.
Problem is, there is more than a little hypocrisy in
Buffett’s diatribe.
See, you don’t have to look far beyond his own company’s
annual report to see how he really feels about taxes.
Lots of sources have quoted the following from the Berkshire
Hathaway report: “We anticipate that we will resolve all
adjustments proposed by the U.S. Internal Revenue Service
(‘IRS’) for the 2002 through 2004 tax years at the IRS
Appeals Division within the next 12 months. The IRS has
completed its examination of our consolidated U.S. federal
income tax returns for the 2005 and 2006 tax years and the
proposed adjustments are currently being reviewed by the IRS
Appeals Division process. The IRS is currently auditing our
consolidated U.S. federal income tax returns for the 2007
through 2009 tax years.”
Seems Berkshire Hathaway has been shorting the IRS since
2002.
So while Buffet says he’d happily pay more taxes, the IRS
has to keep hammering on his company to pay its fair share.
The IRS went to Berkshire in 2002 and said, essentially,
“Hey, you guys didn’t pay enough income tax.”
Instead of paying what the IRS said it owed, Berkshire
Hathaway threatened the IRS with drawn-out litigation. The
same thing happened year over year. Each time, the company
threatened litigation and tried to cut a deal with the IRS.
See, that’s not really how things work for us, ah, how did
he say that? “... poor and middle class” while we “...
struggle to make ends meet.”
If the IRS says we owe, we just pay. No attorneys. No
litigation. No deals.
Now, I can’t say that if I was running Berkshire Hathaway, I
wouldn’t do exactly the same thing. I probably would. I’d
probably fight the IRS, too.
But I sure wouldn’t out myself as a hypocrite by shooting my
mouth off about how I and all the other rich people in
America want to pay more taxes.
*****
Next, there’s Jeffrey Immelt. This one is even more
ludicrous.
Immelt is the CEO of GE. He also is President Obama’s jobs
czar. The jobs czar is the guy charged with turning the
unemployment problem around in this country and getting us
all back to work.
OK.
So the jobs czar’s company GE, recently announced it was
moving its X-ray headquarters from Waukesha, Wisc., to
Beijing, China.
According to the Milwaukee Journal Sentinel, the production
unit in Waukesha won’t lose any of its 120-plus jobs, and
only a “handful” of key execs will move to Beijing.
Oh, well that’s nice. But what about going forward? How many
jobs would have been created in Wisconsin if they kept their
X-ray headquarters there?
The Journal Sentinel article noted, “In Beijing, Shanghai
and beyond, GE already has invested billions of dollars and
hired 700 engineers. The company's stated goal since 2008
when CEO Immelt described China as GE's ‘second home market’
is to expand its business there.”
China’s the “second home market?” Really?
Because GE today has only 46 percent of its workers in the
United States today, down from 54 percent in 2000. Is he
sure the U.S. isn’t GE’s second home market?
Further, GE’s avionics division has this really slick new
“synthetic vision” system that allows a plane to take off or
land despite the worst weather conditions.
The Washington Post reports the system is one of several
highly valuable next-generation technologies that GE has
developed – and has passed along to China as part of a joint
venture with the state-owned Aviation Industry Corporation
of China.
Good for GE and AVIC.
The “synthetic vision” technology will likely be worth
millions to airlines as it can reduce costs from weather
delays.
According to the Post, under the agreement with AVIC, GE
avionics will be on board a new Chinese commercial airliner
that is likely to become a rival to aircraft produced by
U.S.-based Boeing...
The potential competition with Boeing, coming at a time when
the United States is fighting to maintain its own
manufacturing base, has stirred some American criticism.
Ya think?
But GE executives say they have had no second thoughts.
China’s airplane market is booming, and the deal was too
important to pass up, they said, even at the cost of sharing
the avionics technology.
And Obama’s jobs czar runs GE?
Why doesn’t Obama appoint a meth head as his drug czar?
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