There was an editorial the other day in the New York Times by Warren Buffet.
What kills me about Warren is how universally ignored he is by the pundits and professors. He’s like this rich uncle that people love and respectfully listen to… and then ignore. He is the Polonius of the Plutocracy.
In his piece, he argues strongly for the rich to pay more in taxes for two reasons:
a) We need the money and
b) It’s basic fairness
This argument was immediately countered by economists on all sides of the equation for the simple reason that they think the actual increase in revenue would be relatively minor. OK, that’s Argument A. But everyone ignored B. And B. is what matters.
Basic fairness matters. It matters -more- than the actual revenue because morale matters. When people feel the system is constantly gamed and unfair, they just stop trying. The motivation of fair play… that ‘every kid can grow up to be President’ is more valuable to the country than any bailout or stimulus package.
And economists almost never include that morale as a part of their equations… for the same reason they get things wrong about so many issues; they refuse to ignore any capital that can’t be quantified in dollars. But social capital matters as much as financial capital. (I think David Brooks is largely corect when he suggests that this is because Economists know they aren’t -real- scientists and if they get within 100 yards of ‘human’ factors, they won’t get tenure.)
Until we start conducting tax policy with ‘fairness’ as a primary goal… regardless of it’s economic efficacy, we will never regain our country’s past glory.
Old Uncle Warren is correct: Moral tax policy is good economic tax policy.