Billionaire Warren Buffett spoke last night at the annual shareholders meeting for his company Berkshire Hathaway, and he had a lot to say about the GOP’s new AHCA healthcare proposal, none of it good. According to a report by the New York Times, Buffett expressed his disdain for the Republican replacement for Obamacare, calling it “a huge tax cut for guys like me.”
And being Warren Buffett, net worth $78.7 billion, considered one of the most successful investors in the world, he came prepared with the numbers to back that up.
The ACA, better known as Obamacare, pays for American healthcare in part – perhaps even primarily — through a tax on the wealthy. The GOP’s AHCA eliminates that tax entirely. According to Buffett, if the GOP healthcare bill had been law last year, “my federal taxes would have gone down 17 percent.”
“That is in the law that was passed a couple days ago. Anybody with $250,000 a year of adjusted gross income and a lot of investment income is going to have a huge tax cut.”
Buffett is famous for his dislike of tax breaks for the wealthy; he’s said before that his secretary shouldn’t have to pay more taxes than he does, and has said that his own income is taxed at 17.4 percent, while his staff pays an average of 34 percent.
On the GOP healthcare bill, according to NPR, he said that healthcare costs have become a larger issue for businesses in America than taxes. In 1960, he explained, corporate taxes accounted for about 4 percent of the GDP. Today, it’s 2 percent. Conversely, healthcare in 1960 was 5 percent of the GDP — it’s now 17 percent.
“So when American business talks about taxes strangling our competitiveness, they’re talking about something that as a percentage of GDP has gone down from 4 to 2.
“So medical costs are the tapeworm of American economic competitiveness.”
Buffett argued that taxes aren’t crippling American competitiveness, “or anything of the sort.” He noted instead that America is far behind the curve of developed nations in controlling healthcare costs. That’s also true; according to the Organization for Economic Co-operation and Development, America ranks first on their list of 35 nations for expenditure on healthcare per capita — and first on private expenditure by an extremely wide margin. More than half of America’s healthcare expenditure per capita is private, an unprecedented figure in the developed world.
In short, America’s healthcare costs are the highest in the developed world, and the American government absorbs less of that cost than any other country.
Over the course of the six-and-a-half hour shareholders meeting, Buffett and his business partner, Charles Munger, talked about how arcane the insurance business (one of their subsidies) is in America, criticized the work of private equity firms, and called out Wells Fargo executives for what Buffett termed creating a toxic culture. “It’s bad enough having a bad system, but they didn’t act.” Wells Fargo later responded that they had taken steps to address the problems that Buffett described.
He also said that driverless vehicles would ultimately harm business, and actively threaten not only the trucking and railroad industries, but insurance as well: he said that if driverless cars become ubiquitous, it will be because they are safer and that this, in turn, would drive down premium income for insurance companies.
Ultimately, Buffett is still the consummate capitalist; he’s concerned with the impact that less vehicle accidents will have on his bottom line, he argues that job loss is necessary to make businesses more productive, and he ultimately defended Wells Fargo, United Airlines, and other companies he’s invested in.
However, Warren Buffett also, somewhat paradoxically, believes in fairness equal opportunities — and he firmly believes that the tax breaks given to the ultra-rich in the GOP’s new healthcare bill are completely unfair to Americans.
[Featured Image by Steve Pope/Getty Images]