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The Billionaires vs. The Millionaires

Articles & Blogs - US Commentary

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Warren Buffett was at it again recently: telling anyone who would listen about the need for a “millionaires tax” in the United States. However, while the Corporate Media was (as usual) heaping praise on Buffett, the reality is that Warren Buffett is not being “magnanimous”, he’s being disingenuous.

Why is Warren Buffett so adamant about the need for the Tax Man to start squeezing the millionaires? So that he (and his billionaire Oligarch-buddies) can continue to avoid paying his fair share of taxes.

Buffett knows that everyone below the level of millionaire has already been squeezed dry. Buffett knows that the U.S. is drowning in debt, and (in real dollars) tax revenues have totally collapsed. So unless the U.S. government comes up with a new source of revenue (and fast), Oligarchs like Buffett are facing a grim future. Either their entire Paper Empire will disintegrate in a wave of domino debt-defaults, or the exponentially increasing money-printing needed to “fund” exponentially rising deficits will quickly trigger hyperinflation – also taking their Paper Empire to zero.

As regular readers know, it is impossible to ever construct a “fair” system of income taxation. As a basic proposition of arithmetic, all income tax systems slowly but inevitably funnel all wealth out of the pockets of the bottom-99% and into the vaults of the top-1%. While I’ve explained the mechanics here before; since this obvious concept has still not been grasped by most readers I’ll explain it one more time.

For the poor; annual income represents nearly 100% of their total wealth. For the dwindling number of the Middle Class; annual income still represents a large percentage of their net wealth. However, for the average Billionaire; income represents less than 5% of their total wealth. Even if Billionaires had their own income taxed at a 100% rate, they would pay a much smaller percentage of their total wealth in taxes than one of the Little People, being taxed on their income at only a 25% rate.

Unlike the rest of us, most of the increasing wealth for these Billionaires does not come from income. Rather, it comes from the untaxed appreciation of their hard assets: their mansions, their yachts, their antique paintings. Just imagine how the dread which the Little People have for Tax Day would instantly evaporate if they knew that as much as 95% of their wealth would be immune to any taxation, throughout their entire lives.

Warren Buffett doesn’t want to pay taxes. He wants to keep avoiding paying taxes on his billions. Presumably Buffett’s billions allow him to hire a competent tax lawyer. Thus Warren Buffett knows that the only form of “fair taxation”, the only vehicle which would (ever) result in the Billionaires paying their fair share of taxes is a flat wealth tax.

The obvious difference between income taxation and wealth taxation is that with wealth taxation the Billionaires can no longer permanently hide their billions from taxation. In fact they can’t hide anything at all. No more free ride.

The great irony with Buffett’s duplicitous taxation proposal is that the Millionaires have always chosen to align themselves politically and economically with the Billionaires. They were (supposedly) on “the same team.” Now the Millionaires can see for themselves what a flawed assumption that was.


As we see today, when confronted with the threat of (perhaps) paying something remotely resembling fair taxes themselves; the Billionaires have decided to throw the Millionaires under the bus. They can pay “fair taxes”, while Billionaires like Buffett keep laughing all the way to the bank (they own).

As I’ve observed in the past, it is the very-wealthy themselves who have spent decades pounding the table demanding a Flat Tax. They tell us that a Flat Tax is the only path toward “fair taxation.” Of course what the very-wealthy wanted was a flat income tax, where their huge wealth-hoards would continue to remain untouched while their tiny increment of income would be taxed at the same, low rate as the Little People – for whom income is all they have.

In fact a “flat tax” is the basis for the most fair form of taxation, but it can only be a flat wealth tax.

Note that the same argument which applies against income taxation is even more applicable regarding heinous “consumption taxes”, currently being advocated by many brain-dead economists. Knowing that the Little People can’t have any more income taxes squeezed out of them, these Rocket Scientists propose taking more out of their pockets via sales taxes – as if simply calling the tax by a different name will reduce the economic pain (and carnage) from such tax increases.

As with income, consumption represents only a trivial percentage of the total wealth of Billionaires, while representing a much, much larger percentage of the total wealth for the Little People. And consumption taxes have much less “progressive” tax structures – meaning those on the very bottom (the poor and senior citizens) are hit especially hard.

There can be no possible rebuttal to this analysis. The Poor have nothing left to tax. The Rich want a Flat Tax. Our Governments must have more money. There is only one policy which can simultaneously deal with all three of those parameters.

When we think of “class warfare”, we have been conditioned to view this in simplistic terms as the Rich (in a broad, general sense) versus the Poor (i.e. non-wealthy). What we see today is that this is a totally false paradigm. As I noted in a previous commentary (Don’t Blame The Millionaires); the moderately wealthy have never been a part of this class-war scenario.

Like the Little People (and with occasional exceptions), the moderately wealthy simply go through their lives seeking to better their own circumstances – without any predatory/parasitic impulses toward their Neighbours. Not so with the Top 1%.

These rapacious predators are entirely malevolent. While they are best epitomized by the Wall Street crime syndicate, they infest every niche of our economies (and our lives). The “fronts” for these Predator Billionaires are corporate oligopolies with names like Monsanto, DuPont, Exxon, and BP.

They are called “public corporations” but there is nothing “public” about them. By themselves, the Top 1% own roughly 50% of these mega-predators. Broaden that to the top-20%, and that figure rises to 90% ownership of all corporations. The Little People (i.e. the “public”) own virtually nothing of these corporations.

Here we see the only way in which the Top 1% and the Lesser Wealthy can be considered to be on the “same team”: they are both owners in these mega-corporations. Here we see the real purpose behind Buffett’s “millionaires tax.” The Billionaires have decided they can no longer afford to have the Millionaires on their team.

Start squeezing the Millionaires with a millionaires-tax, and slowly but steadily their share of the Corporate Pie will get smaller and smaller – while the Billionaires’ 50% share gets larger and larger. The Little People have already been sucked-dry by the Vampire Billionaires. Now they want to go for the throats of the Millionaires…

Comments (2)Add Comment
Jeff Nielson
written by Jeff Nielson, December 03, 2012
Null I took a quick look at the link you supplied and would agree with your assessment that (to put it mildly) it "understates" the plight of the Middle Class.

It actually begins with the nonsense that "incomes for the Top 1% fell by MORE than the incomes of the lower-99% during the Great Recession." This IGNORES the reality that before the Crash (which THEY created), their incomes had exploded upward exponentially at the most-rapid rate in history.

Even when academic institutions do NOT display an elitist bias, Ivory Tower syndrome usually means that little useful analysis will emerge... smilies/wink.gif
written by Null, December 02, 2012
Yes this is a disturbing trend and another example of the elites turning the middle class against itself. Well paid doctors are not the problem! I thought I'd pass on this paper that quantifies this wealth inequality.

Even this I think underestimates the plight of the middle class because I presume they're using official CPI stats to calculate how much incomes are growing or shrinking. Switch that with Shadowstats and it becomes even worse.

As the US economy is no longer growing, it's actually shrinking, due to resource constraints and the fact that you can't go on importing over half your oil via trade deficit forever, it therefore follows that if the top 1% (I think the truly wealthy parasites actually represent something more like 0.01% or 0.001%) get wealthier, then that must mean that the rest of society gets poorer, because it's a zero sum gain. Actually its a shrinking pie, because the US economy is shrinking.

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